Asian markets hit by US 'fiscal cliff' fears

HONG KONG: Fears the US economy is facing another huge economic crisis spurred a sell-off in Asian markets Thursday as Barack Obama's re-election raised the spectre of another dangerous stand-off in Washington.

Investors fear a deeply divided Congress will not be able to reach an agreement to avoid a so-called fiscal cliff at the end of the year that many say will send the United States back into recession.

Eyes are also on Beijing, where the Communist Party has kicked off its 18th congress, which will see the beginning of a once-in-a-decade leadership change.

Tokyo stumbled 1.27 per cent by the break, Hong Kong skidded 1.24 per cent, Sydney lost 0.85 per cent, Seoul was 0.89 per cent lower and Shanghai fell 0.87 per cent.

The initial upbeat reaction Wednesday to Obama's victory over Republican Mitt Romney was replaced Thursday with trepidation as the focus turned to the fiscal cliff, a combination of deep spending cuts and huge tax hikes to take effect on January 1.

The package is a major threat to the economy after a protracted but possibly reckless compromise was agreed last year between Democrats and Republicans in order to raise the country's borrowing cap.

If it kicks in, the United States' slow recovery from the financial crisis could be reversed and the economy tip back into recession, which would in turn deal a major blow to the global economy.

And with Democrats holding the Senate while the Republicans hold the House of Representatives analysts say a compromise could be as tough to find as last August, when the row over the spending limit saw the country lose its AAA sovereign debt rating.

"Immediately after the re-election parties ended, markets returned to the daunting issue of the US 'fiscal cliff'," Nicholas Smith, Japan strategist for CLSA in Tokyo, told Dow Jones Newswires.

Wall Street, which had favoured a pro-business Romney win, tumbled on Obama's victory.

The Dow dived 2.36 per cent, the Nasdaq shed 2.48 per cent and the S&P 500 lost 2.37 per cent.

Currency markets also reacted negatively.

The dollar fell to 79.87 yen in early Asian trade, from 79.96 yen in New York late Wednesday, as investors seek out the safe Japanese unit amid times of economic uncertainty.

And the euro was also hit by traders becoming more risk-averse. The single currency, which rose against the dollar Wednesday on expectations of continued loose US monetary policy under Obama, fetched $1.2757 in Tokyo, compared with $1.2767 in New York. It had reached $1.2860 on Wednesday in Asia.

The European currency also fell to 101.87 yen, compared with and 102.09 yen.

Market sentiment was also pressured after the European Union slashed its eurozone economic forecast and European Central Bank chief Mario Draghi warned that the eurozone's woes were beginning to hurt Germany, the bloc's powerhouse.

However, Greek lawmakers did manage to pass a crucial austerity package that opens the way for it to qualify for a fresh batch of bailout cash.

In China the week-long congress is expected to see the anointment of the country's next leaders, with the focus on the composition of the Communist Party's top governing body for signs of future policy direction.

In a speech to open the event President Hu Jintao called for the country's future leadership to "speed up the creation of a new growth model and ensure that development is based on improved quality and performance".

Oil prices rose, with New York's main contract, light sweet crude for delivery in December, adding 42 cents to $84.86 a barrel and Brent North Sea crude for December delivery gaining 41 cents to $107.23.

Gold was at $1,716.60 by 0300 GMT compared with $1,729.40 Wednesday.

Dollar down, markets up in Asia after Obama win

HONG KONG: The dollar slipped in Asian trade on Wednesday, while share markets rose after President Barack Obama was re-elected in a knife-edge US presidential election.

As a hard-fought campaign came down to the wire Obama was declared winner after picking up crucial swing states, wiping away uncertainty that had pervaded markets for the past few days.

But in afternoon foreign exchange trade the greenback slipped against the euro and yen as dealers bet that under Obama the Federal Reserve would continue with the loose monetary policy that has seen it flood markets with billions of dollars.

The European single currency bought $1.2861 in Tokyo, well up from $1.2788 earlier Wednesday and $1.2814 in New York late Tuesday. The greenback was also at 80.05 yen compared with 80.34 yen in New York.

The greenback was also broadly lower against other Asia-Pacific currencies, including the Australian, Taiwan and Singapore dollars, and the Indian rupee.

A clear victory had been the overriding hope as it will now allow the government to move on fixing the austere "fiscal cliff" of tax hikes and spending cuts that sits on the horizon and could hammer the economy.

In afternoon trade Asian shares were higher.

Sydney gained 0.71 per cent, or 31.7 points, to end at 4,516.5, and in the afternoon Hong Kong rose 0.30 per cent, Seoul gained 0.33 per cent and Shanghai was up 0.16 per cent while Tokyo was flat.

"An Obama victory ensures the continuity of the US monetary policy, which is likely to be kept loose," SHK Financial strategist Daniel So told Dow Jones Newswires.

He added that a Romney win would likely see him "launch policies to incentivise fund flow back to the US, so in terms of liquidity inflow an Obama win also favours the Asian markets".

Wall Street ended with impressive gains ahead of the election results. The Dow rose 1.02 per cent, the S&P 500 climbed 0.79 per cent and the Nasdaq added 0.41 per cent.

However, regional traders were still concerned about Europe's debt woes, which were stoked on Tuesday after data showed a bigger-than-expected slump in factory orders in Germany, the eurozone's biggest economy.

Berlin said industrial orders declined 3.3 per cent in September from August after already falling 0.8 per cent the previous month.

That is much steeper than expected. Analysts polled by Dow Jones had been pencilling in a fall of 0.5 per cent.

The drop was largely due to a decline in export orders, particularly from the eurozone, where they plummeted 9.6 per cent.

Eyes are also on the upcoming 18th congress of the Chinese Communist Party that begins on Thursday and which will see the country's leaders for the next 10 years anointed.

Oil prices were lower, with New York's main contract, light sweet crude for delivery in December, down 29 cents to $88.42 a barrel and Brent North Sea crude for December delivery shedding 52 cents to $110.55.

Gold prices rose thanks to the weaker dollar, sitting at $1,710.40 by 0545 GMT compared with $1,679.75 late Monday.

Asian markets up on US jobs data

HONG KONG - Asian markets rose Friday following another set of promising jobs data from the United States, while dealers were also upbeat ahead of the release of closely-watched Chinese economic figures.

Japanese shares, however, were hit by a plunge in telecom giant Softbank after it emerged it is eyeing a near $13 billion (S$15.9 billion) deal to buy Sprint Nextel of the United States, in what would be one of Japan's biggest ever overseas deals.

Tokyo was flat by the break, Hong Kong added 0.82 percent, Sydney gained 0.17 percent, Shanghai climbed 0.60 percent and Seoul rose 0.12 percent.

The gains come at the end of a week that raised new fears about the global economy, with the International Monetary Fund slashing its growth forecasts across the world, while Spain continues to refuse to ask for a bailout.

Hopes for the US economy were given another boost Thursday when the Labor Department said insurance benefits plunged unexpectedly last week to the lowest level since February 2008.

New jobless claims, a sign of the pace of layoffs, came in at 339,000 in the week to October 6, far below the previous week's 369,000 and the then-four-week average of 375,500.

Those figures come on top of data last week showing the unemployment rate had fallen to 7.8 percent in September.

However, on Wall Street the Dow fell 0.14 percent while the Nasdaq and S&P 500 were both flat.

Eyes are now on China, which will release on Saturday its trade figures for September, with investors hoping for an improvement on recent months that have revealed tumbling exports and imports as the demand in key markets dries up.

Beijing will on Monday release inflation data, followed by crucial gross domestic product figures.

Traders are also hoping leaders will soon introduce a fresh round of stimulus as a once-in-a-decade leadership transition approaches next month.

In Tokyo, broad advances stoked by a weak yen were held back by a 16 percent slump in Softbank, the country's third biggest telecoms firm, after it said it was in talks to buy Sprint for $12.8 billion.

Kenji Shiomura, strategist at Daiwa Securities, said: "Investors were discouraged by the possibility that the company could be saddled with a heavy financial burden".

"Putting aside the point of whether the deal could be successful in the long run, the market is cautious."

On forex markets the euro benefited from increased risk sentiment. In early trade it bought $1.2939, compared to $1.2926 late Thursday in New York, while it was also up at 101.53 yen from 101.25 yen.
The dollar gained to 78.49 yen from 78.33 yen.

Oil prices were higher with New York's main contract, light sweet crude for delivery in November rising 29 cents to $92.36 a barrel and Brent North Sea crude for November advancing 10 cents to $115.81.

Gold was at $1,769.98 at 0325 GMT compared with $1,770.18 late on Thursday.

Asian markets boosted by US manufacturing data

HONG KONG: Asian markets rose Tuesday following better-than-expected manufacturing data from the United States that lifted hopes for recovery in the world's number one economy.

The news, which followed minor improvements in Asian and European activity, also gave a boost to the dollar and euro against the yen, lifting Japanese stocks.

Tokyo was 0.25 per cent higher by the break, Sydney added 0.60 per cent and Seoul was 0.27 per cent higher, while Taipei added 0.26 per cent.

Hong Kong, Shanghai and Mumbai were closed for a public holiday.

Traders took their lead from Wall Street, which ended broadly higher after the Institute for Supply Management said its Purchasing Managers Index (PMI) edged up to 51.5 last month, from 49.6 in August -- representing the first expansion after three months of contraction.

A reading above 50 indicates growth and anything below represents shrinkage.

On Monday China said its own PMI was at 49.8 in September, which while still negative represents a modest improvement on 49.2 in August. And in Europe the reading came in at 46.1, up from 45.1.

CLSA equity strategist Nicholas Smith said that the figures appeared to show "that the general picture is for a turnaround in global markets".

At the close of trade on Wall Street the Dow added 0.58 per cent and the S&P 500 added 0.27 per cent but the Nasdaq edged down 0.09 per cent.

On currency markets the dollar stood at 78.13 yen in Asian trade, from 77.98 yen in New York late Monday.

The euro was at $1.2898 and 100.82 yen, compared with $1.2887 and 100.51 yen in New York.

Eyes are now on the Reserve Bank of Australia (RBA), which is due later in the day to announce a decision on interest rates, with opinion split on whether it will make a cut to boost the economy.

"A rate cut today looks like a line ball decision for the RBA," Ric Spooner, Chief Market Analyst at CMC Markets said in a note to clients.

"With a division of opinion amongst analysts on whether the RBA will move, a rate cut today has the potential to move markets this afternoon," he said, according to Dow Jones Newswires.

Oil prices rose in early trade, with New York's main contract, light sweet crude for delivery in November, adding three cents to $92.51 a barrel and Brent North Sea crude for November gaining 16 cents to $112.35.

Gold was at $1,777.30 at 0300 GMT compared with $1,770.50 on Monday.

Work, mahjong and tea: Hong Kong's secrets to longevity

HONG KONG: Covered in smog and cramped apartment towers, Hong Kong is not usually associated with a healthy lifestyle. But new figures show that Hong Kongers are the longest-living people in the world.

Hong Kong men have held the title for more than a decade and recent data show female Hong Kongers are overtaking their Japanese counterparts for the first time, according to the governments in Tokyo and Hong Kong.

Hong Kong women's life expectancy rose from an average 86 years in 2010 to 86.7 years in 2011, while Japanese women's longevity was hit by last year's earthquake and tsunami, falling to 85.9 years, census figures reveal.

So what is Hong Kong's secret to a long life?

Experts say there is no single elixir, but contributing factors include easy access to modern health care, keeping busy, traditional Cantonese cuisine and even the centuries-old Chinese tile game of mahjong.
Rolling stones gather no moss

"I love travelling, I like to see new things and I meet my friends for 'yum cha' every day," Mak Yin, an 80-year-old grandmother of six says as she practises the slow-motion martial art of tai chi in a park on a Sunday morning.

"Yum cha" is the Cantonese term to describe the tradition of drinking tea with bite-sized delicacies known as dim sum. The tea is free and served non-stop, delivering a healthy dose of antioxidants with the meal.

"My friends are in their 60s -- they think I'm around their age too, although I'm much older than them," Mak laughs.

Mak's favourite food is steamed vegetables, rice and fruit. Cantonese food is famous for steamed fish and vegetables -- dishes that use little or none of the cooking oils blamed for heart disease, obesity and high cholesterol.

But before Mak enjoys her afternoon tea, she joins a group of elderly people for her morning exercise of tai chi, an ancient Chinese practice said to have benefits including improving balance and boosting cardiovascular strength.

A study published in the New England Journal of Medicine in February found that tai chi reduces falls and "appears to reduce balance impairments" in people with mild-to-moderate Parkinson's disease.

Another factor behind Hong Kongers' longevity, experts say, is work. While others long for the day they can retire and kick up their heels, many people in Hong Kong work well into their 70s and even 80s.

Hong Kong does not have a statutory retirement age and it is common to see elderly people working in shops, markets and restaurants alongside younger staff.

"Many old people in our city remain working, that contributes to better psychological and mental health," Hong Kong Association of Gerontology president Edward Leung says.

"For older people, a lot of them are stressed because they have nothing to do and they develop 'emptiness syndrome'. This causes mental stress."

Fishmonger Lee Woo-hing, 67, says he could not bear to sit at home and do nothing. His inspiration is local tycoon Li Ka-shing, Asia's richest man, who still runs his vast business empire in his 80s.

"If Li Ka-shing continues working at the age of 84, why should I retire?" asks the father-of-four during a break from his 14-hour shift at a bustling market in central Hong Kong.

"If I just sit at home and stare at the walls, I'm worried that my brain will degenerate faster. I'm happy to chat with different people here in the market."
'Mahjong delays dementia'

Hong Kong's cramped living conditions are famously unhealthy, fuelling outbreaks of disease and viruses including bird flu and severe acute respiratory syndrome (SARS) which have killed dozens of people.

The city's reputation won it the dubious distinction of a starring role in director Steven Soderbergh's 2011 disaster thriller "Contagion", about a deadly virus that spreads from Hong Kong to the United States.

But in the day-to-day habits of ordinary people, experts say Hong Kong is a great place to grow old.

A popular local way of keeping busy and meeting friends is mahjong -- a mentally stimulating tile game which can help delay dementia, according to aging expert Alfred Chan, of Hong Kong's Lingnan University.

"It stimulates the parts that control memory and cognitive abilities. It helps old people with their retention of memory," he says.

The complex rules and calculation of scores make mahjong, also known as the Chinese version of dominoes, mentally demanding. But the social aspects of the four-player game are just as important.

"In mahjong you need to play with three other people. It is a very good social activity, you have to interact with each other constantly," says Chan, who has studied the game's effects on the well being of elderly people.

"It is also a self-fulfilling game because if you win -- whether you play with money or not -- it gives you a sense of empowerment."

Mahjong parlours are popular in Hong Kong, and mahjong tables are a must at Chinese wedding banquets.

"I'm in semi-retirement. I work in the morning and hang out with my friends by playing mahjong in the afternoon," says 67-year-old tailor Yeung Fook, on the sidelines of a game in his modest garment shop.

"I'm happier when I work. It's boring to just sit at home."

Asian markets lifted by Merkel comments

HONG KONG - Asian markets were mostly higher and the euro enjoyed strong support Friday as spirits were lifted by comments from German Chancellor Angela Merkel reasserting her desire to save the eurozone.

Tokyo's Nikkei index added to the previous day's healthy gains, advancing 0.63 percent by the break as the yen eased further against the dollar with dealers growing confident enough to move out of the safe haven Japanese unit.

Hong Kong added 0.59 percent, Sydney climbed 0.63 percent, and Shanghai was up 0.21 percent, while Seoul eased 0.67 percent.

Merkel, who as head of Europe's biggest economy is key to the success of any plan to save the euro, said Thursday she backed European Central Bank chief Mario Draghi's commitment to do whatever was needed to support the currency.

On a visit to Canada she said: "What he said is something that we repeated time and again," since the Greece crisis began more than two years ago, "that we feel committed to do everything we can in order to maintain the common currency".

She said the ECB was "completely in line with what we've said all along" and its decision to set conditions on bond-buying was "a positive development for the euro-area".

The comments were seen by traders as a sign she could be warming to the idea of the ECB buying up bonds of troubled sovereign states such as Spain and Italy, which have seen their borrowing costs soar to danger levels recently.

Global markets have been enjoying gains over the past few weeks on expectations the bank will restart the bond-buying programme.

The euro was given a strong lift in New York on Merkel's remarks and it held up in Asia.

The single currency bought $1.2350 and 98.04 yen in early Asian trade, compared with $1.2358 and 98.06 yen in New York and well up from the $1.2270 and 97.15 yen it fetched in Asia Thursday.

The yen was also lower against the dollar, with the upbeat outlook providing support to riskier assets, while expectations of another round of Federal Reserve pump priming are also easing.

The dollar fetched 79.37 yen in early Asian trade, from 79.33 yen in New York late Thursday.

The greenback was helped by US data on new jobless claims and housing construction, which provided more evidence that the world's biggest economy is growing steadily, albeit slowly.

Weekly numbers for new unemployment insurance claims, an indicator of the pace of layoffs, came in as expected and in the same range as the past four months, while July data on new housing construction, although slightly down from June, showed an industry steadily picking up pace.

On Wall Street the Dow rose 0.65 percent, the S&P 500 added 0.71 percent and the Nasdaq climbed 1.04 percent.

But Facebook shares plunged 6.3 percent to a new low of $19.87 as the lockup period for sales by pre-IPO investors ended. The company's share price has almost halved since its May 18 initial share offering at $38.

New York's main oil contract, West Texas Intermediate light sweet crude for delivery in September, was down 22 cents to $95.38 a barrel in Asian trade Friday and Brent North Sea crude for October delivery sank 66 cents to $114.61.

HSBC shares dive in Hong Kong after apology

HONG KONG - Shares in global banking giant HSBC fell more than two percent in Hong Kong on Wednesday after a top executive resigned over the lender’s failure to control money laundering and terrorist financing.

London-based HSBC apologised Tuesday for failing to apply anti-laundering rules as US lawmakers accused it of giving Iran, terrorists and drug dealers access to the US financial system.

Its shares listed on the Hong Kong stock exchange fell 2.06 percent to close at HK$66.55, while the Hang Seng index slipped 1.11 percent.

“We deeply regret and apologise for the fact that HSBC did not live up to the expectations of our regulators, our customers, our employees, and the general public,” HSBC Bank USA (HBUS) President Irene Dorner told a hearing of the Senate Homeland Security Subcommittee on Investigations.

“HSBC’s compliance history, as examined today, is unacceptable.”

Before reading his own testimony, David Bagley, the head of group compliance for HSBC, stepped down from his post in the wake of the subcommittee’s report on the bank’s operations.

“I recognise that there have been some significant areas of failure,” he said. “This clearly took far too long to resolve.”

The Senate report found that HSBC had allowed affiliates in countries such as Mexico, Saudi Arabia and Bangladesh to move billions of dollars in suspect funds into the United States without adequate controls.

Lawmakers said money laundered through HSBC-linked accounts benefited Mexican drug lords and terrorist networks, and skirted US sanctions on Iran. “It’s pretty shocking stuff,” subcommittee chairman Senator Carl Levin said.

Among the findings was the revelation that HSBC and its US affiliate concealed more than $16 billion in sensitive transactions to Iran.

Asia markets rise on Wall Street rally

HONG KONG - Asian shares were broadly higher Monday on the back of a strong Wall Street rally and after Chinese data Friday eased overseas concerns over slowing growth in the world's second-largest economy.

Hong Kong's benchmark Hang Seng index was up 0.21 percent to 19,132.46 in mid-morning trade, Sydney jumped 0.75 percent to 4,112.7 with resource stocks leading the way, and Seoul rose 0.18 percent to 1,815.91.

But Shanghai was down 1.20 percent to 2,159.69.

Tokyo was closed for a public holiday.

Official data released Friday showed the Chinese economy expanded 7.6 percent in the second quarter year-on-year, its slowest pace for more than three years due to ripples from the eurozone debt crisis and slow US recovery.

Premier Wen Jiabao warned Sunday that while there was "a lot of dynamism and momentum for economic growth", China's "economic rebound is not yet stable and economic hardship may continue for a period of time".

In the depths of the global financial crisis at the start of 2009 China's economy grew at a rate of 6.6 percent.
Beijing's full-year growth target is 7.5 percent.

In New York Friday, US stocks broke a six-day losing streak on the back of better-than-expected figures from banking giant JP Morgan Chase, despite the firm revealing $5.8 billion in losses at its London derivatives operation.

The Dow closed up 1.62 percent, or 203.82 points, at 12,777.09, the S&P 500 rose 1.65 percent and the tech-rich Nasdaq 1.48 percent.

Despite the evidence of slowing Chinese growth, Justin Harper, market strategist for IG Markets Singapore, told AFP: "The Chinese GDP data... came better than expected."

JP Morgan's figures, he added, sparked hopes of "a better than expected earnings season across the board for the big banks".

Traders were also looking to US Congressional testimony from Federal Reserve chairman Ben Bernanke on Tuesday and Wednesday for any hint on a third round of quantitative easing, DBS Group Research said in a report.

"As far as the market is concerned, it is a question of 'not if, but when' the Fed will move towards a third round of quantitative easing measures or QE3," the report said.

The US is China's biggest trading partner and on currency markets the dollar advanced against the euro, with the single currency fetching $1.2241 in morning Asian trade compared to $1.2248 in New York on Friday.
The euro also slipped against Japan's currency, buying 96.79 yen from 97.08 yen. The US dollar traded at 79.06 yen from 79.17 yen.

Oil was down in Asian trade Monday with New York's main contract, light sweet crude for August delivery, shedding 37 cents to $86.73 a barrel, and Brent North Sea crude for delivery in August retreating five cents to $102.35.

Gold was worth $1,588.10 an ounce at 0340 GMT, compared with $1,583.22 on Friday.

Asian shares fall on S. Korea, Japan bank action

HONG KONG - Asian markets plunged Thursday on growing fears of a regional slowdown after South Korea unexpectedly cut interest rates and Japan's central bank failed to announce major new stimulus measures.

The news spooked investors who were already nervous a day before China releases key data expected to confirm slowing growth in the world's second-biggest economy.

Tokyo fell 1.48 per cent, or 130.99 points, to end at 8,720.01, while Seoul closed down 2.24 per cent, or 41 points, at 1,785.39.

Hong Kong stocks closed 2.03 per cent, or 394.76 points, lower at 19,025.11, amid concern over the Chinese economy. But Shanghai ended up 0.46 per cent, or 10.11 points, at 2,185.49, on selective buying.

Sydney fell 0.70 per cent, or 28.5 points, to end at 4,068.0 after weak June jobs figures, which saw the unemployment rate rise to 5.2 per cent.

By cutting its key interest rate 25 basis points to 3.00 per cent, South Korea's central bank joined an international drive to ease the impact of the eurozone debt crisis that threatens export-dependent Asian economies.

The bank said in a statement the domestic economy was under pressure "due mostly to the increase in euro area risks and the sluggish economies of its major trading partners".

The reduction was the first since February 2009, when the key rate hit a record low of 2.00 per cent.
"The move was taken as a sign that the Korean economy is weakening." said Jackson Wong, an investment manager at Tanrich Securities.

The European Central Bank and China's central bank cut their rates last week, while Brazil on Wednesday slashed its rate to a record low.

But the Bank of Japan took no major new action despite lowering its growth forecast for the fiscal year, to 2.2 from 2.3 per cent, surprising some analysts.

Following a two-day policy meeting, the bank said it would keep rates steady at zero to 0.1 per cent and fine-tuned a 70 trillion yen (US$880 billion) asset-purchase programme but the size of the policy tool remained steady.

The bank said it would reduce the amount of fixed-rate loans it offers by five trillion yen and increase the purchase of treasury discount bills by the same amount, but observers said the move would have little impact.

Although expectations of major action by the bank had been waning in recent weeks, analysts were disappointed given the recent moves by other central banks.

"After rate cuts by Korea and Brazil, it's just odd that the BoJ is not playing ball like everyone else," said Hideyuki Ishiguro, strategist at Okasan Securities in Tokyo.

"Stock investors feel that the BoJ is too tentative, too little, and too late on policy, and that it lacks a sense of duty to support the market," he told Dow Jones Newswires.

Asian stocks slipped as soon as they opened, following a lead in the US after the minutes of the Federal Reserve's June meeting showed the rate-setting committee split on whether to provide more stimulus.

Several top policymakers urged the central bank to look at new tools to bolster the financial system amid a weak recovery, but the minutes also showed the Fed split on how, when and if to provide more stimulus.

The Dow Jones Industrial Average finished down 0.38 per cent.

The flood of news from the region overshadowed developments in the eurozone, where optimism about an austerity package in Spain was largely offset by worries that Italy may have to tap a eurozone rescue fund, dealers said.

On currency markets, the euro slipped against major currencies in early European trade to fresh two-year lows. It bought $1.2185 and 96.67 yen, from $1.2238 and 97.58 yen in New York late Wednesday.

The dollar weakened to 79.29 yen from 79.74 yen in New York.

Gold was worth $1,564.75 an ounce at 1125 GMT, compared with $1,578.20 late Tuesday.

In other markets:
Taipei fell 1.75 per cent, or 126.98 points, to 7,130.93.

Taiwan Semiconductor Manufacturing Co lost 3.07 per cent at Tw$75.7 while Hon Hai Precision slipped 3.11 per cent to Tw$87.1.

Wellington rose 0.65 per cent, or 22.56 points, to 3,501.40.

Telecom Corp. was up 2.2 per cent at NZ$2.58 after rival TelstraClear was sold to Vodafone, and market heavyweight Fletcher Building held steady on NZ$6.09.

Manila slipped 0.58 per cent, or 0.25 points, to 5,205.19.

Philippine Long Distance Telephone Co. shed 0.3 per cent to 2,698 pesos and conglomerate Ayala Corp. slid 4.3 per cent to 457.60 pesos.

Singapore closed down 0.58 per cent, or 17.27 points, at 2,972.04.

Wilmar International fell 1.94 per cent to Sg$3.53 and DBS Group shed 0.56 per cent to Sg$14.12.
Jakarta closed 0.87 per cent, or 35.01 points, lower at 3,984.12.

Coal miner Bukit Asam fell 3.6 per cent to 14,900 rupiah and tin miner Timah slid 3.4 per cent to 1,420 rupiah.

Kuala Lumpur slipped 0.24 per cent, or 3.96 points to finish at 1,625.49.

YTL Corp lost 3.1 per cent to 1.88 ringgit while Telekom Malaysia gained 1.2 per cent to 5.81 ringgit.

Bangkok fell 1.29 per cent, or 15.54 points, to 1,193.13

Banpu lost 1.30 per cent to 454.00 baht, while PTT closed 1.20 per cent lower at 329.00 baht.
Mumbai fell 1.47 per cent, or 256.59 points, to 17,232.55.

IT heavyweight Infosys slumped 8.15 per cent to 2,265.25 rupees while rival Wipro fell 3.98 per cent to 359.3.

Asian markets fall on Wall Street lead

HONG KONG: Asian markets fell in morning trade Wednesday, following a decline on Wall Street and amid renewed scepticism over eurozone efforts to stem the debt crisis.

Tokyo was down 0.37 per cent, Hong Kong slipped 0.25 per cent and Seoul was off 0.36 per cent. Sydney was flat, slipping 0.05 per cent, as was Shanghai which edged down 0.03 per cent.

US stocks closed sharply lower on Tuesday on concerns over American corporate earnings and a slump in confidence registered by a US small-business survey.

The Dow Jones Industrial Average dropped 0.65 per cent, while The S&P 500 fell 0.81 per cent and the tech-rich Nasdaq slipped 1.00 per cent.

Meanwhile, concerns over the eurozone overshadowed the bloc's deal Tuesday to help Spain with 30 billion euros ($37 billion) this month for its distressed banks and an extension to a deadline to cut its public deficit.

"There is a broad framework to deal with the crisis, but uncertainty remains over whether it will work," said Kenichi Hirano, operating officer at Tachibana Securities.

"Participants will likely maintain their wait-and-see approach over the European situation."

Rates of return on Spain's benchmark 10-year bonds eased Tuesday after the deal at a meeting of eurozone finance ministers, slipping to 6.778 per cent, sharply lower than the danger level of 7.023 per cent at close the previous day.

But analysts remained sceptical, warning that European leaders may have once again done too little too late to convince the markets.

"There is really little here that will get Spanish yields to fall to any great degree and there remain questions over how quickly anything can be done in order to bring yields lower," said Derek Halpenny at Bank of Tokyo-Mitsubishi.

Analysts are also concerned Germany's top court could delay ratification of a permanent eurozone rescue fund, the European Stability Mechanism, which is to be used to recapitalise Spanish banks, easing pressure on public bonds.

The constitutional court was expected to rule by the end of the month whether the president should be permitted under constitutional law to sign the legislation into law, but has hinted at a possible further delay.

On currency markets, the euro edged up to $1.2261 in Asian trade compared with $1.2251 in New York late Tuesday. It had dived to a new two-year dollar low in Tuesday European trade of $1.2235.

The common currency was at 97.27 yen, in line with 97.26 yen in New York. The dollar slipped to 79.31 yen against 79.41 yen.

Trade was slow Wednesday, with concerns about China also weighing on markets as investors awaited more key data later in the week, including second-quarter GDP, to gauge how fast the world's second-largest economy is slowing.

Oil prices rose on bargain-hunting. New York's main contract, light sweet crude for August delivery, gained 28 cents to $84.19 a barrel and Brent North Sea crude for delivery in August rose 28 cents to $98.25.

Gold was worth 1574.60 an ounce at 0310 GMT, compared with $1,593.10 late Tuesday.

Asian stocks, euro rise as Spain banks get lifeline

HONG KONG: Asian markets and the euro rallied Monday after the eurozone agreed to lend Spain up to US$125 billion to save its banks, but analysts warn the deal is just a sticking plaster for Europe's wider problems.

The weekend also saw China release a mixed bag of data that, despite not being as bad as expected, was unable to soothe dealers' concerns over the world's second biggest economy. But it did provide hope that Beijing will introduce more easing measures.

Tokyo surged 1.96 percent, or 165.64 points, to 8,624.90 and Seoul jumped 1.71 percent, or 31.40 points, to end at 1,867.04.

Hong Kong climbed 2.44 percent, or 451.29 points, to 18,953.63 and Shanghai gained 1.07 percent, or 24.41 points, to 2,305.86.

Taipei rose 1.72 percent, or 120.58 points, to 7,120.23.

Manila closed 1.64 percent higher, adding 81.78 points to 5,075.85.

Sydney was closed for a public holiday.

On forex markets the single currency bought US$1.2630 and 100.50 yen against US$1.2514 and 99.49 yen in New York on Friday.

The US dollar was trading at 79.57 yen from 79.49 yen.

After an emergency video conference lasting more than two hours on Saturday, eurozone finance ministers issued a statement saying they were "willing to respond favourably" to a Spanish plea for help for its stricken lenders.

Spain's Economy Minister Luis de Guindos insisted the handout was not a rescue but a loan that imposes conditions on the banks.

However, it marked a dramatic climbdown for Madrid, which recently denied it needed any outside aid.

EU Economic Affairs Commissioner Olli Rehn said the Spain deal was critical to reassure jittery markets.

"It is a very clear signal to the market, to the public, that the euro (area) is ready to take decisive action in order to calm down market turbulence and contagion," Rehn said.

Stock markets in Europe opened sharply higher on Monday.

In the first few minutes of trade Madrid soared 5.8 percent, with Bankia -- the lender that asked the government for billions of dollars in aid -- rocketing almost 20 percent.

London's FTSE rose 1.80 percent, the Paris CAC 40 surged 1.98 percent and Frankfurt added 2.04 percent.

Monday's surge in the stock markets marked a rebound from recent weeks as traders have become nervous about Spain's precarious financial position as well as a possible Greek exit from the euro area.

The deal was hailed by Germany, France, Japan, China and the United States as well as the International Monetary Fund.

"Sentiment is in a risk-on mode and the news is giving the market a sense of relief," Kengo Suzuki, currency strategist at Mizuho Securities, said.

But Goldman Sachs warned that there were still problems in the eurozone's financial system.

"(It's a) positive near-term development for Spain, and in particular for its banks. But it does not solve Spain's overall fiscal and macroeconomic challenges, which remain substantial", Goldman said in a research note.

It added that the region's crisis "continues to be addressed on a country-by-country basis rather than at a systemic level".

Yuji Saito, director of foreign exchange at Credit Agricole Bank in Tokyo, said questions also remained about details of the bank deal, as uncertainty looms over Greek elections aimed at ending a political stalemate in the debt-riddled nation.

"The agreement won't solve the debt concerns completely because the question remains how and who will give money to Spain, and of course the Greek election next week," Saito told Dow Jones Newswires.

Despite efforts by policymakers, the eurozone crisis has now spread to the region's fourth-biggest economy -- Spain's is twice the combined size of those of Greece, Ireland and Portugal, which have also needed a bailout.

Spain finally sought aid as its borrowing costs on the open markets soared and the price for fixing the banks' balance sheets, heavily exposed to a property bubble that burst in 2008, spiralled.

In China the government said Saturday that inflation eased to a slower-than-forecast 3.0 percent in May while industrial output grew at 9.6 percent year-on-year, also weaker than expected.

And on Sunday figures showed that exports and imports shot up 15.3 percent and 12.7 percent respectively last month.

The numbers will give policymakers room to ease monetary policy further and come days after Beijing cut interest rates for the first time since the end of 2008.

The news from Europe helped oil post big gains.

New York's main contract, light sweet crude for delivery in July, soared US$1.63 to US$85.73 per barrel in afternoon trade. Brent North Sea crude for July delivery added US$2.63 to
US$101.10.

Gold was at US$1,697.50 an ounce at 0810 GMT, compared with US$1,577.05 late Friday.

Asian markets rise after heavy sell-off

HONG KONG: Asian markets climbed on Tuesday and the euro clawed back some of its losses as dealers took a breather from a recent heavy sell-off caused by concerns over the eurozone.

Tokyo rose 0.75 percent as the yen lost some of its recent strength, Hong Kong was 1.03 percent up, Shanghai gained 0.52 percent, Sydney added 1.37 percent and Seoul climbed 0.68 percent.

With little to drive sentiment after the weekend analysts said there was an opportunity to buy after most regional bourses fell into negative territory for the first time in 2012.

The "mostly flat performance in New York, and a pause in the yen's strength are likely to invite some buying" on Tuesday, Rakuten Securities senior market analyst Masayuki Doshida said.

But jitters over the eurozone debt situation and concerns over the state of the global economy are likely to weigh on sentiment, Doshida told Dow Jones Newswires, signalling that any gains may be limited.

On Wall Street the Dow fell 0.14 percent, the S&P 500 was flat and the Nasdaq Composite gained 0.46 percent.

Spanish Prime Minister Mariano Rajoy called at the weekend for a banking union in Europe, which would be able to provide aid to lenders, especially in Spain, a move that was picking up support in France and at the European Central Bank (ECB). However, Germany remained strongly opposed for the moment.

Global markets have been hammered since the start of May as Europe's debt troubles returned after a Greek general election saw a strong showing for anti-austerity parties, while Spain's bank crisis has left the already creaking economy teetering.

Market players will be looking to the result of a conference call later in the day between the Group of Seven finance ministers to discuss Europe's crisis, in particular Spain's travails.

In Europe the ECB will hold a rate-setting meeting Wednesday, with investors looking to see if it will announce any moves to kickstart the region's stuttering economy.

On currency markets the euro -- which last week hit a 23-month low versus the dollar and a near 12-year low against the yen -- regained a little ground.

The common unit bought $1.2534 and 98.18 yen in early Asian trade, up from $1.2494 and 97.89 yen in New York late Monday. The dollar was flat, buying 78.35 yen.

Oil prices rose in early trade. New York's main contract, West Texas Intermediate crude for July delivery, was 85 cents higher at $84.83 a barrel and Brent North Sea crude, also for July, rose by 54 cents to $99.39.

Gold was at $1,621.50 an ounce at 0230 GMT, compared with $1,622.08 late Monday.

ING seeks suitors for Asian life-insurance business

HONG KONG - ING has sent out information booklets for the sale of its Asian life-insurance business to some potential suitors and asked them to submit first-round bids by the third week of next month, sources told Reuters.

ING is selling the insurance- and investment-management businesses separately, in a deal that could fetch in excess of US$6.5 billion (S$8 billion), sources said.

Information memorandums (IMs) contain financial details of the businesses being sold, which will help suitors arrive at their bid values.

By sending out IMs, the bailed-out Dutch bank and insurer has set in motion an auction which has generated interest from global insurers keen to get a foothold in Asia's rapidly growing insurance industry.

"The starting gun has kind of gone off," one person familiar with the matter told Reuters.

At least a dozen global and Asian insurers - including Metlife, Prudential Financial, Manulife Financial Corp and AIA Group - have expressed interest in participating in the auction, sources said.

ING must spin off its insurance- and investment-management operations by the end of next year, in return for European Commission approval for 10 billion euros (S$16.5 billion) of Dutch state aid received in 2008.

An ING spokesman in Hong Kong declined to comment. Sources declined to be identified as the sale process is confidential.

The investment-management business is being sold in a separate auction and the IMs for that sale are expected to go out this week, sources added.

Some analysts estimate the investment-management business to fetch US$500-600 million.

While ING's preference is to sell the whole Asian life-insurance operations in seven countries in one deal, it will allow suitors the option to bid for some specific operations, sources added.

South Korea and Japan account for about two thirds of ING's Asian business but Japan may prove to be a stumbling block in the auction due to the 18 billion euros' worth of high guarantee variable-annuity policies the Japan operation has on the books.

Temasek buys $3b ICBC shares

HONG KONG/SINGAPORE - Temasek bought US$2.3 billion (S$3 billion) worth of Industrial and Commercial Bank of China's (ICBC) Hong Kong-listed shares from seller Goldman Sachs, piling into three of China's top four banks and raising its bet on the world's second-biggest economy.

The deal for ICBC takes Temasek deeper into China's banking industry, which has grown from insolvency six years ago to become a sector that holds four of the world's top 10 banks by market value.

Mr Ding Wei, Temasek's China head, told Reuters that it bought into ICBC because the price was reasonable and the investor was positive about the bank and China's long-term development.
Temasek already owns stakes in China Construction Bank and Bank of China.

China assets accounted for 20 per cent of its portfolio as of March last year.

Mr Song Seng Wun, an economist at CIMB, said: "Temasek has laid out its strategy before on where it thinks growth is. Within Asia, China anchors the growth, so Temasek is putting money where its mouth is."

The latest purchase was of 3.55 billion H-shares, or about 1 per cent of ICBC, the world's largest bank by market value.

Temasek now has a 1.3 per cent stake in ICBC, a Temasek spokesman said. This includes ICBC shares that the investor owns directly, as well as various other stakes held by Temasek-linked companies.

China's banking industry has come under fire lately, as customers and politicians have cried out that the sector's massive profits are coming at the expense of citizens.

Low deposit rates, coupled with steady customer fees, are at the heart of the protests.

Goldman's block trade is in line with its plan to reduce its stake in ICBC, which it bought before the Chinese bank's 2006 initial public offering (IPO).

After the sale - its fourth - Goldman has roughly US$3 billion worth of ICBC shares remaining.

Goldman sold the Hong Kong-traded shares of ICBC at HK$5.05 each (S$0.82), or a 3.1 per cent discount to last Friday's closing price.

The other roughly US$200 million worth of shares were sold to other institutional investors, a source said.

Hong Kong shares of ICBC, which has a market value of US$240 billion, fell as much as 1.7 per cent early yesterday but pruned the losses to be down 0.8 per cent in the afternoon, in line with the broader market.

Its shares are up about 12 per cent so far this year, in line with a similar rise on the benchmark Hang Seng Index.

Besides Goldman, American Express (Amex) is the only major foreign financial institution that holds shares in ICBC.

Amex holds about 638 million shares in ICBC, or less than 1 per cent of the bank's Hong Kong-listed shares.

Mr Sanjay Jain, head of Asian financials research at Credit Suisse, said: "The sale does not affect ICBC at all, and the overhang will be removed when Goldman disposes of the remaining (ICBC shares), hopefully in one go."

Temasek's financial-services portfolio includes stakes in DBS Group, Indian lender ICICI Bank and Standard Chartered.

Bank of America, Royal Bank of Scotland and UBS are among the foreign banks that have sold large stakes in Chinese banks over the past few years.

Such sales have been an attractive way to raise capital or reduce earnings volatility.

Goldman first bought 4.9 per cent of ICBC for about US$2.6 billion before the 2006 IPO, which was then the world's biggest public offering.

The latest stake purchase comes after Temasek, which manages about US$150 billion in assets, raised about US$800 million since the start of the year in three significant selldowns in its portfolio companies.

This included a 1.4 per cent stake sale in ICICI Bank.

Temasek is also selling its 67.4 per cent stake in Indonesia's Bank Danamon to DBS in exchange for DBS shares, in a deal that is awaiting regulatory approval.

Asian thirst for wine feeds new investment market

HONG KONG: Asia's thirst for rare and fine wine is moving beyond the dining table as the industry seeks to tickle the region's capital markets as well as its taste buds.

China is already the fastest-growing wine consumption market globally, and industry experts say wealthy Chinese business people are now also developing an appetite for the investment opportunity that wine offers.

"Wine is a very passionate subject, much more so than stocks and shares. It's a passion as well as an investment for our clients," said Stephen Wickens, the managing director of Wickens & Co, a Hong Kong-based wine investment firm.

"It's a very safe investment and it's very attractive at this time when people are uncertain about the stock and property markets."

Two thirds of the 18-month-old company's clients, totalling about 500, come from China and Hong Kong. Wickens reckons his client base will double next year.

"Right now Asia is really driving the demand. The traditional markets of Europe and America are very slow," he said on the sidelines of a wine trade fair in Hong Kong this month, which drew a record 934 exhibitors.

Hong Kong has capitalised on the rapid expansion of personal wealth in China to become the dynamic centre of Asia's wine trade since it abolished duties on wine imports in 2008.

Wine imports are poised to set a new record after surging nearly 60 per cent year-on-year in the first nine months of 2011 to US$940 million. The figure stood at $895 million in 2010, up 73 per cent from $517 million in 2009.

The wine industry council in the French region of Bordeaux says local producers saw a 92 per cent surge in export volumes to China in the 12 months to July, and a 69 per cent increase to Hong Kong.

To capitalise on this, businesswoman Ling Zhijun has just launched Dinghong, mainland China's first investment fund specialising only in wine -- available only to those with one million yuan (US$160,000) or more at their disposal.

She is waiting for the green light from authorities to start raising money, but says she already has investment pledges from a dozen people and will be able to collect 200 million yuan by the end of the year.

"We're banking on a return on investment of 15 per cent a year," she said, adding she chose to focus only on French wines because those from the New World are "more standardised, a bit like Starbucks coffee".

Hong Kong's Wing Lung Bank, meanwhile, launched a wine financing service, the first in the southern Chinese city, in April this year to allow investors to borrow to buy wine at designated merchants.

Buyers can borrow up to HK$5 million (US$650,000) with a repayment period between one and five years, and the response has been "overwhelming", said assistant general manager William Tang.

"Like many other businesses, the wine industry takes advantage of Hong Kong as the gateway to mainland China, where increased prosperity and changes in lifestyle have led to a significant rise in the demand for wine," he said.

"People in Hong Kong and China have become more knowledgeable over their favourite wines. All of these help raise people's interest in investing or purchasing wine, resulting in the growing demand on wine financing services."

But if they are looking for a place to shelter from the headwinds buffeting the global economy, Asia's new wine speculators might be disappointed. Wine prices have fallen about 15-20 per cent this year, according to Wickens.

"This is a market correction. It's not a bubble bursting or another disaster in the market, and we still see some wine going up in value, such as the Domaine de la Romanee-Conti and Petrus," he said.

"Wine is not just a piece of paper, it's a physical item. It has some tangible value, it's unlikely to go zero," he added.

Investors are advised to put their money away for the medium to long term, and target batches of young wines at their initial release price.

Wickens said certain "blue-chips" like the Mouton Rothschild 2006, which currently fetches about HK$6,300 (US$800) per bottle, and Chateau D'Yquem 2007, at HK$4,000 a bottle, could return 25-30 per cent after three years in a cellar.

"For a 2004 bottle of Lafite, which is not a great vintage -- two years ago it was selling at 5,000 pounds (US$8,000) a case and now it's about 8,000 pounds.

Even though it's not a great vintage, it has good return," he said.

The wine can also be bought "en primeur", where a specific vintage of wine is bought before it is bottled and sold in the market two or three years later.

"It's becoming increasingly interesting to consumers, it's an alternative investment," said Geordie Willis from the Hong Kong unit of Britain's oldest wine and spirit merchant, Berry Bros & Rudd, which has supplied wine to the British royal family.

He said the tight supply of fine wine, due to the limits of how much can be produced each year, make it a scarce commodity.

"It is a product which is improving in terms of quality, diminishing in terms of quantity and the market is enlarging in terms of the size of the customers," he said.

"There are more companies coming to us and there are more private investors who are trying to diversify their portfolio. It's growing all the time."