Asian markets mixed, eyes on US fiscal talks

Asian markets mixed, eyes on US fiscal talks

HONG KONG - Asian markets were mixed on Tuesday following a positive lead from Wall Street, with traders hopeful for a deal in the United States to avert the fiscal cliff.

The dollar edged up slightly against the yen after falling in New York trade ahead of a US Federal Reserve meeting that begins later in the day, with expectations it will announce more monetary easing.

Tokyo ended flat, edging down 8.42 points to 9,525.32, Sydney gained 0.4 per cent, or 18.1 points, to end at 4,576.0 while Seoul added 0.37 per cent or 7.2 points to 1,964.62.

Hong Kong ended 0.21 per cent higher, adding 47.22 points to close at 22,323.94, while Shanghai shed 0.44 per cent, or 9.07 points, to 2,074.70.

In Hong Kong, banking giant HSBC rose 0.3 per cent after it said it will pay a record US$1.9 billion settlement in the US over allegations of money laundering.

And fellow British lender Standard Chartered was up 0.60 per cent after being told by the US Treasury to pay the United States US$327 million to settle charges it violated US sanctions on Iran, Myanmar, Libya and Sudan.

Talks in Washington aimed at agreeing a plan to avoid hundreds of millions of dollars in tax hikes and spending cuts taking effect on January 1 were said to be progressing, with President Barack Obama saying he was open to compromise.

If there is no deal the US economy will likely tip back into recession.

Buoyed by last month's re-election, Obama has said a deal will not be done unless there are tax rises for the rich - an idea his Republican rivals have previously set themselves dead against.

However, reports said he and Republican House Speaker John Boehner were making headway.

Joe Bracken, BT Investment Management head of macro strategies in Sydney, said traders were buying higher yielding assets, reflecting their confidence.

"There is a mild risk-on sentiment because of expectations that the fiscal cliff situation will be resolved," he told Dow Jones Newswires. "If it does get resolved, you are going to have a very good start to 2013."

Wall Street ended in positive territory. The Dow rose 0.11 per cent, the S&P 500 was flat and the Nasdaq gained 0.30 per cent.

The Federal Reserve's policy committee begins its two-day meeting on Tuesday and traders are keeping an eye on what it will do as the end approaches of its "Operation Twist" - selling short-term debt to buy longer-term debt.

There are signs policymakers will replace it with more outright bond purchases, or "quantitative easing", aimed at lowering interest rates to encourage businesses to invest and hire.

On forex markets the dollar eased in New York as traders bet there would be more cash flooding the markets as a result of further easing but it rose slightly in Asia.

In afternoon trade the greenback bought 82.36 yen, up from 82.33 yen in New York late Monday, while the euro bought US$1.2947, from US$1.2939.

The euro was at 106.61 yen from 106.53 yen.

Oil prices rose, with New York's main contract, light sweet crude for delivery in January, gaining 12 cents to US$85.75 a barrel and Brent North Sea crude for January delivery up 45 cents to US$107.70.

Gold was at US$1,709.42 at 0840 GMT compared with US$1,708.09 late on Monday.

In other markets:

- Taipei was flat, adding 4.19 points to 7,613.69.

TSMC rose 1.87 per cent to Tw$98.3 while smartphone maker HTC fell 2.34 per cent to Tw$271.5.

- Manila surged 1.28 per cent, or 73.96 points, to 5,831.50.

- Wellington fell 0.11 per cent, or 4.59 points, to 4,026.18.

Telecom was down 1.32 per cent at NZ$2.235, Chorus fell 0.37 per cent to NZ$2.72 and Fletcher Building added 1.44 per cent to NZ$8.45.

 

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