Asian markets mixed, Nikkei dips on profit-taking

HONG KONG - Asian markets began the week on a mixed note Monday, with the Nikkei sinking on profit-taking after breaking 11,000 in early trade, while a rally on Wall Street boosted a buying incentive.

The euro and dollar eased slightly against the yen after climbing in New York trade, while traders took heart from upbeat news from Europe, with indications that the troubled eurozone is slowly emerging from years of crisis.

Tokyo surged above the 11,000 mark for the first time since April 2010 in the morning as the yen extended its recent downward trend but profit-taking soon took hold and the index ended down 0.94 per cent, or 102.34 points, at 10,824.31.

Seoul dipped 0.36 per cent, or 6.98 points, to 1,939.71, while Hong Kong added 0.39 per cent, or 91.45 points, to end at 23,671.88.

Shanghai surged 2.41 per cent, or 55.21 points, to 2,346.51 after authorities said they would expand the number of securities for margin trading, boosting liquidity hopes.

Sydney and Kuala Lumpur were closed for public holidays.

On currency markets the dollar bought 90.81 yen in early Asian trade, from 90.87 yen in New York late Friday, while the euro was at 122.10 yen from 122.28 yen. The euro also bought $1.3440 from $1.3457 in New York.

Apart from a short-lived rally last week, the yen has seen a continued downtrend since November, when as Japan's opposition leader Shinzo Abe promised to push for a more aggressive easing of monetary policy.

Abe won a general election last month on that promise and after becoming prime minister has pressured the central bank to follow his government's policy lead, a move that has been welcomed by markets.

Last week the Bank of Japan adopted a two-per cent inflation target and set out plans for indefinite monetary easing.

The euro was also lifted by data Friday showing banks rushing to repay part of emergency funding totalling US$1.3 trillion provided by the European Central Bank a year ago to get them through a credit crunch.

ECB chief Mario Draghi told the World Economic Forum in Davos that he saw a new-found tranquillity in financial markets and said "all the indices point to a substantial improvement of financial conditions".

A survey of investor confidence hit its highest level since the start of the eurozone debt crisis in 2010, while another study of business sentiment was at a seven-month high.

In the United States another set of strong corporate results Friday - particularly Procter and Gamble and Halliburton - sent the Dow and S&P 500 surging.

The Dow rose 0.51 per cent to its best level since October 2007 and the S&P 500 climbed 0.54 per cent to finish above 1,500 points for the first time since December 2007, while the Nasdaq added 0.62 per cent.

The advances came despite data showing a surprise fall in US new home sales in December and a bigger-than-expected contraction in British economic growth.

Oil prices rose in Asia, with New York's main contract, light sweet crude for delivery in March gaining 20 cents to US$96.08 a barrel in the afternoon and Brent North Sea crude for March up two cents to US$113.30.

Gold was at US$1,658.90 at 0805 GMT compared with US$1,669.20 late Friday.

In other markets:

Taipei added 0.55 per cent, or 42.09 points, to 7,714.67.

Leading integrated circuits design house MediaTek gained 0.93 per cent at Tw$325.0 while Taiwan Semiconductor Manufacturing Co was 0.30 per cent higher at Tw$99.3.

Manila closed 0.40 per cent higher, adding 24.78 points to 6,192.42.

Energy Development Corp. gained 2.43 per cent to 7.15 pesos while Manila Electric Co. rose 3.37 per cent to 294.20 pesos but Ayala Corp. fell 0.27 per cent to 550 pesos.

Wellington rose 0.11 per cent, or 4.62 points, to 4,204.44.

Fletcher Building gained 0.11 per cent to NZ$9.21, Trade Me added 0.24 per cent to NZ$4.15 and Telecom put on 0.21 per cent to NZ$2.39.