Tuesday, December 15, 2009

Asian Stocks Mixed, but Nikkei Rises After Report on Delayed Capital Rules

. Tuesday, December 15, 2009

By stockOzone team

Japanese bank shares surged on Wednesday after a report of a possible delay in new global bank capital rules, while the Australian dollar fell on decreased chances of an interest rate increase in Australia in February.

Dealers scrambled to slash bets that the Reserve Bank of Australia would raise rates a fourth consecutive time after a top central banker said rates were already back in a normal range.

The news came as the Australian dollar was already in retreat after data showed the economy grew at a slower-than-expected pace in the third quarter.

In Japan, shares of leading banks posted double-digit gains, pushing up the Nikkei 225 index, after the Nikkei business daily reported that global banking regulators have agreed to establish a transition period of at least 10 years for new capital rules.

Shares of Mizuho Financial Group, the second-largest bank in Japan, after Mitsubishi UFJ Financial Group, vaulted nearly 18 percent and third-ranked Sumitomo Mitsui Financial Group surged 15 percent.

“One of the biggest problems for the Nikkei has been supply and worry about additional equity fundraising, and if this news is true it means that we don’t need to worry about this, especially in connection with banks, for a while,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities in Tokyo.

The Nikkei rose 1 percent in late morning trading.

Stocks in much of the rest of Asia eased as investors awaited to see if a statement from the U.S. Federal Reserve later in the day would signal any policy changes.

The MSCI index of Asia Pacific stocks outside Japan was down 0.5 percent, weighed by the materials and consumer staples sectors.

The South Korean Kospi was flat, as was the benchmark S.&.P/ASX 200 index in Australia.

In China, the Shanghai benchmark index was up 0.3 percent, and the Hang Seng in Hong Kong slipped 0.1 percent.

Stocks in Taiwan fell 0.6 percent.

March 10-year U.S. Treasury futures were up slightly after the cash market took a beating overnight after energy costs helped to push up producer prices in November for the biggest monthly rise since August.

The Australian dollar fell 0.6 percent to 90.05 U.S. cents to its lowest since Nov. 27, while March bill futures were up 0.12 point, indicating investors now see a lower chance of a policy rate rise in February after the central bank remarks and third-quarter GDP data that showed the economy grew a meager 0.2 percent from the previous quarter.

Disclosure: Author does not own any of the stocks discussed here.

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