HONG KONG : Asian stock markets trod water on Friday, with solid economic data from the United States providing support, but traders taking a wait-and-see attitude to Europe's stabilisation efforts.
Tokyo's Nikkei was flat, ending the session down just 7.46 points at 10,303.83 as it maintained its year-end buoyancy – the index has gained around 12 percent since November 1.
Sydney's S&P/ASX 200 ended the session down 0.44 percent, or 20.9 points, at 4,763.1, while Shanghai's Composite Index fell 0.15 percent, or 4.40 points, to 2,893.74.
However Hong Kong was up 0.20 percent, or 46.07 points, at 22,714.85 by the close.
Many smaller markets also ended the week with gains, with Seoul defying tensions on the Korean peninsula and Taipei touching a 31-month high at one point in the session as capital rolls into the tech-led economy.
US stocks closed higher Thursday after new claims for unemployment benefits fell last week to almost the lowest level of the year, while other data showed a 3.9 percent surge in construction of new US housing in November.
The numbers were positive for the dollar – generally a good sign for Japanese stocks – while the euro also held up pending completion of a European summit intended to tackle the eurozone's debt problems.
Traders appeared relatively relaxed about the eurozone's problems.
“Equity markets appear less sensitive to European sovereign debt problems,” Jamie Spiteri, head of trading at Shaw Stockbroking in Sydney, told Dow Jones Newswires. “Money is flowing into Australian equities before year-end and I see ongoing upside potential into the new year.”
Towards the close of the Asian day, ratings agency Moody's announced it was slashing its credit rating on Ireland by five notches from Aa2 to Baa1 because of increasing uncertainty about the country's economy and public finances.
On Thursday, Moody's warned it might further slash its Ba1 rating of Greece's government bonds, having also issued a warning on Spain.
At a summit in Brussels Thursday, European Union leaders agreed on a change in the bloc's rule-book, the Lisbon Treaty, enabling the creation of a permanent rescue fund for eurozone countries in crisis.
With Portugal and even Spain predicted to need aid like Greece and Ireland, EU President Herman Van Rompuy said they were “ready to do whatever is required to ensure the financial stability of the eurozone”.
Chinese shares remained constrained by worries about the likelihood of further measures to cool the mainland economy in the face of surging inflation.
“Concerns about (the potential) for policy tightening are still here,” said Zhang Xiang, an analyst at Guodu Securities. “Even though people widely expect December's consumer price index growth will decrease from November's… it's clear that inflationary pressure will remain high in the first half of 2011.” – AFP/ch
Channel News Asia