Asian markets cautious on US optimism, euro jitters

Tokyo's Nikkei index ended the session flat, gaining just 1.51 points to reach 10,311.29, while Sydney's S&P/ASX 200 closed up 0.34 per cent, or 16.2 points, at 4,784.00.

Hong Kong's Hang Seng fell 1.33 per cent, or 306.57 points, to 22,668.78, while in Shanghai the Composite Index fell 0.46 per cent, or 13.27 points, to 2,898.14.

Hong Kong had plunged 1.95 per cent on Wednesday weighed by a threat by ratings agency Moody's to downgrade Spain, in the latest sign of eurozone debt contamination.

Against that bad news, markets found some support from a strengthening dollar and data showing that US industrial output rose by a robust 0.4 per cent in November after a revised 0.2 per cent decline in October.

"If the trend for a weaker yen becomes more explicit on the back of a recovery in US economic conditions and rise in US bond yields, we anticipate a year-end rally in stocks," Masayoshi Yano, senior market analyst at Meiwa Securities, told Dow Jones Newswires.

In Tokyo, exporter stocks such as Canon, Toshiba, Hitachi and Honda all rose, helped by a weaker yen, although Toyota, Panasonic and Sony fell.

Shanghai was in more sober mood after rallying 2.88 per cent on Monday on relief that a widely expected interest rate rise had failed to materialise over the weekend.

Data on Saturday showed that annualised inflation had topped five percent in November for the first time in more than two years.

"Since the release of (the) November Consumer Price Index... and other recent data showing robust economic growth, people are worried the central bank will launch further policy tightening measures," said Zhang Zhuo, a strategist at Minsheng Securities.

Helping sentiment in Sydney was a decision by Australia's competition regulator giving conditional approval for an alliance between Virgin Blue and Air New Zealand. Virgin Blue gained 5.88 per cent, while rival Qantas slumped 2.57 per cent.

The dollar maintained its upward momentum in Asia as investors welcomed the strong US economic data and rising Treasury yields, while worries about the eurozone weighed on the region's common currency.

The dollar stood at 84.23 yen, unchanged from New York overnight, when it jumped sharply thanks to the rise in US industrial production.

The euro stood at $1.3212 and 111.30 yen, nearly flat from $1.3211 and 111.27 yen in New York, where the single European currency plunged on Europe's debt woes.

US stocks closed lower on Wednesday, with the Dow Jones Industrial Average falling 0.17 per cent, the broader S&P 500 index down 0.51 per cent and the tech-rich Nasdaq off by 0.40 per cent.

Oil fell in Asian trade Thursday, surrendering overnight gains that had been fuelled by a huge decline in US crude inventories.

New York's main contract, light sweet crude for January delivery, was off 16 cents at $88.46 a barrel. Brent North Sea crude, also for January, fell four cents to $92.16.

Gold closed at $1,384.00-1,385.00 an ounce in Hong Kong, down from Wednesday's close of $1,390.00-1,391.00.

In other markets:

-- Singapore rose 0.01 per cent, or 0.47 points, to 3,147.67 points.

Banking major DBS Group rose 22 cents to 14.12 Singapore dollars, while Singapore Telecommunications was flat at 3.09 dollars.

-- Manila fell 1.23 per cent, or 50.35 points, to 4,039.40.

Top-traded Aboitiz Power Corp. was down 1.85 per cent at 31.85 pesos while Megaworld Corp. slipped 2.57 per cent to 2.27 pesos. Alliance Global Group Inc. fell 5.21 per cent to 10.90 pesos.

-- Seoul fell 0.41 per cent, or 8.24 points, to 2,009.24.

-- Taipei rose 0.29 per cent, or 25.49 points, to 8,782.20.

Taiwan Semiconductor Manufacturing Co rose 1.71 per cent to 71.2 Taiwan dollars, while Huaku Development Co was 2.08 per cent higher at 93.1.

-- Wellington fell 0.13 per cent, or 4.15 points, to 3,293.78.

Fletcher Building slipped 0.4 per cent to 7.72 New Zealand dollars on jitters about its takeover bid for Australia's Crane Group, while Telecom rose 0.5 per cent to 2.17 on expectations it will dominate the government's planned broadband network.

-- Jakarta fell 2.37 per cent, or 86.58 points, to 3,571.74.

Carmaker Astra lost 5.5 per cent to 49,900 rupiah, Bank Rakyat fell 3.7 per cent to 10,350, while consumer goods producer Unilever ended down 4.1 per cent at 15,150 rupiah.

-- Kuala Lumpur fell 0.77 per cent, or 11.58 points, at 1,497.52.

Glove-maker Top Glove was down 6.10 per cent at 5.12 ringgit, palm oil firm KL Kepong shed 1.40 per cent to 21.06, while Petronas Gas rose 1.10 per cent to 11.34.

-- Bangkok fell 0.57 per cent, or 5.87 points, to 1,029.60.

Coal giant Banpu gained 12.00 baht to 802.00, while Siam Cement added 8.00 baht to 345.00.