Mixed trading in Asia; Australian unemployment figure rises

<p>Asian stocks were slightly lower on the back of flat overnight leads from the US and Europe.The MSCI Asia Pacific index was around 0.9% lower […]</p>

Asian stocks were slightly lower on the back of flat overnight leads from the US and Europe.The MSCI Asia Pacific index was around 0.9% lower at noon in Tokyo with all ten industry groups on the index down.

Tokyo Electric was a standout underperformer, down around 8% after newspaper reports speculated it could become the subject of a nationalisation policy.

Real estate stocks were lower in Singapore after the government imposed additional taxes on purchases of private residential property in a move to help contain speculators and rising prices.

Ahead of the European summit the Euro remained in a very tight trading range, last trading at slightly above 1.34 against the U.S. dollar. The Japanese Yen continues to slowly claw back some of last week’s losses with the USD/JPY last trading at around 77.65, still below levels desired by the BOJ.

In regional corporate news, state-backed Chinese insurer New China Life was reported to have filled around 60% of its IPO at around HK$28.5 which was towards the bottom end of the indicative range. The IPO is one of around 20 expected on the Hong Kong Exchange before the end of this year.

In economic news, Australia’s unemployment rate increased slightly in November to 5.3%. The rise in the level of unemployment to 5.3% does not come as a complete surprise to us. Yesterday’s GDP figures appeared strong on face value but they were for a period up to September and since then, markets have been fragile and so too corporate confidence.

The pace of rate cuts from the Reserve Bank of Australia (RBA) in both November and December would signal that the central bank was aware of the weakening labour market conditions. The almost 40,000 full time job losses in November will surprise many and although it was somewhat offset by the 33,600 increase in part time employment, composition isn’t the highest quality.

The Australian dollar fell slightly to last trade at around 102.58 U.S. cents.

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