Asian stocks mixed, link date lifts Hong Kong and Shanghai

[HONG KONG] Asian markets were mixed on Monday as Japanese shares succumbed to profit-taking following last week's huge gains, while Hong Kong and Shanghai rallied after a launch date was announced for a trading link between the cities' exchanges.

The dollar retreated from multi-year highs despite another record close on Wall Street that came in response to broadly upbeat jobs data that did little to alter expectations of a US rate hike in mid-2015.

Tokyo slipped 0.51 per cent after ramping up gains of more than 10 per cent in the previous six sessions after the Bank of Japan unveiled fresh monetary easing measures.

Sydney dipped 0.64 per cent, while Hong Kong surged 2.30 per cent and Shanghai added 1.17 per cent. Seoul was up 1.20 per cent.

Dealers in Hong Kong and Shanghai cheered news that the delayed trading link between the two stock exchanges will start on November 17.

The connection - which is expected to allow the equivalent of US$3.8 billion a day in cross-border transactions - had originally been slated for last month, but was put off as pro-democracy protesters shut down sections of Hong Kong.

The link-up is expected to see volumes on both exchanges rise significantly.

However, the euphoria over the announcement was tempered by news that Chinese inflation was unchanged at 1.6 per cent in October, well off the government's target of 3.5 per cent and adding to fears about the strength of the world's number two economy. Data Saturday also showed growth in exports and imports slowed last month.

In the United States the Dow and S&P 500 ended with a third straight record close after the Labour Department said the economy added 214,000 jobs last month.

While that figure was weaker than the forecast 235,000, the previous two months' job gains were revised upward and the unemployment rate slipped to a six-year low.

The Dow edged up 0.11 per cent and the S&P 500 nudged 0.03 per cent higher, but the Nasdaq eased 0.13 per cent.

The result weighed on the dollar, which slipped from a seven-year high against the yen.

The greenback was at 114.36 yen Monday, down from 114.62 yen in New York and well off the 115.39 yen in Tokyo earlier Friday.

And the euro bought US$1.2458 and 142.49 yen against US$1.2456 and 142.78 yen in US trade.

Japan's Nikkei slipped on the strong yen.

"Given that a great deal of the market's gains over the last several days and months have come on the back of a stronger US currency, its weakness naturally invites profit-taking," said Nomura Securities equity market strategist Junichi Wako.

But he added that "a severe selloff is unlikely", partly because the Bank of Japan and government pension funds are known to be buying on the dip.

On oil markets US benchmark West Texas Intermediate for December delivery rose 20 US cents to US$78.85, while Brent crude for December was up 31 US cents to US$83.70.

Gold was at US$1,170.60 an ounce, compared with US$1,144.92 late Friday.


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