Commodities Bolster Asian Markets as Investors Buy Metals
In Asia Tuesday Hong Kong's Hang Seng Index advanced 0.8% to 23,428 and China's Shanghai Composite Index rose 0.7% to 2,876. In Japan the Nikkei 225 Index slid 0.3% to 10,141.
Investors stashing money in commodities to shield investments from declining currency values got a big boost today as metals rose in London. Copper hit a record high of $8,973.50 per metric ton and gold hovered near record levels, hitting $1,422.65 per ounce. "Inflation is a big concern, and commodities are a good place to park your money if you're looking for an alternative investment to currencies," a trader at Guohai Liangshi Futures told Bloomberg. Other metals also saw gains including a 2.6% rise in the price of tin and a 1.8% surge in Zinc.
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Hong Kong-listed miners soared today with Zijin Mining gaining 4.1% and Real Gold Mining advancing 2.2%. Hong Kong jewelry retailers also benefited, attracting a bit of positive attention after a recent string of scandals have claimed headlines. One scam involved the sale of thousands of dollars worth of counterfeit gold, and last week 265 bars of gold were found stashed in a hidden compartment in a car, leading to the arrest of three gang members. Luk Fook Holdings, which sells jewelry and other accessories made of gold and gemstones, rocketed up 9.5% and King Fook rose 2.8%.
In the real estate sector, Wharf Holdings shot up 5.8% on speculation that commercial rents are poised to surge thanks to supply issues. Wharf owns and operates both the Times Square and Harbour City shopping malls in Hong Kong. Both are destinations for locals and tourists alike. Other developers also rose with Sun Hung Kai advancing 1.5% and Henderson Land adding 0.7%.
Other big winners included Foxconn, contract makers of mobile phones, which rose 3% and Cathay Pacific Airways, which gained 3.2% and Tsingtao Brewery, which gained 5% after announcing it is set to acquire another beer company.
In China gold companies also surged with Shandong Gold Mining and Zijin Mining both rallying 5.1%. Producers of other metals also rode the wave with Jiangxi Copper jumping 2.4% and Aluminum Corp. of China advancing 1.1%. Word among analysts is that copper inventories are dwindling and as demand outpaces supplies prices will skyrocket, reports nasdaq.com.
Developers in China rose with China Vanke climbing 2%, Poly Real Estate advancing 1.4% and Gemdale gaining 0.8%. Thanks to rampant inflation companies selling basic foods advanced as well: Bright Dairy & Food jumped 3.1% and Beijing Shunxin Agriculture leaped 1.7%. These gains were enough to overshadow losses by Chinese lenders to the tune of a 0.7% fall in Industrial & Commercial Bank of China and a 0.2% slide in China Construction Bank.
Japan's largest commodity trader, Mitsubishi Corp., was kept afloat by the high price of metals gained 0.4% even while other traders, like Marubeni which lost 0.5%, sank.
But fears that the yen will strengthen hurt exporters dependent on a weak yen to maximize the profits they earn abroad. Honda plunged 1.9%, Nissan sank 1.6%, Mazda slid 0.8% and Toyota dipped 0.6%.
Sony, which should be awash in pre-Christmas sales, was down 1.2%, Canon inched down 0.4% and even Nintendo, game-maker to the world, retreated 2.2%. The yen closed at 82.34 against the dollar today, much too high for exporters hoping for a windfall this holiday season.
