Nikkei closes last session of worst-ever year

Asia-Pacific shares were broadly higher with the Nikkei in Japan ending its last session of the year with a 1.3 per cent gain on the day, but a 42.1 per cent loss on the year – its worst annual fall.

Taiwan led the regional rally by gaining 4 per cent at one stage as the government said it would help key industries during the current slowdown, and amid reports that the island’s banks could open branches on the mainland of China next year. The Taiex closed 3.9 per cent higher at 4,589.04.

Early gains of 1 to 2½ per cent or more in Australia, Hong Kong and South Korea could not be sustained, however, and Hong Kong reversed direction to end with a 0.7 per cent loss. Overall, the FTSE Asia Pacific index was 0.5 per cent higher by late afternoon in Hong Kong.

Oil retreated from $40 a barrel overnight. Nymex light sweet crude was $39.90 in Asian trading.

The Nikkei 225 average closed its shortened pre-holiday session 1.3 per cent higher at 8,859.56 and the broader Topix index ended 0.5 per cent higher at 859.24. Trading will resume on Monday.

Fast Retailing, which owns the discount clothes shops Uniqlo, rose by 1.8 per cent to Y12,98 – an annual gain of more than two-thirds for the domestically focused company at a time when the broader market has fallen sharply as exporters have been hit by the strong yen. The currency has gained nearly a quarter in value against the dollar.

Firmer crude boosted Inpex, Japan’s largest oil explorer, by 5.1 per cent to Y698,000 its smaller rival AOC by 7.5 per cent to Y490.

Trading houses, which make much of their profit by dealing in commodities and energy, also rose. Mitsubishi was 2.8 per cent higher at Y1,238 and Mitsui gained 3.0 per cent to Y901.

Aioi Insurance, which gained 19 per cent on Monday on talk of a three-way merger with Mitsui Sumitomo Insurance Group and Nissay Dowa, fell by 5.0 per cent to Y460. MSIG fell by 3.5 per cent to Y2,785 and Nissay lost 4.8 per cent to Y550.

Hong Kong shares rose as much as 1.3 per cent but the Hang Seng index closed 0.6 per cent lower at 14,235.50 after figures showed the territory’s exports fell for the first time in five months in November. The main sub-index of mainland companies listed in the territory was 0.1 per cent lower at 7,786.19.

China Eastern Airlines fell by 8.5 per cent to HK$1.18 after saying it would raise Rmb7bn by issuing fresh shares – double the amount it previously planned.

However, oil’s earlier strength boosted the mainland explorer Cnooc by 8 per cent, although the company closed up by 4.3 per cent at HK$7.20. The oil refiner PetroChina rose by 2.0 per cent to HK$6.69.

Temujin International Investments jumped 90 per cent fter announcing it would buy a 30 per cent stake in a South Korean developer of car and electronics technology. Temujin closed 68.3 per cent higher at HK$1.01.

Australian shares rose as gold stayed close to the three-month highs reached on Monday and firmer oil supported commodity prices. The S&P/ASX 200 index closed 0.9 per cent higher at 3,654.20 after earlier gaining 1.4 per cent and losing as much as 0.6 per cent.

BHP Billiton, the world’s biggest miner, rose by 2.6 per cent to A$29.65 and Woodside Petroleum was 3.3 per cent higher at A$35.93. Lihir Gold gained 1.7 per cent to A$3.03 and Sino Gold Mining rose by 6.3 per cent to A$4.70.

The Korean won appreciated to its strongest level against the dollar since late October after the government reported the second monthly current-account surplus in a row. The won strengthened by 0.5 per cent to Won1,259.55.

The currency had weakened as far as Won1,524.57 in November and has lost more than a quarter in value against the dollar since the start of 2007. In Seoul, the Kospi closed 0.6 per cent higher at 1,124.47.