World stocks mixed in holiday-thin trading

[December 30, 2010]  HONG KONG (AP) -- World stock markets fluctuated in narrow ranges Thursday as fewer investors participated in the market ahead of the New Year holiday while Japan's Nikkei index fell on the last trading day of the year due to a firming yen.

In Europe, the FTSE-100 index of leading British shares was down 2.72 points, or less than 0.1 percent, to 5,993.64, while Paris' CAC 40 index was down 5.17 points, or 0.2 percent, to 3,885.48. Germany's DAX lost 9.31 points, or 0.1 percent, to 6,986.43.

Wall Street was set to open slightly higher, with Dow futures up by 5 points at 11,537.00. Broader S&P futures gained 0.8 points to 1,256.50.

Trade was sluggish and thin with many investors out for the holidays and unwilling to place bets toward the end of a year.

It was the last full trading day of the year for many major Asian and European markets. Bourses in Australia, New Zealand, Hong Kong, Singapore, France and Britain will have a shortened session on Dec. 31 while those in Japan, South Korea and Germany will be closed all day, with trading resuming on Jan. 4.

"The market will continue to be quiet overall. Turnover will continue to be low," said Castor Pang, research director at Cinda Securities in Hong Kong.

The Japanese benchmark Nikkei 225 stock average fell 115.62 points, or 1.1 percent, to close at 10,228.92. Investors sold export-linked stocks as the yen gained ground against the dollar.

A strong yen hurts Japanese exporters as it cuts the value of their repatriated profits and makes their products less competitive abroad.

Shares in Toyota Motor Corp. fell 0.9 percent to 3,220 yen. Honda Motor Co. lost 1.2 percent to 3,215 yen. Sony Corp. was down 1 percent at 2,927 yen on Thursday.

Apart from the Nikkei, China's Shanghai Composite Index was up 8.05 points or 0.3 percent to end at 2,759.58 while Hong Kong's Hang Seng index was up 30.04 points or 0.1 percent, to close at 22,999.34.

In the absence of any other market-moving news, some investors could be worried that Chinese stocks might be dragged down by bank and property shares because of fears of further interest rate increases by Beijing authorities, Pang said.

Officials raised a key interest rate on Saturday, the second such increase in just over two months, in an attempt to keep a lid on surging inflation. That would hurt property companies because it would cost more for people to borrow money to buy homes. Banks would see their profits cut by lower demand for loans, Pang said.

Elsewhere, South Korea's Kospi edged up 7.51 points or 0.4 percent to finish at 2,051.00. Benchmarks in Australia, India, Singapore and Taiwan were all marginally higher.

In currencies, the dollar fell to 81.46 yen in Tokyo on Thursday from 81.63 yen in New York late Wednesday. The euro rose to $1.3233 from $1.3221.

Benchmark crude for February delivery rose 20 cents to $91.32 a barrel on the New York Mercantile Exchange.

[Associated Press; By KELVIN CHAN]

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