Christmas comes early for US shops

Published on Monday 28 November 2005 12:05

ASIAN stock markets rose overnight, led by exporters whose prospects brightened as the US dollar hit two-year highs versus the yen, and investors cheered a sparkling start to the year-end holiday shopping season.

The dollar extended recent gains, closing in on 120 yen, while gold advanced to $498 an ounce, an 18-year high, as dealers eyed $500. Crude oil slid more than one per cent to near $58 a barrel.

US consumer spending jumped during the weekend - the perennial start to a shopping season that typically accounts for about a quarter of annual retail sales, according to a US trade group.

"News of a strong start to the US Christmas shopping season is adding an extra boost to the Tokyo market, which has been buoyed by earnings optimism," said Susumu Abe, manager of the information and investment department at Mito Securities.

Exporters rose across the region, from Taiwan's AU Optronics to South Korea's LG Philips LCD and Japanese auto makers and consumer electronics firms such as Hitachi Sony Corp rose 4.6 per cent to its highest level of the year.

Japan's Nikkei ended the morning session up 0.63 per cent, on pace for an eighth straight session of gains. MSCI's index of non-Japan Asian shares added 0.1 per cent.

Toshiba, the world's third-largest maker of notebook computers, gained 3.4 per cent, and Toyota, the world's second-biggest auto maker, rose two per cent. The stronger dollar makes Asian products more competitive in the huge US consumer market and boosts profits when dollar earnings are brought home.

A report by the US National Retail Federation, the nation's largest retail trade group, said the average shopper spent $302.81 during the weekend, bumping total weekend spending to $27.8 billion - a 22 per cent increase over last year's $22.8 billion.

Customer Growth Partners LLC's annual forecast called for a holiday sales increase of 7.1 per cent to 7.5 per cent over a year ago, with Microsoft's Xbox 360, Apple's iPod and similar MP-3 players noted as hot sellers.

South Korea's KOSPI stock index put on 0.3 per cent after tagging an all-time high. "US consumers are spending again, and that helps the IT sector. We could see strong exports this month and next," said an analyst at Meritz Securities.