beyondbrics

Asian markets fell on Thursday, with South Korean stocks down nearly 3 per cent from a two-year peak. In China, inflation sped to a 25-month high, raising expectations of further monetary tightening, but the Shanghai Composite gained, after Moody’s credit agency upgraded the rating of government bonds.

Joseph Stiglitz, the Columbia University economist, argued that India is more vulnerable to an asset bubble than China, saying that “strong economies that don’t yet have capital control become the focal point” for the liquidity injected the US Federal Reserve.

Stiglitz told a conference in Hong Kong that China’s post-crisis recovery was an “impressive success story”, commending its investment in infrastructure to boost future economic growth.

In China, the Shanghai Composite gained 1 per cent to 3,147.74. Oil stocks were the star performers – with PetroChina up 7.7 per cent to a six-month high, and Sinopec up 5.2 per cent – on news that domestic demand rose 12 per cent in October compared to 2009.

Agricultural Bank was up 1.1 per cent, as banks also recovered part of their recent losses. Moody’s mentioned the strength of Chinese lenders as a key reason for raising the rating of government bonds from A1 to Aa3, saying that “the dominant banks in the system will not likely pose any sizable contingent liability risk to the government’s balance sheet.”

In Hong Kong, the Hang Seng was up 0.8 per cent to 24,700.30. Shares in China’s largest e-commerce company, Alibaba.com, underperformed – up 0.4 per cent – after it reported record third-quarter profits but warned of a coming slowdown.

South Korea‘s Kospi index was down 2.7 per cent to 1,914.73. Samsung Electronics fell 2.9 per cent and steelmaker Posco declined 4.1 per cent.

Reuters reported that a single trade by Deutsche Bank may have caused the index to fall, adding that another factor may have been the expiry of Kospi futures.

India‘s BSE Sensex also fell: down 1.4 per cent to 20,589.09. Reliance Industries lost 2 per cent, while Bharti Airtel fell a further 3.2 per cent after Wednesday’s disappointing profits.

Indices in Indonesia and Malaysia eased from their record highs. The Jakarta Composite fell 0.3 per cent to 3,744.62, although coal-miner Bumi Resources gained 5.3 per cent to a five-month high after announcing it will sell 4.3bn shares this month. Malaysia’s FTSE Bursa was down 0.9 per cent to 1,513.70.

In the Philippines, banks fell over 4 per cent, as the main index fell 1.3 per cent to 4,144.41. Thailand‘s SET index was up 1.2 per cent to 1,029.86. Vietnam‘s VN index closed down 1 per cent at 446.69.

In Taiwan, the Taiex slipped 0.2 per cent to 8,436.95.

On the currencies market, the Thai baht was the biggest mover against the dollar – down 0.3 per cent. It is now 0.7 per cent off a high set earlier this week. Other currencies moved less than 0.2 per cent against the greenback.