Weekly Roundup: Asian Markets Fall Amid Rising China Inflation

Most of the Asian markets fell in the week as investor confidence was weighed down by the report that inflationary pressures continued to increase in China, lowering the prospects for further loosening of the monetary policy.

Hong Kong's Hang Seng Index declined 0.3 percent and closed at 23264.07. China’s Shanghai Composite fell 1.5 percent and closed at 2243 points.

China’s inflation rate accelerated faster than expected in December. The data from the National Bureau of Statistics released Friday showed that the consumer price index of China rose 2.5 percent in December compared with that in the same period in the previous year and from 2 percent in November, exceeding the analysts’ average forecast of 2.3 percent.

It was revealed Thursday that China’s trade surplus gained in December compared with that in the previous month. According to the data released Thursday by the National Bureau of Statistics, China’s trade surplus rose to $31.6 billion in December, compared with $19.6 billion in November and far above the analysts’ average forecast of $19.7 billion. China’s exports rose 14.1 percent in December after a 2.9 percent increase in November.

Japan's Nikkei 225 Stock Average gained 1.1 percent this week and closed at 10801.57. South Korea's Kospi Index was down 0.8 percent and closed at 1996.67.

In Japan, the government declared Friday the much needed stimulus package of 10.3 trillion yen ($116 billion), which is expected to boost the country’s economy and regain the economic growth momentum. The Japanese government also made the promise that it would continue with putting pressure of the Bank of Japan to achieve the target of 2 percent inflation this year.

South Korea’s unemployment rate in December remained unchanged from that in November but added a fewer jobs compared to those in the previous month, moderately raising the optimism that the economy of the country was on the path of recovery.

According to the data released Wednesday by the Korea National Statistical Office, the country’s unemployment rate, which measures the percentage of the total work force that is unemployed and actively seeking employment, rose 3 percent in December, at the same rate as in November. The economy added 277,000 jobs in December, down from 353,000 jobs in November.

India's BSE Sensex dropped 0.6 percent for the week and closed at 19663.64.

According to the data released Friday by the Ministry of Statistics and Program Implementation, India’s industrial output fell 0.1 percent in November compared to that in the same month the previous year, down from 8.3 percent recorded in October.

Also, according to the data released Friday by the Ministry of Statistics and Program Implementation, India’s trade deficit fell to $17.7 billion in December from $19.3 billion in November.

Meanwhile, Infosys Technologies Ltd (NYSE:INFY), India's second largest software services firm, reported Friday a net income after tax of $434 million for the quarter ended Dec. 31, 2012, up from $431 million in the previous quarter. Also Infosys raised its revenue outlook for the current quarter to 6.6 percent from 5 percent.

Major Losers: Shares of Hyosung Corp declined 11 percent. Shares of Bajaj Auto dropped 4 percent and those of China Resources Land fell 3.6 percent.