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Macarthur Coal Limited (MCC) said the Foreign Investment Review Board has no objections to Noble Group being issued shares in Macarthur as part of Macarthur’s takeover of Gloucester Coal Limited (GCL). The deal would see Macarthur acquire Noble Group’s 87.7% stake in Gloucester and 25.34% of the shares in Middlemount Coal Pty Ltd from Noble Group, to take Macarthur’s ownership to 100% of Middlemount.

Molopo Energy Limited (MPO) announced a $60 million equity raising to be completed by way of an accelerated renounceable entitlement offer and institutional share placement. The company said the proceeds from the raising would be used to accelerate exploration and development programmes, especially in Molopo's Canadian oil projects. Molopo said the capital raising would comprise of a $28.5 million 1 for 7 accelerated renounceable entitlement offer at an issue price of $1.03 per new share, and a $31.5 million institutional share placement, where the price would be determined via an institutional bookbuild.

Hemisphere Resources Limited (HEM) said it intends to spin‐off its Western Australian gold assets to allow it to focus on Iron Ore in the Pilbara and the Mid West as well as Nickel and Uranium in the Murchison and Eastern Goldfields. The company said the spin‐off would see the gold projects being placed into a wholly owned subsidiary, Aruma Resources Limited, which would apply for listing on the ASX. Hemisphere said it is intended to raise a minimum of $5 million in this process to enable a focused effort to be directed at the gold properties.

By Greg Peel

When a country calls in the International Monetary Fund to save it from financial ruin, which is reflected in a potential default on government borrowings, the first thing the IMF does is to require an immediate devaluation of currency. The resultant drop in purchasing power forces that country to immediately become more frugal.

Had Greece still been operating under its own currency of the drachma, then it is quite likely Greece would have called in the IMF in January rather than having to face stiff austerity measured forced by the European Union. However, because Greece is part of the eurozone it no longer has a unique currency but one shared by 15 other nations including Germany. There is thus no mechanism available for the IMF to force currency devaluation.

In the 1990s the "Little Tiger" economies of South East Asia were enjoying unprecedented economic growth as they emerged out of a peasant-style existence. Loathe to upset this wonderful growth, and inexperienced as to its potential consequences, government and monetary authorities did nothing to control the runaway train. The result was rampant inflation and soaring currency values, leading to a bursting of the bubble in 1997 and the resultant Asian Currency Crisis. The Little Tigers have been struggling to recover ever since.

Watching across the fence was China, which despite its size was still further back down the peasant existence graph and still more resolutely communist than capitalist. But China had plans to become a Big Tiger. One reason China has succeeded so spectacularly in such a short space of time is it elected to peg its currency to the world's reserve currency – the US dollar – so to avoid another Asian currency disaster.

The pegged currency meant America could shift its manufacturing base to China to exploit very low wages while the manufactured goods coming back were too temptingly cheap for Americans not to run up mountains of debt in buying them. The Chinese economy ran away faster than even China had expected, forcing a gradual shifting of the currency peg to a higher renminbi valuation. But China didn't want to risk derailing the economy by revaluing too fast, and hence China achieved 13% GDP growth in the mid-noughties when 8% was the target.

China got a shock, and was angry, when the GFC hit. But really Chinese monetary policy was fundamentally a contributing factor.

China's now back with some harsh lessons learned. Fourth quarter GDP growth hit 10.7% and the latest January-February economic data released this week have economists now extrapolating 11%. China is again explicitly targeting 8% growth, so it has some monetary tightening to do, beyond small steps already taken in 2010. China revalued the renminbi slowly by a total of 21% between 2005 and 2008 before the GFC hit in earnest, but in early 2008 CPI inflation had hit double digits. Clearly the process was too slow, and in looking for anyone else to blame, America screamed blue murder over China's artificially "manipulated" currency.

China's CPI inflation is nowhere near double digits this time, but this time China wants to fall into line with decade-long Western central bank policy by restricting inflation to 3%. Having returned from the negative in January, February CPI growth hit 2.7%. Wholesale inflation growth hit 5.4%. It's only a matter of time.

The People's Bank of China dictates not just the lending rate, as the RBA does for example, but also the deposit rate. The deposit rate is currently set at 2.25% which implies a negative real rate of minus 0.45% after inflation of 2.7%. It needs to rise, and the lending rate needs to rise in order to slow 11% growth down to 8%. In the meantime, speculative foreign capital (known as "hot money") is flowing into China in anticipation of higher rates and a revalued currency – an unavoidable by-product of capitalism which seriously angers Beijing. The hot money encourages further economic growth and thus forces the issue on revaluation.

Domestically, Beijing is very concerned about a building property bubble which is driven by stimulus money being directed toward speculation rather than expanded housing and infrastructure construction as intended. China's property prices are now 30% higher than a year ago.

This is slightly misleading, given one year ago the Chinese property market suffered a bit of a crash post-GFC, and in fact the January price increase measured a more sedate 1.7% following some minor tightening measures. Thus Beijing does not wish to withdraw stimulus, and risk blowing the success the package has achieved to date, but it will affect a redirection of funds by offering more rural and regional support while at the same time raising bank lending rates to slow down the runaway cities.

To that end, economist consensus has the first rate rise occurring next month or in May or both. Thereafter, consensus has a 5% revaluation of the renminbi by at least year-end but probably sooner.

The effect of a stronger renminbi is to first render Chinese exports more expensive in the US and elsewhere. Rampant investment and strong competition in China has meant many businesses run on the barest of margins. A stronger renminbi means raw materials become effectively cheaper, but demand destruction could well wipe out those slim margins. It has been noted that while the average steel-producer's margin over time on HRC steel is US$50/t, currently it is only US$10/t on an HRC price of US$630/t.

However, Beijing will not mind weaker operations going to the wall, leaving a more robust industry base of the stronger operations. This is simply capitalism at work. What's more, it is noted that after 21% of currency revaluation from 2005 to the GFC, China's GDP growth had only receded slightly from its peak, not dramatically. In other words, the economy can handle it.

And last month's data suggest strong export growth has all but returned China's exports to pre-GFC levels.

Which leads ANZ's economists to suggest that a 5% revaluation may only be the low end of the range of possibilities. ANZ points out that incremental revaluation will only attract more speculative hot money, and that the only way to avoid this is to nip the situation in the bud. Bang. One full revaluation move. But ANZ also suggests anything below 5% will be too little, while anything over 10% would destroy too many export businesses in one hit. In other words, ANZ is predicting something in between, rather than the simple 5% consensus expectation, but with an accompanying widening of the trading "band". (While the renminbi is "pegged" it is pegged within a band of values to allow a little bit of easier transaction fluctuation). A widened band could act as a precursor to an eventual free float, suggests ANZ.

And ANZ also thinks it will happen fast – faster than most "by year-end" forecasts. One reason is the US Treasury's pending April 15 decision whether or not to officially brand China a "currency manipulator". So branded, the US government is given the power to impose punitive tariffs on Chinese exports.

Among economists, ANZ is at the "hawkish" end of the forecasting scale. Macquarie, on the other hand, is more "dovish".

While others are focusing on industrial production numbers to extrapolate GDP, Macquarie notes that history suggests as the Chinese property market goes, so goes the Chinese economy. Property is a hefty proportion of GDP and provides a large slice of taxes to be returned into infrastructure stimulus. Given the rate of property price growth slowed in January following tightening measures, Macquarie argues the risk of "a lot of aggressive policy moves still to come" is reduced.

Never mind that Premier Wen described the Chinese property market last Friday as a "wild horse" in some cities.

The key, says Macquarie, is to watch fixed asset investment (FAI) data. Writing earlier in the week, Macquarie suggested a level of FAI around 25% would suggest investment is under control but a number around 30% would suggest overheating. Yesterday that number came in at 26.6%.

So Macquarie would likely be sticking to its guns, and not expecting swift and aggressive interest rate rises and revaluations. ANZ thinks differently. They say that if you lined all the economists in the world end to end they still wouldn't reach a conclusion.

What would a revaluation of the renminbi mean for Australia? Well for one thing, China could afford to buy more iron ore at the same US dollar price, which should be good news. But we will have to pay more for Chinese fridges and televisions. It's all a bit academic anyway, given our own currency floats freely. With rates on the rise in Australia while the US sits on hold, the Aussie is pushing up again. This undermines iron ore profits locally but makes imports cheaper.

Were the Chinese economy to slow to 8% then one must expect a similar dampening effect on Australia's GDP growth, which in turn takes the pressure off rates and the Aussie. But at least China won't be heading towards a Japanese-style bust, which should be good news for everyone in the longer term, even if stock market investors are stymied by China pulling on the reins in the short term.

The Australian share market entered the new calendar year with gusto and with positive momentum, allowing the S&P/ASX200 index to rise to 4950.70 by January 11 (intra-day high 4955.10), after which a decline followed and pulled the index back to 4505.10 by February 9 (intra-day low 4464.90).

If we concentrate on the intra-day peak and trough, instead of the closing index levels, the difference between the January high and the subsequent February low is 9.9%.

One month later, and the index has just managed to rise above the 4800 level again, still 3% short of the previous peak, but well above last month's low.

The question most investors will be asking is: what comes next? The expert commentariat remains heavily divided between those who maintain the index is on its way to test the 4000 level, while others are talking about 5500, and possibly higher.

These differences in market views have once again been highlighted by market strategists at leading stockbrokers in Australia updating their views and projections post the February reporting season.

On one hand we find the likes of Tony Brennan at Deutsche Bank, who believes the ASX200 is on its way to reach 6000 by year-end. On the other hand we find Tim Rocks at Bank of America Merrill Lynch who maintains the index won't be further than 4500 by late December.

In between are the likes of Greg Goodsell at RBS Australia (sees index at 5300 by December), Atul Lele at Credit Suisse (5100) and Paul Brunker at JP Morgan (5000). On Monday, Macquarie strategist Tanya Branwhite and her team updated their views, and while not as bullish as Deutsche Bank, Macquarie's projections still sit toward the top end of the market.

By late February next year, predict Branwhite and co, the ASX200 should be at 5548, representing a total return for investors in excess of 22% of which 4.5% will come in the form of dividends.

What all these index projections have in common though (okay, maybe with the exception of Deutsche Bank) is they suggest the ASX200 may not break out of its current trading range until the second half of this year, at the earliest. From a valuation point of view, this is but a plausible scenario.

To put it very simply: the closer the S&P/ASX200 moves toward the previous peak at 4955.10, the higher the inclination will be for investors to start selling their shares, as many equity valuations will start looking stretched. On the other hand, the closer the index falls to the previous trough below 4500, the more value oriented investors will look into buying again, as they will see true bargain opportunities.

As one stockbroker put it to me two weeks ago: it comes to a point where you feel it is near impossible to not make money if you buy at these levels.

Think Telstra ((TLS)) below $3, for instance.

What are the chances the index will remain in between 4464.90 and 4955.10? And what are the chances the index will ultimately break out of this range; either to the downside or to the upside?

The answer to these questions remains closely tied to what happens to earnings expectations for fiscal 2011. Last year, investors bought shares in anticipation of a normalisation in share market values. This is why those stocks that had fallen the most during the bear market of 2008 have outperformed the more solid and stable companies in the share market. This year, however, investors are looking for value through gains in profits on the back of the global economic recovery.

Growing profits will not only justify last year's jump in Price-Earnings (PE) ratios, it will also create additional value as today's lofty share prices will look relatively cheap on FY11 multiples. Of course, this argument carries more weight when the index is near 4500 than when it is above 4900.

Let's put some numbers behind the theory. The ASX200 above 4800 translates into 16.3 times average earnings per share for fiscal 2010 (consensus forecasts as measured and calculated by FNArena). That's well above the decade average of 14.5, and reason why market bears are constantly complaining about how "expensive" the share market is.

On FY11 projections, however, the Australian share market is still only trading at 13.6 times consensus expectations, and that still leaves further room for appreciation.

Add an extra 100 points to the index and the FY11 market multiple rises to 13.9x, still below the long-term market average, but getting closer and don't forget: FY11 doesn't commence until July this year (though that's drawing closer too).

On current consensus projections, the ASX200 could well rise to around 5117 before we should start using the label "fully valued" on FY11 metrics. But then again, it is a near certainty that earnings forecasts for many cyclical companies will rise further in the weeks and months ahead. Think coal and iron ore companies, for instance.

Many an expert with a longer term horizon will also argue that Australian banks are still available at relatively cheap valuations (and I can only agree).

Here are a few examples of valuations for large cap stocks (they represent the most index weight) on FY11 metrics:

- Rio Tinto ((RIO)) is trading on 10.4x FY11 consensus EPS
- ANZ Bank ((ANZ)) is on 11x FY11 consensus projections
- National Australia Bank ((NAB)) is trading on consensus FY11 PE of 9.6
- Telstra ((TLS)) is valued less than 9 times FY11 consensus EPS
- Qantas ((QAN)) is on a FY11 consensus PE of 11.17
- BHP Billiton ((BHP)) is on 11.16
- Harvey Norman ((HVN)) is on 12.75

As one can see from this short list, many of the index heavyweights are still valued well below the market average for FY11. This supports the view that large caps are poised to outperform small caps in general terms in the year ahead.

This suggests the index can rise further on the back of these large caps stocks closing the valuation gap with their smaller peers, not to mention the potential for further increases to earnings projections for FY11 and beyond. Some resources analysts, for instance, have again started talking about "peak margins" for BHP and Rio Tinto, most probably in FY12.

The problem with all of the above, however, is there is still downside to market estimates and valuations. China's growth target of 8%, for example, looks rather subdued when one considers it was growing at double digits in Q4. And economies worldwide are now slowing down, coming from a strong, stimulus-supported finish to 2009. The latter hasn't received much attention in media and research reports just yet, but I will be digging deeper into this matter later this week (subscribers: stay tuned).

On pure valuation metrics, however, I'd be surprised if the index would fall much below the 4500-level, unless, of course, the current positively-biased economic environment not only weakens noticeably, but reverses into a negative trend instead. This continues to be a real and present danger, even though I am inclined to hold a longer term positive view.

FNArena calculates consensus sentiment, price targets and earnings forecasts on a daily basis for more than 400 Australian listed companies. Subscribers can access these data, via tools and applications such as Stock Analysis and the R-Factor, every day on the FNArena website.

Santos Limited (STO) and Oil Search Limited (OSH) said that the $15 billion PNG LNG project was moving to full project execution stage, following the completion of financing arrangements and LNG buyers. The announcement follows up a press release from project lead Exxon Mobil on Saturday.

The project is expected to take around four years to build, with the first gas being pumped in 2014.

Over the 30-year life of the project PNG LNG was expected to produce over 9 trillion cubic feet of gas.

Exxon Mobil said the the project would supply four major LNG customers in the Asia region through long-term sales, including CPC Corporation in Taiwan and Japanese Osaka Gas Company. The other cornerstone customers are the Tokyo Electric Power Company and Unipec Asia Company Limited, a subsidiary of Sinopec.

Santos CEO, David Knox said completion of financial close leading to full project execution at PNG LNG was a significant step forward in the company’s LNG growth strategy.

“PNG LNG will provide Santos with long-term production and cash flows – our share of project production is expected to be approximately 9 million barrels of oil equivalent per annum at plateau including LNG and associated liquids,” Mr Knox said.

It was a sentiment echoed by Peter Botten, Oil Search’s managing director.

“Finalising all sales and purchase agreements with LNG buyers and completing the financing arrangements with lenders are major milestones for the project,” Mr Botten said.

”At first drawdown, Oil Search will also receive approximately US$300 million from the lenders, to reimburse 70% of eligible Project costs already incurred by the company,” Mr Botten concluded.

At the close Friday, Oil Search and Santos shares were trading at $5.66 and $14.06 respectively.

JPMorgan has revised its iron ore forecasts, now flagging frontloaded price gains. On the back of these adjustments, the broker has neutralised its view of FMG (NEUTRAL, price target $4.01).

JPMorgan had previously expected the iron ore market to tighten in 2011 and 2012. However, the broker now expects benchmark forecasts to rise by 65%, 10% and 0% in 2010, 2011 and 2012 from 20%, 30% and 10% previously.

The broker said its near-term bullish view reflated improving fundamentals, with reports suggesting Brazil’s Vale has requested a 90% increase to Japanese steel makers for a fixed annual price.

The fundamental drivers include move from annual benchmark towards market based pricing mechanisms, stronger than expected demand in China, an increased contribution to demand from the rest of the world and continued tightness in supply.

JPMogran said the changes to its price assumptions benefited FMG and RIO (OVERWEIGHT, price target $88.11), as well as BHP (NEUTRAL, price target $45.07).

Transfield Services Limited (TSE) announced that its partnership with Dexter Construction Co. Limited has been selected as the preferred proponent of a 30-year operations, maintenance and rehabilitation project by the New Brunswick Highway Corporation. The company said the Route 1 Gateway Project is a Public Private Partnership, which includes the construction of 55 kilometres of a new four-lane highway and upgrades to existing sections of Route 1. Transfield said the contract is expected to be finalised in the next four weeks.

Transfield Services Limited (TSE) announced that its partnership with Dexter Construction Co. Limited has been selected as the preferred proponent of a 30-year operations, maintenance and rehabilitation project by the New Brunswick Highway Corporation. The company said the Route 1 Gateway Project is a Public Private Partnership, which includes the construction of 55 kilometres of a new four-lane highway and upgrades to existing sections of Route 1. Transfield said the contract is expected to be finalised in the next four weeks.

Sunland Group Limited (SDG) shares were over 5% higher early after the property group said it was upgrading its guidance from around $15 million, to between $17 million and $18 million. The upgrade was a result of settlements for the house and land segment beginning earlier than anticipated and therefore being included in this year’s results.

Perpetual Limited (PPT) said its funds under management as at 28 February 2010 were $28.4 billion. The company said funds under management as at 31 January 2010 were $28.2 billion.

US stocks continued to trade in a narrow band Friday as investors digested conflicting economic data. Out of the US, retail sales figures were stronger than expected, however another report from the University of Michigan showed consumer confidence falling.

The S&P is now sitting around 17-month highs.

The Dow Jones gained 12.85 points, or 0.12% to 10,624.69. The S&P 500 Index shed 0.25 points, or 0.02%, to 1,149.99. The NASDAQ dipped 0.80 point, or 0.03%, to close at 2,367.66.

Among the banks Citigroup was hit by profit taking after posting its best week since August. Its shares fell 5%, however were still up over 13% for the week.

Bank of America and Wells Fargo lost 1.6% and 0.4%. Goldman Sachs added 0.8%.

In the tech sector stocks were mixed. Software giant Microsoft added 0.2%, while Google dipped 0.3%.

Apple was 0.5% stronger.

Retail sales rose 0.3% in February, defying expectations of a fall. Not including the auto sector, sales jumped 0.8%.

Macy’s, Saks and Sears jumped 3.3%, 2.6% and 1.7% respectively.

Wal-Mart dipped 0.1%.

Ford climbed 3.3% as rival Toyota continues to be mired in controversy over its faulty brakes and accelerator.

The major mover on the Dow was Caterpillar, which jumped 2.5% after saying it could triple production of some heavy equipment.

NYMEX light crude oil for April delivery fell US87c to settle at US$81.24 a barrel.

Exxon Mobil shed 0.6% and Chevron slid 0.4%. 

COMEX gold for April delivery fell US$6 to US$1,102.20 per ounce.

European Markets

European markets mostly rose Friday as concerns over Greece’s debt situation continue to subside. Banks led the markets higher, while the normally dependable healthcare sector lost ground. 

The UK benchmark FTSE 100 rose 8.39, or 0.15% to 5,625.65. The French CAC40 weakened 1.55, or 0.04% to 3,927.40, while the German DAX was up 16.48, or 0.28% to 5,945.11.

UK bank Barclays rose 2.6%, while RBS surged 5%. Lloyds was 3.4% stronger.

In Germany, Deutsche Bank gained 1.3%.

Volkswagen shares spiked 1.9% after saying it was still looking into funding to make a bid for Porsche.

Among the miners, BHP Billiton dipped 0.1%, while rival Rio Tinto added 0.2%.

Anglo American put on 1.1% as most base metal prices rose in London trading.

Swiss pharmaceutical Roche fell 3% after one of its most profitable drugs failed in prostate cancer checks.

Astrazeneca and GlaxoSmithKline retreated 0.4% and 0.6% respectively.

Japanese Markets 

Japan’s Nikkei closed at a seven-week high Friday and added the most points to the index in a single week since early December. Exporters rallied on expectations the yen would weaken due to speculation the Bank of Japan may ease monetary policy.  

The Nikkei 225 advanced 86.31, or 0.81% to 10,751.26. 

Shin-Etsu Chemical, Takeda Pharmaceutical and Mitsubishi Chemical Holdings gained between 1.5% and 2.2%. The latter raised its earnings forecast. 

Health stocks were boosted by the expectation the US health-care reform would not pass. 

Electronics companies Canon and Panasonic both edged 0.2% higher, while Sony dropped 1.7%.  

Automaker Nissan climbed 2.4%. 

Mitsubishi UFJ Financial, Sumitomo Mitsui Financial and Mizuho Financial added between 1.1% and 1.3%.

Hong Kong Markets

The Hang Seng drifted marginally lower Friday after finishing higher every other session of the week. Property developers weighed despite predictions it would be a strong year for that sector. 

The Hang Seng shed 18.46, or 0.09% to 21,209.74.

Bank of China and heavyweight lender ICBC both climbed 0.3%. HSBC was 1.5% weaker.

Elsewhere, Victor Lui, executive director of developer Sun Hung Kai, said that it would be ‘another good year’ for the sector. Its shares were 1.3% stronger.

Guangzhou R&F Properties slid 2.6%, while state-controlled China Overseas Land & Investment retreated 1.4%.

Clothing heavyweights Esprit and Li & Fung were up 1.8% and 1.7% respectively.

It was also a good for investors in the auto rivals, BYD and Geely, whose shares rose 2.3% and 2.5% respectively.

US stocks continued to trade in a narrow band Friday as investors digested conflicting economic data. Out of the US, retail sales figures were stronger than expected, however another report from the University of Michigan showed consumer confidence falling.

The S&P is now sitting around 17-month highs.

The Dow Jones gained 12.85 points, or 0.12% to 10,624.69. The S&P 500 Index shed 0.25 points, or 0.02%, to 1,149.99. The NASDAQ dipped 0.80 point, or 0.03%, to close at 2,367.66.

Among the banks Citigroup was hit by profit taking after posting its best week since August. Its shares fell 5%, however were still up over 13% for the week.

Bank of America and Wells Fargo lost 1.6% and 0.4%. Goldman Sachs added 0.8%.

In the tech sector stocks were mixed. Software giant Microsoft added 0.2%, while Google dipped 0.3%.

Apple was 0.5% stronger.

Retail sales rose 0.3% in February, defying expectations of a fall. Not including the auto sector, sales jumped 0.8%.

Macy’s, Saks and Sears jumped 3.3%, 2.6% and 1.7% respectively.

Wal-Mart dipped 0.1%.

Ford climbed 3.3% as rival Toyota continues to be mired in controversy over its faulty brakes and accelerator.

The major mover on the Dow was Caterpillar, which jumped 2.5% after saying it could triple production of some heavy equipment.

NYMEX light crude oil for April delivery fell US87c to settle at US$81.24 a barrel.

Exxon Mobil shed 0.6% and Chevron slid 0.4%. 

COMEX gold for April delivery fell US$6 to US$1,102.20 per ounce.

European Markets

European markets mostly rose Friday as concerns over Greece’s debt situation continue to subside. Banks led the markets higher, while the normally dependable healthcare sector lost ground. 

The UK benchmark FTSE 100 rose 8.39, or 0.15% to 5,625.65. The French CAC40 weakened 1.55, or 0.04% to 3,927.40, while the German DAX was up 16.48, or 0.28% to 5,945.11.

UK bank Barclays rose 2.6%, while RBS surged 5%. Lloyds was 3.4% stronger.

In Germany, Deutsche Bank gained 1.3%.

Volkswagen shares spiked 1.9% after saying it was still looking into funding to make a bid for Porsche.

Among the miners, BHP Billiton dipped 0.1%, while rival Rio Tinto added 0.2%.

Anglo American put on 1.1% as most base metal prices rose in London trading.

Swiss pharmaceutical Roche fell 3% after one of its most profitable drugs failed in prostate cancer checks.

Astrazeneca and GlaxoSmithKline retreated 0.4% and 0.6% respectively.

Japanese Markets 

Japan’s Nikkei closed at a seven-week high Friday and added the most points to the index in a single week since early December. Exporters rallied on expectations the yen would weaken due to speculation the Bank of Japan may ease monetary policy.  

The Nikkei 225 advanced 86.31, or 0.81% to 10,751.26. 

Shin-Etsu Chemical, Takeda Pharmaceutical and Mitsubishi Chemical Holdings gained between 1.5% and 2.2%. The latter raised its earnings forecast. 

Health stocks were boosted by the expectation the US health-care reform would not pass. 

Electronics companies Canon and Panasonic both edged 0.2% higher, while Sony dropped 1.7%.  

Automaker Nissan climbed 2.4%. 

Mitsubishi UFJ Financial, Sumitomo Mitsui Financial and Mizuho Financial added between 1.1% and 1.3%.

Hong Kong Markets

The Hang Seng drifted marginally lower Friday after finishing higher every other session of the week. Property developers weighed despite predictions it would be a strong year for that sector. 

The Hang Seng shed 18.46, or 0.09% to 21,209.74.

Bank of China and heavyweight lender ICBC both climbed 0.3%. HSBC was 1.5% weaker.

Elsewhere, Victor Lui, executive director of developer Sun Hung Kai, said that it would be ‘another good year’ for the sector. Its shares were 1.3% stronger.

Guangzhou R&F Properties slid 2.6%, while state-controlled China Overseas Land & Investment retreated 1.4%.

Clothing heavyweights Esprit and Li & Fung were up 1.8% and 1.7% respectively.

It was also a good for investors in the auto rivals, BYD and Geely, whose shares rose 2.3% and 2.5% respectively.