Window Dressing

KLCI ends down 0.4% at 1434.04 in thin volume, off intraday and record high of 1449.70, as pre-weekend profit-taking drags market off highs. Market breadth turned negative with decliners leading gainers 554 to 285. The pull-back not surprising as market had gained almost 5.5% over the week following listing of Sime Darby. Market tipped to trade in 1430-1450 band next week. All eyes will be on the Fed's decision on interest rates next week. Local government-led funds may also start window-dressing activities ahead of year-end book closure and this could keep the market buoyant.

Asian markets were mixed Friday as caution crept back into some bourses despite another strong showing on Wall Street on the U.S. government's plan for dealing with the country's credit crisis.

Benchmark indices in Hong Kong, Indonesia, Malaysia, South Korea and Thailand lost ground as investors took the view that an expected cut in Federal Reserve interest rates next week had already been factored into their markets.

Japan's benchmark Nikkei 225 average, though, hit a one-month high as Japanese investors were heartened by the renewed confidence in the United States, a key market for Japanese goods.

The Nikkei added 0.5% to close at 15,956.4 points, marking its highest finish since Nov. 7.

The Dow rose 1.3% Thursday on the view that companies hurt by the housing crisis will benefit from the U.S. government plan to help financially stretched homeowners.

Investors also widely expect the U.S. economy to get additional relief from a rate cut when Fed policymakers meet Tuesday.

"Japanese stocks have been left relatively undervalued. They should keep rallying back toward the end of the year," said Shigeharu Shiraishi, managing director of Societe Generale Asset Management.

The broader Topix index, which includes all shares on the exchange's first section, added 0.61% to finish at 1,561.8.

Meanwhile, Hong Kong's benchmark index tumbled 2.4% to 28,842.5 as investors sold property developers boosted recently by the expectations of a U.S. rate cut.

The benchmark measure had gained 8.6% over the last seven sessions as investors looked ahead to the Fed meeting next week, when the bank is widely expected to cut it key rate for the third time this year.

But, "unless we are more confident that the Fed will continue cutting interest rates, I don't see any new reasons for the index to be pushed up above 30,000," said Castor Pang, a strategist at Sun Hung Kai Research.

Property developers fell as investors took profit after their recent rally.

Sino Land fell 9.5%, New World Development dropped 7.3%, and Cheung Kong dropped 4.3%.

Bucking the downward trend, PetroChina, which will join the Hang Seng index on Monday, gained 1.8%. China Shenhua Energy, which also joins the blue chip ranks on Monday, rose 0.9%.

China Railway Group made a strong Hong Kong debut and finished 27% above its initial public offering price on expectations of strong demand for infrastructure in China.

In Tokyo currencies, the dollar was trading at Y111.26 yen at 0750 GMT Friday, down from Y111.40 late Thursday in New York. The euro fell to $1.4614 from $1.4633.

Thailand's main stock index fell 0.5% to 841.4 ahead of a long weekend. Thai financial markets will be closed Monday.

Indonesian shares fell as profit-taking reversed gains chalked up in the morning session. The benchmark stock measure fell 0.6% to 2,778.9.

Philippine shares climbed on hopes the central bank will cut interest rates next week. Gains were limited as some investors began pocketing gains from a seven-day rally. The Philippine Stock Exchange Index rose 0.3% to 3,745.4 in a volatile session.

South Korean shares retreated as investors grew cautious over recent sharp gains despite continuing upward trends in the U.S. and other Asian markets. The Korea Composite Stock Price Index, or Kospi, fell 1% to close at 1,934.3.

Chinese stocks rose as expectations of stronger demand boosted buying of steelmakers, though trading remained thin ahead of major initial public offerings. The benchmark Shanghai Composite Index gained 1.1% to finish at 5,091.8. The Shenzhen Composite Index rose 1.6% to 1,318.6.

Singapore shares rose, but most of their earlier gains were wiped out as investors remained cautious ahead of the release of U.S. November non-farm payroll data. The Straits Times Index finished 0.2% higher at 3558.0. It hit 3,621.8 during the session.

Australia's benchmark stock index hit a four-week high, buoyed by short-term optimism as traders await the U.S. non-farm payroll data and the expected rate cut from the U.S. Fed. The benchmark S&P/ASX 200 index gained 0.8% to close at 6,654.7.

Taiwan's stock index rose to a 3-week high on the overnight Wall Street rally. The Weighted Price Index of the Taiwan Stock Exchange rose 0.32% to 8,722.38, its highest close since Nov.16.

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