16-Dec-2008 10:30 AM

Air China and China Southern again hit by China Eastern rumours. Spicejet on new flightpath.

Asian markets rebounded on 15-Dec-08, led by Japanese stocks, as investors brushed aside a survey showing business confidence plunged, on hopes for a US interest-rate cut and after the Bush administration stated it would step in to prevent a failure of US car industry.

The Nikkei surged 428.79 points (+5.21%) to 8664.66, while Hong Kong's Hang Seng Index rose 288.56 (+1.96%) to 15046.95. The Australian share market also closed stronger, driven higher by resource stocks following commodity price rises over the weekend. The benchmark S&P/ASX200 index was up 81 points (+2.31%) to 3591.4.

US shares later fell, as the market sought clarity over US President Bush's bid to rescue US carmakers and awaited outcome of a Federal Reserve meeting expected to cut interest rates. The Dow Jones Industrial Average fell 65.15 points (-0.75%) to 8,564.53, the Nasdaq was down 32.38 points (-2.10%) to 1508.34 and the Standard & Poor's 500 fell 11.13 points (-1.27%) to 868.60.

European stock markets were gently down. London's FTSE lost -2.79 points (-0.07%) closing at 4277.56, the Paris the CAC 40 fell -27.94 (-0.87%) to 3185.66, while the Frankfurt Dax 30 lost 103.83 (-2.18%) closing at 4663.37.

Oil prices

Oil prices fell again on 15-Dec-08 as the market ignored a likely OPEC supply cut to refocus on demand. Light, sweet crude prices for January delivery decreased USD1.77 (-3.8%) closing at USD44.51 a barrel on the New York Mercantile Exchange.

Asia Pacific airline share prices

Once again rumours of a China Eastern-Shanghai Airlines merger - and the resulting expected improvement in their operational performance - has hit Air China (-8.7%) and China Southern's (-7.5%) share prices. Whether the expectations are well founded will remain to be seen. Despite the atmosphere, China Eastern (-2.8%) - with a questionable future, after all, still fell, but Shanghai Airlines (+3.4%) is obviously considered to be getting the better part of any bargain that emerges.

Meanwhile, as cross-straits direct services begin in earnest today, EVA Air (-4.3%) and China Airlines (-4.2%) shares each fell, with the prospect of greater competition and the erosion of their highly profitable Hong Kong services.

At the other end of Asia, Spicejet continued its resurgence, based on its brighter outlook as a revived LCC in a slowing Indian market. An airline to watch.

Asia Pacific selected airlines daily share price movements (% change): 15-Dec-08