Most Asian markets wrapped up the year higher Friday, as Japanese shares hit a new seven-month high and shares in China, Singapore, Australia and New Zealand set record closes.
Tokyo's benchmark Nikkei 225 stock index rose 1.02 points, or 0.01 percent, to finish a quiet half-day session at 17,225.83 points _ its highest close since May 9.
The Nikkei ended 6.9 percent higher than the last trading day last year. It was the fourth straight year of growth for the index amid encouraging signs of an economic recovery, but that growth was well below a 40 percent advance in 2005.
Friday's trading wrapped up a turbulent year for Japanese markets. A scandal involving Internet startup Livedoor Co. in January sparked a frenzied sell-off that shut down the Tokyo bourse, which could not handle the high volume.
The decision by Japan's central bank to raise interest rates in July for the first time in six years then stunted the market's recovery, analysts said.
Shin Yamaji, retail equipment manager at Mitsubishi UFJ Securities, said foreign investors bought stocks of Japanese manufacturers with advanced technologies, including steelmakers, helping the index bounce back toward the year's end.
Friday's rise was led by exporters such as Matsushita Electric Industrial Co., Toyota Motor Corp. and Nissan Motor Co., as the yen's recent weakness encouraged investors to buy autos and electronics. A weaker yen helps Japan's exporters by making their products cheaper overseas.
In Hong Kong, shares edged down from their record high Friday on profit-taking in Chinese banks, closing the year 34 percent higher than last year.
The blue-chip Hang Seng Index fell 31.03 points, or 0.2 percent, to 19,970.88. In 2006, the index has risen 5,094.00 points, after hitting an intraday record high of 20,038.00 on Thursday.
The market "is likely go even higher next year ... the China growth story and (possible) yuan appreciation are enough to support the market solidly," said Kitty Chan, a director at CASH Asset Management.
Part of the index increase was due to the inclusion of China-registered companies, such as China Construction Bank and Sinopec, in the Hang Seng Index since September.
Traders expect China-related stocks to continue leading the market higher next year, provided that liquidity stays in Hong Kong, China's economy continues its rapid expansion and hopes for a fresh round of yuan appreciation don't die down.
The biggest blue-chip gainer of this year was Hong Kong Exchange & Clearing, which rose 1.7 times on-year to close at HK$85.50. A slew of gigantic initial public offerings and heavy trading in cash and derivative markets have buoyed the stock.
The first runner-up is handset maker Foxconn, which has more than doubled to HK$25.60 from HK$12.65 at the end of last year.
Chinese banks and insurers have been outperforming the broader market, even though many of them have been listed in Hong Kong for less than a year. Investor interest has been immense amid hopes of a yuan appreciation, a lower corporate tax rate and strong economy-driven demand for financial services.
In currency trading, the U.S. dollar bought 118.92 yen on the Tokyo foreign exchange market late Friday, down slightly from 118.93 yen late Thursday in New York. The euro rose to US$1.3169 from US$1.3146 late Thursday.
BANGKOK: Thai shares ended virtually flat in thin trading. The Stock Exchange of Thailand's SET index closed down 0.52 point at 679.84.
KUALA LUMPUR: Malaysian shares rose, led by gains in plantation heavyweights amid expectations of higher commodity prices. The Kuala Lumpur Composite Index of 100 blue chips climbed 0.7 percent to 1,096.24 points.
MANILA: Philippine shares climbed to their highest level in nearly 10 years on the last trading day of the year, lifted by stocks with rosy growth prospects. The benchmark Philippine Stock Exchange Index advanced 39.16 points, or 1.3 percent, to 2,982.54 _ its best finish since April 7, 1997.
MUMBAI: Indian shares ended the year's last trading session lower, dragged down by index heavyweights Oil & Natural Gas Corp. and Reliance Industries. The benchmark 30-stock Sensitive Index, or Sensex, closed down 0.4 percent, or 59.43 points, at 13,786.91.
SHANGHAI: China's shares soared to a new record high for a fifth straight day, lifted by sharp rises in bank and airline stocks in the last trading session of 2006. The Shanghai Composite Index rose 4.2 percent to close at 2,675.47, more than double its level at the start of the year.
SINGAPORE: Singapore's benchmark Straits Times Index closed the year at a record high, and traders expect it to hit the 3,000 mark in January. The STI rose 22.34 points, or 0.8 percent, to 2,985.83 points, its second straight record high.
SYDNEY: Australian stocks hit a record high on the last trading day of the year as brokers squared positions with some month-end buying in blue chip stocks that underperformed the broader market during the year. The benchmark S&P/ASX 200 index rose 9.4 points, or 0.2 percent, to 5,669.9 points.
TAIPEI: Taiwanese shares ended 2006 by rising to a six-year high, boosted by record highs set in Hong Kong's index on Thursday. The Weighted Price Index of the Taiwan Stock Exchange gained 90.79 points, or 1.2 percent, to 7,823.72, its highest closing level since Aug. 28, 2000.
WELLINGTON: New Zealand's stocks hit a record level for the third day running to end a year in which the local bourse recorded a 20 percent rise in value. The benchmark NZX-50 was up 8 points, or 0.2 percent, at 4,055.47.
Markets in South Korea and Indonesia were closed Friday for a holiday.