Asian Markets Dip Monday; China Up 1.4%

With the notable exception of China, Asian markets fell in Monday's session -- their first drop in four days. Some traders blamed the weakness on Friday's strong U.S. job numbers that decreased the likelihood the U.S. Federal Reserve will cut interest rates by 0.5% this week, a move many traders had been betting on. Futures contracts now indicate a 26% chance of a half-point cut, down from 36% a day earlier. China's Shanghai Composite Index jumped 1.4% after the government said Sunday it would lift its capital markets foreign investment cap to $30 billion from $10 billion, though it also tightened domestic monetary policy by raising the ratio of reserves banks must keep on hold to 14.5% (full story).

ASIA INDEXES

	CHANGE	CLOSE	LOSS/GAIN
NIKKEI 225	-0.2%	15,924	-32
HANG SENG	-1.2%	28,501	-341
SHANGHAI COMP.	+1.4%	5,162	+70
BSE SENSEX 30	-0.45%	19,876	-90

IN BRIEF...

China has agreed to raise the cap on foreign investment to $30 billion from $10 billion, and said it will raise the proportion of deposits banks must keep on reserve.

Japan's October machinery orders rose at twice the pace economists forecast, signaling companies will increase spending to meet Asian and European demand for chips, cars and electronics.

Asian stocks fell for the first time in four days after writedowns by UBS AG raised concern losses from U.S. subprime investments will widen.

The dollar dipped versus the yen but hovered near a one-month high on Monday, holding gains from last week after data showing steady U.S. job growth cooled expectations for a more aggressive interest rate cut by the Federal Reserve.

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