South Korea’s benchmark KOSPI index rose 1.1 percent to 1,867.22, to bring the index 1.5 percent higher during a week which saw the death of North Korea’s longtime dictator Kim Jong-Il. The KOSPI declined 3.4 percent on Dec. 19 after North Korea’s official news agency announced Kim’s death. However, the KOSPI quickly recovered lost ground, climbing 3.1 percent on Dec. 21 after better-than-expected US housing data improved the outlook for Korean exports. US November housing starts rose 9.3 percent to an annualized rate of 685,000. The death of Kim Jong-Il thus far has had little impact on the South Korean economy. The South Korean market has performed well after similar historic upheaval in North Korea. The KOSPI fell by 0.8 percent on July 11, 1994, after the death of Kim Il Sung, the founder of North Korea and Kim Jong-Il’s father. However the KOSPI advanced 18 percent over the subsequent four months after Kim Il Sung’s death. Analysts believe the transition of power to Kim Jong-Il’s son, Kim Jong-Un will be peaceful and orderly, though the true political situation in the rogue state remains unclear. The KOSPI has declined 9 percent this year.

China’s commercial banks expect the country’s government to enact looser monetary policy in the first three months of 2012, according to three quarterly surveys by the central bank. The expectations for a shift in monetary policy are based on moderating inflation expectations and deteriorating business sentiment in China. A survey of 20,000 households by the People’s Bank of China, published on Thursday, found that that inflation expectations are lower for the first quarter of 2012 compared to the fourth quarter of 2011. Only 36.8 percent of respondents expected consumer prices to rise in the first quarter, compared to 49.6 percent in the previous survey. Furthermore, 29.6 percent of respondents said that they could tolerate the current level of inflation, compared to 26.4 percent in the previous survey. A separate survey of 5,000 company executives in China showed diminishing business confidence for the fourth quarter. The survey found that 68.4 percent of respondents were confident in the business environment compared to 70.2 percent in the previous survey.

Hong Kong-based brokerage CLSA cut its forecast for Indian economic growth for the current fiscal year ending March to 6.7 percent, down from the previous forecast of 7.3 percent. The brokerage cited high interest rates, an uncertain global economy and political inertia for the new forecast. On Thursday India’s central bank said the country’s economy could fall short of the Reserve Bank of India’s full year growth target of 7.6 percent. The government this month reduced its forecast for economic growth to 7.25 percent to 7.75 percent, down from a previous estimate of 9 percent.