Stock markets in Asian region finished mostly in positive region on Wednesday 3February 2010, with the overnight strong close on Wall Street on encouraging economic dataand higher commodity prices prompting investors to go in for blue chip stocks. Though someof the markets in the region came off early highs, the mood remains cautiously optimistichelping the market to retain the gains.
On Wall Street, stocks closed significantly higher for the second consecutive day, helpedby promising housing data and better-than-expected earnings from companies like UPS, D.R.Horton and Emerson Electric. U.S. stocks had their best two-day performance in threemonths as the Dow Jones Industrial Average gained 111 points, or 1.1%, to 10,297. TheS&P 500 was ahead by 14 points, or 1.3%, at 1103 and the Nasdaq was up by 19 points,or 0.9%, at 2190.
In the commodity market, crude oil rose in New York for a third day as increases in Asiaequities renewed expectations of a recovery in the global economy, spurring demand forfuels.
Crude oil for March delivery rose as much 59 cents, or 0.8%, to $77.82 a barrel inelectronic trading on the New York Mercantile Exchange. It was at $77.71 at 4:20 p.m.Singapore time. The contract earlier fell as much as 45 cents to $76.78. Yesterday, itgained 3.8%, the most since 30 September 2009, to settle at $77.23.
Brent crude oil for March settlement rose as much as 65 cents, or 0.9%, to $76.71 a barrelon the London-based ICE Futures Europe exchange. The contract earlier fell as much as 43cents to $75.63. Yesterday, it rose 4%, the most since 16 November 2009, to settle at$76.06.
Gold gained for a third day as the dollar extended a decline, fueling investor appetitefor the metal as an alternative asset. Gold for immediate delivery added as much as 0.8%to $1,123.82 an ounce, the highest intraday level since 20 January 2010, before trading at$1,122.32 at 4:43 p.m. in Tokyo. Bullion for April delivery in New York gained 0.4% to$1,122.80 an ounce.
In the currency market, the US dollar continues to consolidate against major currencies asglobal stock’s recovery extends further.
The Japanese yen recouped its early Asian session loss against major counterparts onWednesday. Japan’s currency yen was quoted at 90.35 against the greenback.
The Hong Kong dollar was trading at HK$ 7.7653 against the dollar. Actually the Hong Kongdollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85to the U.S. dollar.
In Sydney trades, the Australian dollar battled to hold its ground amid uncertaintywhether the latest recovery in risk appetite could last and talk local interest rates areunlikely to rise as fast as earlier thought.
An overnight rally in growth-linked currencies ran out of fizz on renewed concerns aboutChina’s move to tighten bank lending. Two of China’s biggest banks have calledback loans in the second half of January to fall into line with the government's directiveto slow lending. Australia is China’s biggest trading partner and worries thatauthorities there were trying to slow the pace of growth has triggered concerns it couldlead to a slowdown in demand for Australian exports.
At the local close, the dollar was trading at $US0.8872, well above Tuesday's low of$US0.8780. It saw a huge sell-off on Tuesday after the Reserve Bank of Australia (RBA)stunned investors by leaving rates unchanged at 3.75%.
In Wellington trades, the New Zealand dollar drifted lower after firming and attention isnow turning to tomorrow’s employment report for the December quarter. The NZ dollarwas US 71.06 cents at 5 pm from US 71.26 cents at 8 am and US 70.58 cents at 5 pmyesterday.
The South Korean won closed at 1149 won against the U.S. dollar, up 10.90 won fromTuesday’s close of 1,159.9.
The Taiwan dollar continued strengthened against the greenback. The Taiwan dollar wastrading higher against the US dollar at NT$ 32, 0.0600 up from Tuesday’s close ofNT$32.0600.
In equities, Asian markets shot higher as resource and technology stocks climbed onbuoyant commodity prices and a strong close on Wall Street.
In Japan, the share market surged in volatile trading, thanks to softer yen and strongercommodities which boosted exporters and resource-linked shares. But overall gains werecapped by profit taking in banking shares and sharp losses in blue chips such as FastRetailing and Toyota Motor. Domestic cues are mixed, as investors are sensitive aboutcompanies’ third-quarter earnings. At the end of today’s trade, the Nikkei 225Stock Average index was at 10,404.33, rose 33.24 points or 0.32%, while the broader Topixof all First Section issues on the Tokyo Stock Exchange gained 2.86 points, or 0.31%, to915.68.
On the economic front, Markit Economics reported that the Japan Nomura services purchasingmanagers’ index stood at a seasonally adjusted 43.4 in January, up from 42.7 in theprevious month, confirming the contraction.
In Mainland China, the shares shot up on widespread bargain hunting thanks to strongercommodities prices and news of Central Huijin investment plans, which drove up energy andmaterials, and heavily battered stocks such as banks and properties.
At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on theShanghai Stock Exchange, spurted 69.12 points, or 2.36%, to 3,003.84, while the ShenzhenComponent Index on the smaller Shenzhen Stock Exchange rose 349.64 points, or 2.93%, to12,262.57. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, jumped 2.69%,to 3,230.72.
In Hong Kong, the key benchmark indices widened gains throughout the session to finishhigher, thanks to strong finish of Wall Street overnight, firm Asian stocks, andballooning commodities prices. The rally was also fueling by media reports thatChina’s sovereign wealth fund will increase holdings in the country’s threebiggest state-owned banks.
At the settlement, the Hang Seng Index spurted 449.90 points, or 2.22%, to 20,722.08,while the Hang Seng China Enterprise, which tracks the overall performance of 43 MainlandChinese state-owned enterprises on the Hong Kong Stock Exchange, increased 268.37 points,or 2.32%, to 11,838.72.
In Australia, the shares ended nearly higher with resource-linked shares led the advanceon higher commodity prices and as another good day on Wall Street overnight. TheRBA’s surprise decision to keep interest rates on holds boosted retailers. Therelease of positive economic data both locally and abroad has also strengthensinvestor’s optimism as they look to take advantage of the recent sell-off.
At the closing bell, the benchmark S&P/ASX200 index climbed up 42.60 points, or 0.93%,to 4,647.90, meanwhile the broader All Ordinaries added 44.40 points, or 0.96%, to4,673.20.
On the economic front, Australia saw a seasonally adjusted trade deficit of 2.25 billionAustralian dollars in December, the Australian Bureau of Statistics said on Wednesday.That was following the revised A$1.72 billion deficit in November. In all, the deficitwidened by A$524 million from the previous month. Exports rose 4% or A$675 million toA$19.77 billion in December, up from A$19.03 billion in the previous month. Importsclimbed A$1.198 billion or 6% to A$22.02 billion in December, up from A$20.73 billion amonth earlier.
In New Zealand, equities continued its downward movement with the benchmark index edgingdown by more than 12 points, registering the sixth consecutive session in the negativeterrain. At the closing today, the NZX 50 lost 0.39% or 12.25 points to 3135.11.Meanwhile, the NZX 15 declined by 0.43% or 24.35 points to close at 5647.94.
In South Korea, stocks closed higher as better-than-expected economic data in the U.S.lifted investor sentiment. The benchmark Korea Composite Stock Price Index (KOSPI) gained19.21 points to 1,615.02.
In Singapore, the share market surged, snapping losses of 1.3% in the past three days, ina wake of stronger Wall Street overnight and firmer commodity prices fueling optimism aglobal recovery can be sustained. Strong performances in Hong Kong and other major Asianmarkets helped domestic indexes regain some ground later. At the closing bell, the bluechip Straits Times Index was at 2,764.84, added 43.97 points or 1.62%.
In Taiwan, stock market recovered from its three month low as United MicroelectronicsCorporation led the rally after the firm said it will buy back 200 million of its sharesto distribute to employees. The benchmark Taiex share index snapped its losing streak byposting a recovery from its three month low, by finishing the day higher by 118.37 pointsor 1.59% at 7547.98.
In Philippines, growing optimism about the economic prospects assisted the Philippinesstocks to scale up nearly 1%. A rebound in exports and spending related to the local andnational polls in May are expected to push gross domestic product (GDP) growth past 2.6%in the first quarter of 2010. Moreover, investors took cues from the gains on Wall Streetovernight on the back of strong fourth quarter earnings reports and home sales data thatsuggested economic activity is picking up. At the closing bell, the benchmark index PSEiascended 0.72% or 20.63 points to 2,884.81, while the All Shares index went up 0.50% or9.17 points to 1,839.72.
In India, the key benchmark indices surged as strong response to NTPC’s follow-onpublic offer (FPO), robust services sector data for January 2010 and firm global stocksboosted investor sentiment. At the local close, the BSE 30-share Sensex was up 332.61points or 2.06% to 16496.05. The S&P CNX Nifty was up 101.75 points or 2.11% to4931.85.
Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly higher at 1267.15while stock markets in Indonesia’s Jakarta Composite index gained by 24.30 pointsending the day higher at 2604.55.
In other regional market, European shares edged up on Wednesday, ahead of a decision onGreece's stability program, with miners and banks offsetting earnings-related weaknessfrom Roche Holding and Electrolux. On the regional level, the German DAX index rose 0.3%or 15.66 points to 5,726, the French CAC-40 index rose 0.4% or 13.87 points to 3,826 andthe U.K. FTSE 100 index rose 0.3% or 15.79 points to 5,299.
