Asian markets ends in positive territory

Profit taking by investors trimmed the gains in Seoul, Shanghai while Sensex, Sydney manage to hold gains

Stock market in Asian region closed mostly higher Friday 17 April 2009; taking cues from Wall Street, where the major indices ended in positive territory on increasing confidence that the downturn in the economy has slowed down and the economy can begin to recover sooner-than-expected. Profit taking by investors trimmed the gains with the markets in Australia and Hong Kong ending nearly flat, while the South Korean market ended in negative territory. The underlying trend seems to be cautiously optimistic among investors despite the downward risk for the economies remaining relatively higher.

On Wall Street, stock markets ended with gains. Despite a slow, choppy start, stocks climbed in afternoon trading and finished with healthy gains. The jobless claims data checked in better than expected and this gave stocks some good reason to cheer about. But the economic report in the housing sector front, disappointed again. The Nasdaq outperformed the other indices as shares of large-cap tech stocks rebounded from their losses in the prior session.

After starting the day 6 points up earlier during the day, The Dow Jones Industrial Average ended higher by 95 points at 8,125. The Nasdaq Composite Index, ended higher by 44 point at 1,670. S&P 500 ended higher by 13.5 points at 865.

In the commodity market, crude oil fell, poised for the biggest weekly decline since February, amid forecasts the recession will curb demand at a time when U.S. inventories are already at their highest in almost 19 years.

U.S. crude-oil inventories rose 5.67 million barrels to 366.7 million last week, the highest since September 1990, the Energy Department said 15 April 2009. The International Energy Agency reported 10 April 2009 that worldwide consumption would shrink by 2.8% in 2009 as the global economy contracts.

Crude oil for May delivery fell as much as 48 cents, or 1%, to $49.50 a barrel, and traded at $49.87 at 11:09 a.m. London time on the New York Mercantile Exchange. Oil has dropped 4.9% this week, set for its sharpest decline since the week ended 13 February 2009.

Brent crude oil for June settlement was at $52.84 a barrel, down 22 cents, at 11:28 a.m. London time on London’s ICE Futures Europe exchange.

Gold headed for its fourth weekly decline, the longest losing streak since August, as a global stock rally eroded demand for the metal as a store of value. Bullion for immediate delivery fell as much as 0.4% to $872.63 an ounce. It traded at $872.30 at 11:09 a.m. in London, down 0.8% for the week.

In the currency market, the Japanese yen weakened against its major counterparts on Friday. The Japanese currency quoted at 99.50 against the US dollar.

The Hong Kong dollar was trading at HK$ 7.7502 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In Sydney trades, the Australian dollar closed weaker on Friday as the market drifted amid a lack of local and global economic data. At its closing, the Australian dollar was trading at 72.05 US cents, down from Thursday's close of 72.35 cents.

In Wellington trades, the New Zealand dollar slipped to a fortnight-low against the greenback as risk averse investors sold off high-yielding currencies. The kiwi dropped to around US56.80 cents during a bumpy night from US57.55 cents yesterday. By today morning it had edged up to US57.11 cents.

The South Koran held steady at 1,332.00 won to the dollar as a morning-session gain was offset by a fall in afternoon trading.

The Taiwan dollar weakened slightly further against the US dollar as it was trading at NT$ 33.816, down by NT$ 0.116 from Thursday’s close of NT$33.800.

Coming back in equities, in Japan, the stock market finished the session higher, touched a three-month high buoyed by banks and financials and property developers on a positive lead from Wall Street on increasing optimism about a recovery in the global economy. The electronics makers were the biggest contributors to the Topix’s advance.

The Nikkei 225 Stock Average index rose 154.32 points, or 1.7%, to 8,907.58, while the broader Topix was 18.5 points, or 1.6%, higher to 846.

On the economic front, the Ministry of Economy, Trade and Industry said service sector output in Japan fell a seasonally adjusted 0.8% on month in February following the 0.4% gain in January. The decline was led by a 7.3% monthly fall in the learning support sector, which includes supplementary tutorial schools.

In Mainland China, the stock index finished session lower, extending losses for second day in row after Beijing reported a contraction in economic activity during first quarter of 2009. The declines were further fuelling by government warnings that financial institutions should guard against risky loans amid a flood of a new lending as Beijing rolls out stimulus measures.

Investors sentiments turns fragile after media reported that regulators were taking a tougher stance on monitoring the use of short-term loans, after the Shanghai Securities News on Friday said about one-fifth of new first-quarter lending in the form of short-term discounted bills did not flow into the real economy, signifying that about 300 billion Yuan in loans had been channeled to stocks and other assests or used for arbitrage business.

The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, fell 1.2%, or 30.19 points to 2,503.93. The Shenzhen Component Index was down 1.35%, or 131.29 points to 9,580.06.

On the economic front, the World Bank approved a $300 million loan to China for a railroad project being funded mostly by the Chinese government. The National Bureau of Statistics said Thursday China’s gross domestic product expanded 6.1% in the first quarter of 2009, following the 6.8% gain in the previous quarter. The Consumer prices in China eased 1.2% on year in March. For the first quarter of 2009, inflation was down 0.6% on year. Producer prices fell an annual 4.6% in the first quarter. The Industrial production was up 5.1% on year.

In Hong Kong, the stock market erased most of morning gains to finish the session somewhat higher, as bleak economic data from Shanghai dented optimism about an imminent global recovery. Shares of financials and china-related stocks turns lower after Beijing warnings that financial institutions should guard against risky loans amid a flood of a new lending as Beijing rolls out stimulus measures.

The Hang Seng Index surged 18.28 points, or 0.12%, to 15,601.27, while the Hang Seng China Enterprise Index, which tracks H shares of Chinese companies, dropped 89.05 points, or 0.97% to 9,052.18.

In Australia, the stock pared back morning gains to finish the session flat, as investors locked in profits ahead of the weekend. Gains in financials and the property sector were offset by losses in telecom, energy, and materials. Financials erased some of the morning gains buoyed on increasing optimism about a recovery in the global economy on profit taking. Property trusts bloated up on expectation moderating recession in the United States would boost credit flows. Miners, materials, and energy stocks tumbled on weaker commodity prices.

The benchmark S&P/ASX200 rose 1 point, or 0.03%, to 3,776.7, while the broader All Ordinaries added 2.50 points, or 0.07%, to 3,728.10.

On the economic front, The Australian Bureau of Statistics reported Friday that import and export prices for Australia both decreased in the quarter-ended March 2009. Import Price Index decreased 2.8%, driven by lower prices for petroleum and related products as well as fertilizers. Export Price Index fell 4.6% due to lower prices for metal ferrous ores and metal scrap, non-ferrous metals as well as petroleum and related materials. For the full year to the March 2009 quarter, the Import Price Index was up 14.6%, while the Export Price Index was up 42.8%.

In New Zealand, stock markets consolidated gains to end the week in the positive region. The benchmark index surged by almost 2% with gains in most of the stocks. The share market ended in the green patch for the fifth time in a row. At the closing bell, the benchmark NZX50 rose by 1.81% or 48.13 points to close at 2711.26. The NZX 15 advanced 1.83% or 90.49 points to close at 5028.86.

On the economic front, New Zealand’s annual inflation rate slipped to 3% in the March quarter as per the figures published by Statistics New Zealand today. The dip confirms the decline in inflation that gives the central bank ample space to go ahead with a rate cut. The Reserve Bank has progressively lowered the OCR, from 8.25% last July, to 3% now in order to support New Zealand’s economic condition that has witnessed the longest contraction in more than 30 years.

New Zealand’s consumer price index (CPI) increased 0.3% in the March 2009 quarter, the statistical department said today. For just the three months to March, the Consumers Price Index rose 0.3%, following a decrease of 0.5% in the December quarter. Higher prices for food and cigarettes were largely offset by lower prices for transport.

In South Korea, stock markets closed little lower as institutions cashed in profits from recent advances. The benchmark Korea Composite Stock Price Index (KOSPI) fell 7.72 points or 0.58% to 1,329.00.

On the economic front, sales at South Korea's major discount outlets and department stores improved in March compared to the previous month thanks to greater demand for groceries and luxury goods. According to the report released by the Ministry of Knowledge Economy the total sales at the three leading discount outlets dipped 0.8% on-year last month from the 20.3% plunge tallied for the month before.

In Taiwan, stock market showed a solid retreat, registering its biggest one-day decline since 15 January 2009, as investors locked in profits after a recent rally that pushed the market to a seven-month high. The main Taiex share index surrendered its upward rally towards 6000 points, under the heavy selling from the investors from the point of view of profit booking through the recent rally. Taiex plumped 241.79 points or 4.03%, closing the day at 5755.38, retreating from a near seven month high registered yesterday.

In Singapore, the stock market finished the session slightly higher, led by financials and properties on increasing optimism about a recovery in the global economy, following Wall Street’s overnight gains. The blue chip Straits Times Index rose 4.81 points, or 0.25%, to 1,896.56.

In Philippines, the stock market closed higher, bucked up by the hefty gains in the key heavy weight stocks supported by positive sentiments of investors following the key policy rate cut by the monetary board yesterday. Moreover, favorable inflation forecast kept the investor’s sentiments on the optimistic side. At the concluding bell, the benchmark index PSEi escalated 1.42% or 29.47 points to 2,094.13, while the All Shares index rose 1.50% or 20.12 points to 1,358.98.

On the economic front, the Bangko ng Pilipinas (BSP) yesterday cut its policy rates by 25 basis points as expected, citing easing inflation and the need to stimulate the economy. Overnight borrowing and lending rates were trimmed to 4.5% and 6.5%, respectively, a new 17-year low. It was the fourth rate cut since December last year and brought total reductions to 150 basis points.

The Bangko ng Pilipinas considered the latest baseline forecasts, which indicated a lower inflation path over the policy horizon, with average inflation expected to settle within the target ranges in 2009 and 2010. The Bangko ng Pilipinas announced a reduction in its 2009 inflation forecast to 3.42% from 3.5% previously, still within its target of 2.5-4.5% for the year. In addition, the Monetary Board considered that, on balance, the risks to inflation are skewed to the downside given expectations of weaker global and domestic demand conditions and a low probability of a significant near-term recovery in commodity prices.

In India, a sudden fall pushed the Sensex briefly into the red in late trade with index heavyweight Reliance Industries (RIL) and metal shares leading the slide. The market, however, came off the lows on rally in other heavyweights Infosys Technlogies, Larsen & Toubro and ICICI Bank. The BSE 30-share Sensex was up 75.69 points or 0.69% to 11,023.09. The S&P CNX Nifty was up 14.90 points or 0.44% at 3384.40.

Elsewhere, Malaysia's Kula Lumpur Composite index was up 0.4% or 3.90 points to 965.17 while Indonesia’s Jakarta composite index jumped by 0.6% or 9.70 points ending the day at 1634.79.

In other regional markets, European shares moved higher on Friday, with banks and oil majors fronting the advance as shares of UBS climbed 4.9% and shares of BP up 1.1%. The French CAC-40 index rose 1.3% to 3,076.01, the German DAX 30 index climbed 0.8% to 4,645.96 and the U.K. FTSE 100 index rose 0.6% to 4,080.05.