Asian markets rebound on Wall Street retrieval

Snaps four days losing streak as economic revival brightens

Stock market in Asian region snapped its four days losing streak on Friday, 19 June 2009, as investors decided to switch over to the buying mode again following a series of encouraging economic data from the U.S. overnight which took Wall Street higher. Most of the regional markets tried to come off from their recent losses as a section of participants choosing to lighten commitments ahead of the weekend.

On Wall Street, financials helped two of three major indices in recording modest gains after a slate of somewhat improved economic data and remarks from Treasury Secretary Tim Geithner on the proposed financial system overhaul. The Dow Jones Industrial Average finished up 58.4 points, or 0.7%, to 8555.60, while the S&P 500 was higher by 7.66 points, or 0.8%, at 918.37. The Nasdaq Composite, however, was just slightly lower, down 0.34, or 0.02%, at 1807.72.

In the commodity market, crude oil rose for a third day on speculation that fuel demand will recover as the global economy emerges from its slump.

Crude oil for July delivery was at $72.25 a barrel, up 88 cents, in electronic trading on the New York Mercantile Exchange at 11:55 a.m. London time.

Brent crude for August settlement was at $71.82 a barrel, up 76 cents, on London’s ICE Futures Europe exchange at 12:14 p.m. London time.

Gold, little changed, headed for the longest weekly declining streak in two months as the dollar rallied, eroding demand for the metal as a haven investment. Gold for immediate delivery was at $935.60 an ounce at 11:54 a.m. in London. The metal is heading for a third weekly drop, the longest declining streak since 17 April 2009.

In the currency market, it was rather a quiet today as major pairs remain confined in tight range in general except is USD/JPY which extends yesterday's rebound and reaches as high as 96.75 so far. Aussie is generally higher today following recovery in Asian stocks but the strength is so far mild. The economic calendar is rather light today and markets will likely continue to stay in familiar range to close the week.

The Japanese yen softened against greenback on Friday. The Japanese currency quoted at 96.75 against greenback.

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 trade, the Australian dollar climbed against greenback on Friday, getting a boost from better-than-expected U.S. economic data that pointed to a possible recovery among manufacturers. The Aussie was quoted at 80.30 cents against the greenback.

In Wellington trades, the NZ dollar ended at US63.85c, up from US63.02c yesterday. The New Zealand dollar ended the week pretty close to where it started it even though the central bank tried to talk the currency down.

According to TD Securities senior strategist Annette Beacher, another cut to the Official Cash Rate (OCR) would be a more effective way for the Reserve Bank to weaken the Kiwi dollar. Beacher said that while the US dollar's weakness accounted for some of the Kiwi's strength, even on a trade weighted index (TWI) basis the New Zealand currency was overbought

The Taiwan dollar strengthened against the greenback. The Taiwan dollar gained against the US dollar as it was trading higher at NT$ 32.8780, up by NT$ 0.0260 from Thursday’s close of NT$32.9040.

Coming back in equities, Asian markets ended broadly higher, as financials advanced in China after the country opened the door for new share listings, while chipmakers gained on upbeat industry data.

In Japan, the stock index surged with strong gains in financials, miners, and exporters after an overnight rally on Wall Street on reassuring U.S. jobs and manufacturing data, firmer commodity prices, and the US dollar’s advance against the yen. The Nikkei 225 Stock Average index climbed up 82.54 points, or 0.85% to 9,786.26, while the broader Topix index rose 7.76 points, or 0.8% to 919.

On the economic front, in the outcome of minutes from the May 21 and 22 monetary policy meeting, the Bank of Japan board member revealed that the policy move that allowed foreign debt to be used as collateral could possibly become a permanent condition. The minutes also indicated that the continuation of the unusual measures would depend on the response of the markets. The board expects that private consumption could weaken further, and that it must be vigilant against a decline in inflation expectations and volatility in long-term rates.

At the meeting, the board unanimously decided to maintain the uncollateralized overnight call rate at 0.1%. The central bank also expanded the range of eligible collateral to ensure financial market stability by further facilitating money market operations.

In Mainland China, stock markets endured gains for third straight day, driving the benchmark index to a 10-month closing high, with strong gains in financials after the securities regulator approved the nation's first initial public offering (IPO) since September and the World Bank reinforced the belief that the economy is recovering and Premier Wen Jiabao reiterated the government won’t tighten lending conditions.

The Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, jumped 0.93%, or 26.58 points, to 2,880.49, while the Shenzhen Component Index added 0.8%, or 90.66 points, to 11,242.29.

In Hong Kong, the stock market climbed, snapping four days of loosing streak, with broad based gains across the board, thanks to a recovery on Wall Street after reassuring U.S. jobs and manufacturing data boosted hopes for a global economic recovery.

The Hang Seng Index leaped 144.27 points, or 0.81%, to 17,920.93, meanwhile the Hang Seng China Enterprise Index jumped 87.54 points, or 0.84% to 10,509.85.

In Australia, the stock market snapped four days of losing streak, thanks to a recovery on Wall Street and firmer commodity prices. Shares of energy, miners and materials led the rally on the back of rebound in base metal and crude oil prices. Meanwhile financials finished higher on tracking U.S. peers after brokerage houses upgrade outlook for US financials. Industrials and healthcare shares were also in above the line on bottom fishing following four days of sell off.

At the closing bell, the benchmark S&P/ASX200 index surged 7.50 points, or 0.19%, to 3,899.6, while the broader All Ordinaries spurted 7 points, or 0.18%, to 3,894.4.

On the economic front, the Reserve Bank of Australia data showed that Australians' credit card balances fell for the first time since records began 14 years ago. Consumers collectively spent A$17.376 billion, or 7.5 percent less, on their credit cards in April than in the previous month. RBA's monthly bulletin says the major banks' average net interest margin (NIM) for their Australian operations was nine basis points higher than in the previous half in the half-year to March 2009.

In New Zealand, benchmark index dipped down on Friday to end the week in the negative terrain after registering small gains yesterday. The share market fell despite gains in most of the Asian markets as top stock Telecom slipped from its highest level in nearly six weeks reached yesterday. The NZX50 fell 0.50% or 13.969 points to 2784.273. The NZX 15 declined 0.47% or 24.052 points to close at 5103.733.

In South Korea, stocks closed 0.55% higher, as investors went bargain hunting following recent losses. The benchmark Korea Composite Stock Price Index (KOSPI) climbed 7.58 points to 1,383.34.

In Singapore, the stock index snapped four days of loosing streak on the back of broad based bottom fishing across the sector, thanks to a recovery on Wall Street after reassuring U.S. jobs and manufacturing data boosted hopes for a global economic recovery. The blue chip Straits Times Index spurted 35.98 points, or 1.61%, to 2,273.18.

In Taiwan, stock market closed the week in positives, ending the day at one-week high, as upbeat U.S. economic data lifted tech and financial shares, but Powerchip slid as it tried to reach agreement with bondholders. The main Taiex share index snapped its downward rally in sixth session as the Taiex index jumped 86.62 points or 1.41%, closing the day at 6231.15, strongest closing since last Friday when market closed at 6448.23.

In Philippines, the stock market sustained its downward trend, closing more than 1% lower as investors engaged in profit booking activities. Moreover, weighty losses in the key heavy weight stocks also dragged the composite index lower. The benchmark index PSEi fell 1.47% or 35.96 points to 2,398.30, while the All Shares index declined 1.85% or 29.17 points to 1,545.10.

In India, the key benchmark indices spurted in late trade led by rally in realty, metal and capital goods stocks. Higher European stocks and gains in US index futures boosted the market in was a highly volatile trading session. The BSE 30-share Sensex was up 256.36 points or 1.80% to 14,521.89. The S&P CNX Nifty was up 62.20 points or 1.46% to 4,313.60.

Elsewhere, Malaysia's Kula Lumpur Composite index went down 1.54% or 16.49 points to 1054.41 while Indonesia’s Jakarta composite index ended the day lower at 1950.99.

In other regional market, European shares climbed on Friday, with miners and banks gaining as investors continued to hope that the global economy has moved past the worst of its downturn. On a regional level, the U.K.'s FTSE 100 index rose 1.5% to 4,346.91, the French CAC-40 index moved up 1% to 3,226.69 and the German DAX index gained 0.1% to 4,841.20.