Asian markets witness mixed trend

Shanghai post-modest gains while Sensex, Seoul ended little lower

Stock market in Asian region continued to witness mixed trend on Thursday, 9 July 2009, with participants choosing a cautious path ahead of the reporting season.

On Wall Street, stocks managed to end little higher but in a mixed mode after a day of volatile trading pressured by slipping crude price. The absence of positive catalysts led sellers to step in during mid day and send stocks lower before strong Treasury auction results encouraged buyers to step back into the action. Economic worries loomed large over stocks and the same continued with their downward slide.

The Dow Jones Industrial Average ended higher by 14.8 points at 8,178. The Nasdaq Composite Index, ended higher by 1 point at 1,747. S&P 500 ended lower by 1.4 points at 879.

In the commodity market, crude oil rebounded from a seven-week low as traders took the view that the decline in prices during the longest losing streak this year was overdone.

Crude also gained as the Washington-based International Monetary Fund said in a revised forecast yesterday that the world economy will expand 2.5% in 2010, compared with its April projection of 1.9% growth. A contraction this year will be 1.4%, worse than an April forecast for a 1.3% drop, the IMF said.

China’s passenger-vehicle sales rose 48% in June, the biggest jump since February 2006, as government stimulus spending spurred a revival in the world’s third-largest economy.

Crude oil for August delivery gained as much as 85 cents, or 1.4%, to $60.99 a barrel on the New York Mercantile Exchange, and traded at $60.81 at 3:30 p.m. Singapore time. Futures touched $60.01 yesterday before closing down 4.4% at $60.14, the lowest settlement since 19 May 2009.

Brent crude for August settlement rose as much as 94 cents, 1.6%, to $61.37 a barrel on London’s ICE Futures Europe exchange and was at $61 at 3:06. p.m. in Singapore. Yesterday, it declined $2.80, or 4.4%, to $60.43, the lowest settlement since 25 May 2009.

Gold rose from a two-month low in London as the dollar weakened for the first time in six days, increasing the metal’s appeal as an alternative investment. Bullion for immediate delivery gained $4.83, or 0.5%, to $914.33 an ounce by 9:10 a.m. in London. The metal yesterday fell the most in a month. August gold futures rose 0.5% to $914 an ounce on the New York Mercantile Exchange’s Comex division.

In the currency market, yen retreats mildly today to digest yesterday's sharp gain but after all, the trend should be formed as risk sentiments reversed since June. Among the major currencies, Aussie and Kiwi, as the highest yielder, are hardest hit so far this month, which is normal.

The Japanese yen strengthened against major currencies on Thursday. The Japanese currencies were quoted at 92.68 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 trade, the Australian dollar closed lower despite a late comeback linked to a positive lead from the domestic share market. At the local close, the Australian dollar was trading at $US0.7822, down from Wednesday's close of $US0.7863. During the local session on Thursday, the unit moved between a high of $US0.7822 and a low of $US0.7755.

The South Korean won ended at 1,279 won against the dollar, down 2.9 won from Wednesday's close, as exporters sold the Korean currency.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar gain against the US dollar as it was trading higher at NT$ 32.9900, up by NT$ 0.0460 from Wednesday’s close of NT$33.0360.

Coming back in equities, Asian shares were mixed, with some markets off their lows as investors took note of an after-hours rise in Alcoa, though recent weakness in oil and commodity prices kept the mood gloomy on the prospects for a quick economic recovery.

In Japan, the stock market extended losses for seventh consecutive day, as investors sold export oriented stocks amid concern the rising yen dimmed earnings prospects, while rekindled concern over the health of global economy weighing shares of banks and real estate. Lower crude oil and metals prices taking a toll on commodity-linked stocks. At the closing bell, the Nikkei 225 Stock Average index shed 129.69 points, or 1.38%, to 9,291.06, while the broader Topix index stumbled 14.63 points, or 1.6%, to 874.

In Mainland China, stock index recouped early losses to finish the session flat, as investors sentiments relived after the International Monetary Fund has raised its 2009 growth forecast for Asia's developing economies from 4.8% to 5.5%. IMF raised its 2009 growth outlook for China by one percentage point to 7.5%, due to its stimulus-driven investment boom and a faster-than-expected turnaround in capital flows.

The Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, rose 1.37%, or 42.26 points, to 3,123.40, while the Shenzhen Component Index added 1.2%, or 149.36 points, to 12,637.94.

On the economic front, the National Bureau of Statistics (NBS) said China's business climate index, a main measurement of macro-economic outlook, rose by 10.3 points in the second quarter (Q2) 2009 from the previous quarter. The quarterly business climate index climbed from 105.6 in the first quarter this year to 115.9, the NBS said. The index ranges from zero to 200. A reading above 100 shows economic expansion, while a reading below 100 indicates contraction.

In Hong Kong, the benchmark index clawed back morning losses to finish the session higher, snapping three days of loosing streak on the back of strong gains in carmakers after China announced upbeat June car sales. Airlines stocks zoomed as crude oil prices eased overnight and hopes for industry consolidation. The Hang Seng Index gained 69.52 points, or 0.39%, to 17,790.59, while the Hang Seng China Enterprise Index added 67.48 points, or 0.64%, to 10,641.19.

In Australia, the stock market clawed back most of early losses as investors chased for bargain among recently battered shares after a report showed that Australia's unemployment rate raised less than expected in June. Banks and properties tumbled as investors cautious about the economic outlook at the kickoff of the corporate earnings season.

At the closing bell, the benchmark S&P/ASX200 index erased 4.6 point, or 0.12%, to 3,763.3, meanwhile the broader All Ordinaries shrank 4.6 points, or 0.12%, to 3,761.4.

On the economic front, the Australian Bureau of Statistic revealed the unemployment rate increased to 5.8% seasonally adjusted in June, slightly down from the 5.9% many economists were predicting. There are now 663,000 people looking for work in Australia, up by 7,400 from May’s unemployment rate of 5.7%.

In New Zealand, stock market slipped following a lackluster session in the United States market on Wednesday. The share market dipped down today after registering two consecutive gains. The NZX50 dipped down 0.32% or 8.92 points to 2741.69. The NZX 15 decreased 0.37% or 18.93 points to close at 5079.93.

On the economic front, the Real Estate institute of New Zealand says fewer houses were sold in June than May but the average price rose slightly. REINZ said today 6040 houses were sold nationwide in June compared to 6291 in May. The average sale price rose to $340,000 - in line with June 2008 - and up from May's $337,000. The median time taken to sell fell to 41 days in June this year from 53 days in June 2008.

In South Korea, shares closed ended flat after a volatile session as institutional investors sold shares for the third day. The benchmark Korea Composite Stock Price Index (KOSPI) fell 0.13 points to 1,430.89.

In Singapore, the stock market rose on the back of gains from financials, multi-industries, and manufacturing as investors sentiments relived after the International Monetary Fund has raised its 2009 growth forecast for Asia's developing economies from 4.8% to 5.5%. The blue chip Straits Times Index rose 47.84 points, or 2.12%, to 2,307.61.

In Taiwan, stock market in Taiwan continued its seesaw movement by erasing yesterday’s losses with gains, as shares of LCD makers lead the gains in the optoelectronics sector on increasing demand for LCD panels. The main Taiex share index gave up yesterday’s losses as the Taiex index escalated 80.04points or 1.20%, closing the day at 6748.18, highest closing since 6 June 2009 when market closed the day at 6856.74.

On the economic front, the number of unemployment benefit applicants totaled 134,578 in June for a sharp rise of 45,890 from 88,688 recorded a month earlier, according to the Bureau of Labor Insurance under the Cabinet-level Council of Labor Affairs (CLA).

In the same month the unemployment benefit payments hit a six-month high of NT$2.532 billion (US$76.73 million at US$1 = NT$33), for a sizable monthly growth of nearly NT$1 billion (US$30.3 million).

In Philippines, the stock market overturned yesterday’s losses, closing higher, as investors remained in a wait and see mode ahead of the monetary policy meeting of the Philippines monetary board today. Following the abrupt decline in inflation the central bank has signaled clearly that it will further relax monetary policy in response to slowing inflation. Monetary authorities have all but guaranteed a rate cut of at least 25 basis points when they meet. The benchmark index PSEi escalated 0.48% or 11.86 points to 2,473.85, while the All Shares index climbed 0.67% or 10.58 points to 1,589.35.

In India, the key benchmark indices provisionally closed flat after moving between the positive and negative terrain throughout the day in what was a volatile trading session. The BSE 30-share Sensex was down 11.69 points or 0.08% to 13,757.46. The S&P CNX Nifty was up 2.05 points or 0.05% to 4,080.95.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.02% or 0.21 points to 1065.68 while stock markets in Indonesia’s Jakarta Composite index ended the day higher at 2083.97 points.

In other regional market, European shares rose for the first time in six sessions on Thursday, with metal stocks climbing after U.S. aluminium giant Alcoa posted better-than-expected quarterly results and SAP moved higher after a broker upgrade.

On a regional level, the U.K. FTSE 100 index advanced 0.77% 31.66 points to 4,172 ahead of a decision on interest rates from the Bank of England. The German DAX index advanced 1.42% or 64.80 points to 4,637 and the French CAC-40 index rose 1.08% or 32.36 points to 3,042.