Asian markets edge higher

Shanghai, Sydney, Sensex post positive numbers while Taiex bucks regional upswing

Stock market in Asian region continues to teeter between gains and losses as it ended higher on Wednesday, 26 August 2009, tracking the overnight positive close on Wall Street on the back of a better-than-expected surge in consumer confidence prompting investors to go in for some selective buying. Positive earning reports from China fuel the rally.

On Wall Street, economic data supported a broad-based rise in stocks as Fed Chairman Ben Bernanke was renominated. The Dow Jones Industrial Average rose 30.01 points, or 0.3%, to 9539.29, while the S&P 500 climbed 2.43 points, or 0.2%, to 1028. The Nasdaq Composite was up 6.25 points, or 0.3%, to 2024.23.

Home-price data juiced housing stocks, and the broader indices got an upward jolt after the Conference Board reported that consumer confidence rose to 54.1 in August, from 46.6 the month prior and well above expectations for 47.9. The present situation index increased just slightly to 24.9 from 23.3 last month, the expectations index improved more significantly to 73.5, its highest level since December 2007, from 63.4 in July.

In the commodity market, crude-oil prices moved around the $72-a-barrel level in electronic trade, with investors awaiting weekly data on U.S. inventories to assess whether the data supported a further price increase after a recent rally. The Energy Information Administration is due to release its closely watched report on inventories for the week ended 21 August 2009 later Wednesday.

Crude oil for October delivery traded at $72.09 a barrel, up 4 cents, in after-hours trading on the New York Mercantile Exchange at 3 p.m. in Singapore, recovering on the back of gains in regional equities after dropping as low as $71.35 earlier in the day. The front-month contract jumped above the $75-a-barrel level in U.S. trading for the first time in 10 months, before reversing direction on profit taking. The futures contract ended $2.32, or 3.1%, lower at $72.05 Tuesday on the New York Mercantile Exchange.

Brent crude oil for October settlement traded at $72.03 barrel, up 21 cents, on the London-based ICE Futures Europe exchange at 3 p.m. Singapore time. Yesterday, the contract fell $2.44, or 3.3%, to $71.82.

Gold advanced for a second day on signs a recovery in global economies may be weakening, spurring haven demand for the precious metal. Gold for immediate delivery advanced 0.3 percent to $947.35 an ounce at 2:59 p.m. in Singapore.

In the currency market, the U.S. dollar moved in a tight range against major currencies in cautious trading, after rebounding during North American trade.

The Japanese yen strengthened against major currencies on Wednesday, 26 August 2009 as a smaller-than-expected July trade balance data from Japan prompted investors flee from riskier-assets. The Japanese yen was quoted at 93.89 per greenback, down from Tuesday’s quote of 94.31 yen.

The Hong Kong dollar was trading at HK$ 7.7505 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 ended the day flat, as a lack of direction kept the currency within recent ranges. At the local close, the dollar was trading at $US0.8359, little changed from Tuesday's close of $US0.8362. During the day, the unit moved between $US0.8332 and $US0.8379.

In Wellington trade, the New Zealand dollar held around 11-month highs against the greenback. The NZ dollar was US 68.68 cents at 5pm from US 68.45 cents at 8am and US 68.52 cents at 5pm yesterday.

The South Korea won ended at 1,245.3 won against the greenback, up 2.9 won from Tuesday's close, as offshore investors continued to purchase local stocks.

The Taiwan dollar strengthened slightly against the greenback. The Taiwan dollar gain against the US dollar as it was trading higher at NT$ 32.9150, up by NT$ 0.0050 from Tuesday’s close of NT$32.9200.

Coming back in equities, Asian stocks edged higher, with thin summer trading volumes keeping prices choppy while oil hovered near $US72 a barrel, capped by a surprising rise in US inventories.

In Japan, shares market gained following a strong finish of Wall Street overnight buoyed by upbeat US economic data that strengthen optimism over an economic recovery and a rebound in Shanghai shares boosted Japanese exporters. Automakers shares bounced on new Toyota Motor Corp will cut its global production capacity to match lower sales. Banks and financials, real estate, and insurance shares surged as bargain hunters stepped in. Shares of Japanese electronics surged rose on short covering on upbeat U.S. housing and US consumer confidence beat expectations.

At the closing bell, the Nikkei 225 Stock Average index surged 142.35 points, or 1.36% to 10,639.71, meanwhile the broader Topix index spurted 10.48 points, or 1.09%, to 975.59.

On the economic front, the Ministry of Finance report showed that country’s merchandise trade surplus of 380.2 billion yen in July2009, following the revised 507.5 billion surpluses in June2009.

The government report showed the country’s exports fell 36.5 % in July2009 from a year earlier. Exports fell 1.3% on month for the first monthly drop in two months. Imports in July declined 40.8% on year, after the 41.9% fall in the previous month.

The Bank of Japan said today in a preliminary report that an index measuring corporate service prices in Japan was down 3.4% on year in July to a score of 92.6. On a monthly basis, prices were down 0.2% after adding 0.4% in the previous month.

In Mainland China, share market bounced back from early weakness, on bargain hunting across the sector as the market was oversold yesterday and the half-year earnings of many companies are decent. Property developers led the rally after better than expected earning from Poly Real Estate Group. Airline stocks bounced after Air China first-half profit more than doubled from a year earlier. Materials, industrials and energy shares rebounded on short covering. Consumer staple and consumer discretionary sector lifted up by rising US consumer confidence reading.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, climbed up 51.79 points, or 1.78% to 2,967.59, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, mounted higher 2.01%, to 3,172.39.

In Hong Kong, benchmark index closed the choppy session edge higher on Wednesday, 26 August 2009, as gains in major banks and financials on better than expected earning. China Life Insurance and Air China outperformed after the company beats earning estimate. The Hang Seng Index climbed 21.08 points, or 0.1%, to 20,456.32, while the Hang Seng China Enterprise rose 2.32 points, or 0.02%, to 11,657.13.

In Australia, the stock market bounced with the broad based gain across the major sector, as a strong finish of Wall Street overnight and well received company reports. Property trusts were the standout performers today on the back of sharp gains from Westfield Group after posting 1H09 earning that meet market expectation. Shares in the major miners were up despite pullback in base metal prices. Retailers climbed up on better-than-expected US consumer confidence reading. Financials, consumer staple, and telecom shares were also higher.

At the closing bell, the benchmark S&P/ASX200 index surged 48.7 points, or 1.11%, to 4,454.5, meanwhile the broader All Ordinaries spurted 46.9 points, or 1.06%, to 4,464.4.

On the economic front, the Australian Bureau of Statistics (ABS) said that total construction work done in Australia fell 0.1% in the quarter-ended June2009 in chain volume terms, seasonally adjusted Total construction work done was valued at $35.031 billion in the June quarter, compared with an upwardly revised $35.062 billion in the March quarter.

The Department of Employment and Workplace Relations said in the report that Job vacancies for skilled workers in Australia increased by 1.0% in August from July. The index reading for August was 37.1, notably lower than the 55.7% reading of August 2008.

In New Zealand, stock market ended the day in the positive terrain as most of the Asian markets also gained trailing optimism on the United States overnight. The NZ benchmark index rose for a third day in a row on Wednesday. US stock rose higher after assurance of stability, encouraged investors coupled by positive economic data. The NZX50 advanced 0.34% or 10.39 points to 3090.90. The NZX 15 added 0.19% or 10.58 points to close at 5702.53.

In South Korea, stocks ended higher as investors snapped up undervalued shares and the U.S. economy showed signs of life. The benchmark Korean Composite Stock Price Index (KOSPI) added 12.74 points to 1,614.12, the highest close since 24 July 2008.

In Singapore, the stock market surged as investors chased for discounted buying as a strong finish of Wall Street overnight on better-than-expected US consumer confidence reading strengthen the hope of global economy recovery. Investors chased for bargain on recently battered shares and major blue chips amid tentative signs of a recovery as policymakers around the world responded with a series of unprecedented actions. The blue chip Straits Times Index bounced 9.67 points, or 0.37%, to 2,628.43.

On the economic front, the Economic Development Board of Singapore said Singapore’s industrial production unexpectedly surged in July 2009 as pharmaceuticals output jumped and the electronics slump eased, heralding a sustained economic recovery. The industrial output grew 12.4% year-on-year in July, reversing a revised 9% fall in the preceding month

In Taiwan, stock market in Taiwan failed to escape its worries on Wednesday, 26 August 2009, as jitters about the spread of the H1N1 flu virus hit tourism and airline stocks. About 400 people were reported to have become sick with suspected swine flu in a southern Taiwan village hit by Typhoon Morakot earlier this month.

According to the estimate of Kuo Hsun-sung, director of the Centers for Disease Control (CDC), under the Department of Health of the Executive Yuan, both the government and the private sector are gearing up in full swing to cope with the onset of new flu H1N1, which threatens to afflict seven million Taiwanese people, or one third of the local population, at its peak.

The benchmark Taiex share index extended its losing streak in second straight session as its finished the session lower by 90.20 points or 1.32% in a day, closing the day at 6719.21.

On the economic front, Taiwan’s substantial gross domestic product (GDP) for the second quarter of the year saw a sharp growth of 20.69% over the same quarter of last year, representing the first positive rise of its kind after declining for four consecutive quarters, and the seasonally adjusted GDP is estimated to bounce back to NT$3.3 trillion (US$100 billion at US$1 = NT$33) in the fourth quarter of the year.

According to Chen Tien-chih, chairman of the Cabinet-level Council for Economic Planning and Development, Taiwan’s GDP reached NT$3.3 trillion (US$100 billion) in the first quarter of last year, but kept trending downward ever since, with the substantive GDP plunging 27.2 % in the fourth quarter of 2008. This meant that Taiwan was severely impacted by the global financial tsunami.

In Philippines, stock market overturned yesterday’s losses, closing marginally lower as investors snapped up bargain stocks ahead of the release of second quarter economic output. Citing improved economic conditions, the Monetary Board of the central bank last week, ended its rate easing cycle when it kept its overnight borrowing rate at 4% and lending rate at 6%. Moreover, gains on Wall Street overnight also assisted the composite index to scale up. The benchmark index PSEi escalated 0.18% or 5.38 points to 2,863.53, while the All Shares index mounted 0.37% or 6.76 points to 1,817.39.

In India, stocks ended a volatile trading session with decent gains after the Finance Minister said economic reforms would boost growth. The market rose for the fifth day in a row. The BSE 30-share Sensex was up 81.38 points or 0.52% to 15,769.85. The S&P CNX Nifty rose 21.50 points or 0.46% to 4,680.85.

On the economic front, India's infrastructure output rose 1.8% in July 2009, much lower than a revised 6.8% growth in June 2009, government data released a little while ago showed. Infrastructure output had risen 5.1% in the same month last year. The infrastructure sector accounts for 26.7% of industrial output.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.13% or 1.47 points to 1172.56 while stock markets in Indonesia’s Jakarta Composite index ended the day lower at 2380.09.

In other regional market, European shares traded with mild losses on Wednesday, snapping a four-session run of gains, hurt by oil and gas firms despite strength for financials and gains from Alcatel-Lucent and Heineken. On a regional level, the U.K. FTSE 100 index traded down 0.4% or 19.22 points at 4,898, the German DAX index edged down 0.7% or 36.38 points at 5,521, and the French CAC-40 index declined 0.4% or 14.69 points at 3,666.