Asian markets ends mixed

Shanghai, Sydney ends higher while Sensex, Taiex ends lower

Stock market in Asian region closed mixed on Tuesday, 4 August 2009, as the overnight sharp surge on Wall Street buoyed up once again and lifted most of the key indices in the region to new multi-month highs in the initial trade. But the gains couldn’t be sustained as investors decided to book some profits on the renewed hopes about the recovery.

On Wall Street, investors had quite a sideshow Monday as the Securities Exchange Commission charged Bank of America with a list of unpleasant offenses before a lightning-quick settlement. In addition, good earnings, auto sales and the S&P 500 topping 1000 for the first time since November 2008, after better-than-expected data on U.S. manufacturing and a surprise increase in construction spending helped the major indices to start the month of August with more than 1% gains.

The Dow Jones Industrial Average rose 114.95 points, or 1.3%, to 9286.56, and the S&P 500 tacked on 15.15 points, or 1.5%, to 1002.63. The Nasdaq Composite added 30.11 points, or 1.5%, to 2008.61.

The stock of Bank of America closed up 3.6% at $15.32, after the Securities and Exchange Commission charged the bank with making materially false and misleading statements and misstating its agreement with Merrill Lynch regarding year-end bonuses. The bank immediately settled the charges, agreeing to pay a $33 million penalty, without admitting guilt. It also announced an executive shakeup.

On the economic front, the Institute for Supply Management said midmorning Monday that manufacturing contracted for the 18th consecutive month, but at a slower rate in July. The purchasing managers' index rose to 48.9, up from 44.8 the month prior and topping expectations for 46.5. ISM said the overall economy still grew for the third straight month and the new orders index increased 6.1 percentage points to 55.3.

More positive data came from the Commerce Department, which reported construction spending increased 0.3% in June after a 0.8% decline in May and vs. expectations for a drop of 0.5%.

In the commodity market, crude oil fell from a seven-week high on speculation that prices have risen faster than a recovery in fuel demand.

Crude oil for September delivery fell as much as $1.06, or 1.5 percent, to $70.52 a barrel on the New York Mercantile Exchange. It was at $71.10 a barrel at 2:33 p.m. Singapore time. Yesterday, futures rose $2.13, or 3.1 percent, to $71.58, the highest settlement since 12 June 2009.

Brent crude oil for September settlement dropped as much as $1.31, or 1.8 percent, to $72.24 a barrel on London’s ICE Futures Europe Exchange. It was at $73.25 a barrel at 2:42 p.m. in Singapore.

Gold declined on speculation that the metal’s rise to an almost two-month high may cause investors to sell some of their holdings. Gold for immediate delivery fell 0.2% to $954.60 an ounce at 2:20 p.m. in Singapore.

In the currency market, the US dollar and Japanese yen turned sideway in Asia as markets digest yesterday's losses.

The Japanese yen was quoted at 95.2 against the US dollar, up from Monday’s quote of 95.03 yen.

The Hong Kong dollar was trading at HK$ 7.7500 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 set a high for the year for the third day in a row as the Reserve Bank of Australia dropped its easing bias, suggesting rates could rise here well before the rest of the developed world.

The Reserve Bank of Australia left interest rates unchanged at 3%, but closed the door on the chance of further easing in an expression of confidence on the economy at home and abroad.

The Aussie had risen a cent to as far as $US0.8471 before the announcement, but drifted off to $US0.8422 after as the statement was not as hawkish as some had wagered on. At the close of local trade, the dollar was buying $US0.8433, up form yesterday's close of $US0.8357.

In Wellington trade, the New Zealand dollar stayed up around its 10-month high against the US greenback today and it could be headed higher. At 5pm today the NZ dollar was worth US66.77 cents, up from US66.30c yesterday.

The South Korean won ended at 1,218.0 won to the U.S. dollar, up 4.4 won from Monday's close, this year's highest level. Solid foreign stock buying boosted demand for the won.

The Taiwan dollar strengthened strongly against the greenback. The Taiwan dollar added against the US dollar as it was trading higher at NT$ 32.6720, up by NT$ 0.0940 from Monday’s close of NT$32.7680.

Coming back in equities, Asian markets ended mixed, with the advance on Wall Street and recent gains in commodities broadly lifting shares of miners and energy producers.

In Japan, the share markets finished the session higher, as strong gains in the shares of marine transportation, securities trading firm. Tech exporters were stronger on signs of US economic recovery. Materials and resources and oil & coal shares bounced amid expectations a recovering global economy will boost demand. At the closing bell, the Nikkei 225 Stock Average index surged 22.54 points, or 0.2%, to 10,375.01, while the broader Topix index rose 1.46 points, 0.1%, to 959.02.

In Mainland China, Shanghai benchmark indices surged with the benchmark index registering its fourth consecutive day of surge in a row buoyed by materials and energy sector after firmer base metals and crude oil prices and strong gains on Wall Street overnight and yesterday on more signs of economic activity picking up speed.

At closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, added 0.26% to 3,471.44, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, dived 0.01% to 3,786.62.

In Hong Kong, the benchmark Hang Seng Index erased early gains to finish the session edged lower as losses among properties and major heavyweight amid worries about companies’ valuation offset gains by HSBC after solid corporate results. Chinese banks were lower amid fears that the Beijing might tighten capital requirements and crimp banks’ ability to lend.

The Hang Seng Index tumbled 10.83 points, or 0.05%, to 20,796.43, while the Hang Seng China Enterprise has lost 149.53 points, or 1.21%, to 12,218.57.

In Australia, the stock market surged with the benchmark index registering its fourth consecutive day of surge in a row powered by strength in the materials and resources and energy sector after firmer base metals and crude oil prices and strong gains on Wall Street overnight. Financials
extended recent gains after Goldman Sachs and Citigroup upgrade rating for major Australian banks.

At the closing bell, the benchmark S&P/ASX200 index surged 45.9 points, or 1.08%, to 4,309.3, meanwhile the broader All Ordinaries spurted 43.4 points, or 1.02%, to 4,313.9.

On the economic front, the Australian Bureau of Statistics said the short-term visitor arrivals dropped a seasonally adjusted 5.1% month-on-month in June. On an adjusted basis, visitor arrivals decreased to 442,500 in June from 466,200 in the preceding month. Meanwhile, the short-term tourist departures fell a seasonally adjusted 0.4% in June from May to 508,200

The Australian Bureau of Statistics reported Tuesday that retail sales declined a seasonally adjusted 1.4% to A$19.42 billion in June2009, compared to A$19.70 billion in May2009. Retail sales for the June quarter rose 2%

The Australian Bureau of Statistics the house price index climbed 4.2% in the June 2009 quarter. This was considerably above the forecast 2% rise.

The Reserve Bank of Australia (RBA) left its key interest rate unchanged as expected for the fourth month. The official cash rate now stands at 3%, the lowest level in 49 years.

In New Zealand, stock market continued to rise higher by more than 1%, with the benchmark index registering its fourth consecutive day of surge in a row on Tuesday. The early confidence in this country came after global stocks surged to a nine-month high, with improved economic data coming out of the United States and China. Asian markets were mostly higher early Tuesday following strong gains on Wall Street. The NZX50 increased by 1.45% or 44.95 points to 3092.80. The NZX 15 ascended 1.40% or 80.02 points to close at 5718.36.

In South Korea, stocks closed 0.09% higher led by auto and tech shares. The benchmark Korea Composite Stock Price Index (KOSPI) rose 1.39 points to 1,566.37, marking a four-day gaining streak. Foreign investors scooped up a net 530 billion won worth of local shares, tracking recent bullish Wall Street trading.

In Singapore, the stock market stumbled as investors took profits in major blue chip following a strong recent rally. Shares of banks and finance dragged down the market amid cautious about risks arising from higher valuations and expensive share prices. properties and multi-industries shares were mixed amid bout of profit booking and dip buying. The blue chip Straits Times Index slid 32.88 points, or 1.23%, to 2,648.76.

In Taiwan, benchmark index gave up its 7000 mark as posted the worst single day drop in more than three weeks, closing the day at lowest level in two weeks, as investors continued to book profit from technology and financial stocks which leaded the recent rally in the regional stock market. The domestic market also sidelined the positive cues given by the Wall Street closing.

The main Taiex share index continued to loose its shine as it dumped 100.84 points or 1.43%, closing the day at 6955.87, the lowest closing since 21 July 2009 when markets closed the day at 6953.34. It is also the worst single day percentage drop since 13 July 2009 when market tanked 239.04 points.

On the economic front, the number of unemployment benefit applicants totaled an estimated 110,000 in July, down by 24,578 from a month earlier. According to the Bureau of Labor Insurance (BLI), in the same month the number of first-time applicants saw a monthly drop of 2,151 to around 14,000. Lo Wu-hu, deputy general manager of Bureau of Labor Insurance indicated that a person has to have been covered by labor insurance for at least one year before being qualified to apply for unemployment benefits. So new college graduates are unqualified to apply for such benefits. This may explain the drop in applicants for unemployment benefits in July, usually a month with a high jobless rate.

In Philippines, the stock market sustained its upward trend, closing nearly 2% higher, buoyed by positive earning reports released by the local companies. Furthermore the investors are looking forward for the July inflation data, which will be released tomorrow. The investor’s are expecting the inflation to ease further, which will provide the monetary boardroom for further domestic policy easing.

At the final bell, the benchmark index PSEi mounted 1.82% or 51.85 points to 2,886.96, while the All Shares index rose 1.91% or 34.21 points to 1,820.27

In India, key benchmark indices edged lower, reversing gains in the preceding three trading sessions, as lower European stocks and US index futures triggered profit taking after a recent solid rally.

The BSE 30-share Sensex was down 93.25 points or 0.59% to 15,830.98. The Sensex opened 38.42 points higher at 15,962.65. The Sensex rose 78.23 points at the day's high of 16,002.46 in early trade, its highest level since 2 June 2009. The Sensex lost 225.10 points at the day's low of 15,699.13 in mid-afternoon trade

The S&P CNX Nifty was down 30.90 points or 0.66% to 4,680.50. The Nifty struck high of 4731.45, it’s highest since 4 June 2008 in opening trade.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.73% or 8.57 points to 1179.88 while stock markets in Indonesia’s Jakarta Composite index ended the day higher at 2360.09.

In other regional market, European shares couldn't build on strong gains from the previous session on Tuesday, with food producers and telecoms under pressure, although the banking sector gained as lenders BNP Paribas and UBS updated on second-quarter trends. On a regional level, the U.K. FTSE 100 index declined 0.8% or 37.21 points to 4,645, the German DAX index fell 0.74% or 40.24 points to 5,387 and the French CAC-40 index lost 0.56% or 19.50 points to 3,458.