Asian Markets took turnaround on Thursday

Shanghai claw back some losses while Sensex, Hang Seng follows with strong gains

Stock market in Asian region took a hop on Thursday, 20 August 2009; as China's wobbling market clawed back some of its steep losses and oil prices jumped on signs of improving demand. However, stocks around the region oscillated wildly as many investors were nervous that the Shanghai slide might have more room to run.

On Wall Street, crude oil rose more than $3 a barrel and energy stocks led a reversal in U.S. markets Wednesday after a report showed demand for crude and gasoline may be on the up tick. The major indices recovered from what started out as a down day, and the Dow Jones Industrial Average ultimately gained 61.22 points, or 0.7%, to 9279.16, while the S&P 500 added 6.79 points, or 0.7%, to 996.46. The Nasdaq Composite gained 13.32 points, also 0.7%, to 1969.24.

According to the latest weekly report from the Energy Information Administration, crude oil stockpiles decreased unexpectedly by 8.4 million barrels, or 2.4%, v/s. expectations for a 1.1 million-barrel build. Gasoline supplies also decreased more than expected, by 2.1 million barrels, or 1%, which indicates demand for energy, which means things are ramping up, which suggests growth. Crude rose $3.23 to $72.42 after that report.

In the commodity market, crude oil traded little changed near $72 a barrel after a government report showed U.S. inventories declined the most in 15 months as imports tumbled and refineries increased operating rates.

Crude oil for September delivery traded down 13 cents at $72.29 a barrel on the New York Mercantile Exchange at 10:17 a.m. London time. Yesterday, the contract closed up $3.23, or 4.7%, at $72.42, the highest settlement since 11 June 2009. The September contract expires today. The more-active October contract was at $73.53 a barrel, down 30 cents, at 10:10 a.m. London time.

Brent crude oil for October settlement fell 26 cents, or 0.4%, to $74.33 a barrel on the London-based ICE Futures Europe exchange at 9:16 a.m. local time.

Gold advanced for a third day after Asian stocks rose ahead of the release of data that is expected to point to a recovery in global economies. Gold for immediate delivery rose as much as 0.4% to $945.53 an ounce and traded at $943.13 at 12:45 p.m. in Singapore.

In the currency market, US dollar and yen pulled back sharply overnight following sharp rebound in commodities and subsequent energy led stocks rebound. Both currencies are still soft today on follow through rebound in Asian stock markets.

The Japanese yen softened against greenback and euro as a rebound in Chinese stocks allayed concerns that the global economic recovery is faltering, encouraging investors to buy higher-yielding assets. The Japanese yen was quoted at 94.34 per greenback, while 134.16 per euro on Thursday.

The Hong Kong dollar was trading at HK$ 7.7510 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 rose as firmer stocks in Asia, especially those in key trading partner China, underpinned demand for riskier assets. The Aussie ended the local trading day at $US 0.8310, up from $US 0.l8208 on Wednesday.

In Wellington trade, the New Zealand dollar fell sharply against the greenback overnight in the wake of a slide in the Shanghai stock market, but then zoomed up out of its hole. By 8am today the kiwi was buying US 67.44 cents, having dipped to around US 66.65 cents shortly after midnight, from US 67.57 cents at 5pm yesterday.

The South Korean won closed at 1,246.9 won against the greenback, up 8.9% from Wednesday's close, as investors shed risk-averse sentiment.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar gain against the US dollar as it was trading higher at NT$ 32.9510, up by NT$ 0.0610 from Wednesday’s close of NT$33.0100.

Coming back in equities, most of the Asia stocks ended higher following the a big rebound staged by Chinese stocks, recouping their hefty losses from the previous session as they remained confident about earnings and economic growth prospects in spite of a sharp recent correction.

Most other regional markets ended higher as well, with energy producers getting a lift after crude-oil prices topped $72 a barrel, though Taiwanese shares lost ground on concerns about a cabinet reshuffle.

In Japan, the shares market recouped from three-week closing low hit yesterday on broad based bottom fishing, boosted by strong finish of Wall Street overnight, stronger commodity prices, and on rise in Shanghai stocks. Oil developers, trading houses led the rally after crude futures surge overnight. Shares of materials and resources spurted on the back of firmer base metal prices. Shares of blue chip companies such as Canon, Toyota and other automakers after brokerages houses upgraded rating for the sector.

At the closing bell, the Nikkei 225 Stock Average index rose 179.41 points, or 1.76%, to 10,383.41, meanwhile the broader Topix index climbed up15.34 points, or 1.63% to 958.59.

On the economic front, the Japan Iron and Steel Federation said that Crude steel output in Japan dropped 24.9% in July from a year earlier to 7.66 million tons, down from year-before levels for the 10th straight month due to weak demand amid the global economic slowdown. But the pace of decline became slower for the fourth month in a row, as production at auto and electronics makers has begun to pick up, an industry body said.

In Mainland China, share market rebounded after benchmark index briefly entered a so-called bear market yesterday, boosted by broad based bottom fishing among energy, materials, and industrials shares after crude oil and metal prices bounced overnight and rekindled recovery sign. Banks and properties spurted on sign of government support for the sliding stock market. Meanwhile better than expected earning from ZTE Corp also supported the rally.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, advanced 126 points, or 4.52% to 2,911.58, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, bounced 4.31%, or 129.82 points to 3,144.39.

On the economic front, the State Administration of Foreign Exchange said that China current account surplus of $130 billion in the first half of 2009, down 32% on year.

In Hong Kong, benchmark index rebounded from one month closing low in the previous session on tracking a rebound in Chinese peers on signs of regulatory support, with higher commodity prices. Investors hunted for bargains after the market's recent steep slide. The Hang Seng Index spurted 374.63 points, or 1.88%, to 20,328.86, while the Hang Seng China Enterprise surged 258.01 points, or 2.29%, to 11,518.84.

In Australia, the stock market pared gains to finished the session edge higher as a weak outlook from conglomerate Wesfarmers and lower than expected earning from stock exchange operator ASX offset early gains inspired from positive finish of Wall Street overnight, stronger commodity prices and generally upbeat earnings results Bramble’s. At the closing bell, the benchmark S&P/ASX200 index rose 3.70 points, or 0.08%, to 4,377.5, meanwhile the broader All Ordinaries added 3.8 points, or 0.09%, to 4,391.3.

On the economic front, the Australian Bureau of Statistics said that Australia’s July merchandise imports increased by 6% to A$16.698 billion over the revised figure for June2009. The preliminary balance of payments increased by 4% or a seasonally adjusted A$678 million compared to the month before.

The Reserve Bank of Australia said in the statement that Australians spent A$19.365 billion on their credit and charge cards in June2009, an increase of 9.19% from the previous month and the highest monthly total in 2009. The value of all purchases rose 8.94% to A$18.397 billion, the highest monthly total this year, while cash advances were up 14.19% at A$998 million.


In New Zealand, stock market ended down in line with most of the Asian markets that were trading lower. The NZX50 was down 0.91% or 27.94 points to 3053.11. The NZX 15 declined 0.96% or 54.47 points to close at 5618.97.

In South Korea, stocks closed higher as rebounding global shares cheered investor confidence. The benchmark Korea Composite Stock Price Index (KOSPI) advanced 30.43 points to 1,576.39.

In Singapore, the stock market spurted with broad based buying across the sector, with the positive sentiment from Wall Street's overnight and stronger commodity prices and the mood was further supported by a sharp rebound in Chinese equities. Banks and properties shares led the rally. Meanwhile multi industries, construction, and manufacturing shares in line with market rally. The blue chip Straits Times Index jumped 36.79 points, or 1.46%, to 2,559.39.

In Taiwan, stock market tanked on Thursday ending the session at five weeks low, as Premier Liu Chao-shiuan has announced a major reshuffle in the Cabinet by early September in the aftermath of the deluge triggered by typhoon Morakot.

The benchmark Taiex share index continued losing for the fourth session as it ended the session lower by 55.35 points or 0.82% in a day, closing the day at 6733.23, lowest closing since 13 July 2009 when market closed the day at 6530.82.

In Philippines, the stock market overturned yesterday’s gain closing lower; as investors engaged themselves in profit taking activities amid the flimsy economic prospects, which points that difficulties stands ahead for Philippines economy. The National Economic and Development Authority (NEDA) projection of GDP showed a marked deceleration. At the final bell, the benchmark index PSEi lost 1.47% or 40.71 points to 2,720.18, while the All Shares index fell 1.20% or 21.34 points to 1,744.29.

In India, volatility struck bourses as the key benchmark indices trimmed strong intraday gains. The BSE 30-share Sensex was up 202.68 points or 1.37% to 15,012.32. The S&P CNX Nifty was up 59.35 points or 1.35% to 4,453.45.

On the economic front, inflation based on the wholesale price index (WPI) declined 1.53% in the year through 8 August 2009; government data released today, 20 August 2009 showed. The decline was lower than the previous week's annual fall of 1.74%. It was the tenth consecutive fall in the headline inflation.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.68% or 7.90 points to 1163.43 while stock markets in Indonesia’s Jakarta Composite index ended the day lower at 2328.64.

In other regional market, European shares rose for the second time in a choppy week, with oil producers and miners getting a boost from commodity price moves and Ahold and Holcim up on forecast-beating results. On a regional basis, the U.K. FTSE 100 index climbed 1.3% or 60.85 points to 4,751, the German DAX index advanced 1.33% or 69.40 points to 5,301 and the French CAC-40 index rose 1.44% or 49.68 points to 3,500.