Friday fever grips Asian markets

Shanghai, Sensex ends lower while Sydney, Seoul ends higher

Stock market in Asian region rose on Friday, 14 August 2009, as higher metal prices and anticipation of more takeovers fueled speculation a five-month rally will continue.

On Wall Street, stocks flaunted their resilience after Wednesday's rally, pulling off another, albeit smaller, wins despite disappointing data. After an up-and-down day, the Dow Jones Industrial Average ultimately tacked on 36.58 points, or 0.4%, to 9398.19. The S&P 500 advanced 6.92 points, or 0.7%, to 1012.73, and the Nasdaq Composite added 10.63, or 0.5%, to 2009.35.

Earlier in the day, disappointing retail, foreclosure, and jobless claims data took away some of the excitement that followed an unexpected increase in GDP in France and Germany and the Fed's most recent release.

In the commodity market, crude oil rose for a third day before a report forecast to show that industrial production in the U.S. rose for the first time in nine months, adding to optimism the global economy is reviving.

Crude oil for September delivery rose as much as $1.08, or 1.5%t, to $71.60 a barrel on the New York Mercantile Exchange, and traded at $70.96 at 9:52 a.m. in London.

Brent crude oil for September settlement gained as much as 80 cents, or 1.1%, to $74.28 a barrel on London’s ICE Futures Europe exchange. It was at $74.02 a barrel at 9:52 a.m. in London.

Gold climbed for a third day and headed for a fifth weekly advance as investors sought an alternative to a weakening dollar and commodities rose on signs of an economic turnaround. Gold for immediate delivery rose 0.2% to $956.47 an ounce at 2:03 p.m. in Singapore.

In the currency market, US dollar pares some of its overnight losses and remains in tight range against most major currencies in Asia today. Near term support levels in most pairs are still holding well for the moment and hence, there is generally no change in the anticipation of another round of dollar rally in near term.

The Japanese yen edge higher against major currencies. The Japanese yen was quoted at 95.25 per greenback, down from Thursday’s quote of 95.27 yen.

The Hong Kong dollar was trading at HK$ 7.7506 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 nearly 1 US cent today after risk sentiment rose on equity market gains and a positive economic outlook from the governor of the Reserve Bank of Australia (RBA). At the local close, the dollar was trading at $US0.8427, up from Thursday's close of $US0.8384.

In Wellington trade, the New Zealand dollar rose as evidence that the economy is improving mounted and as the Australian dollar rose to an 11-month high. By 5 pm the NZ dollar was US 67.87 cents from US 67.28 cents at 5 pm yesterday. The high of US 68.26 cents was the highest since early October 2008.

The South Korean won ended at 1,239.2 won to the U.S. dollar, down 1.9 won from Thursday's close, as offshore dealers snapped up the greenback.

The Taiwan dollar strengthens further against the greenback. The Taiwan dollar gained against the US dollar as it was trading higher at NT$ 32.8860, up by NT$ 0.0120 from Thursday’s close of NT$32. 8980.

Coming back in equities, Asian share markets were mixed, supported by gains in U.S. stocks, though concerns about the outlook for U.S. consumption weighed on some sectors. Comments from Australia's central bank governor reinforced expectations for an economic recovery and helped the Australian and New Zealand stock markets.

In Japan, the shares market surged with benchmark indices touches 10-month high, with investor confidence furthers reinforced on better-than-expected earnings from Wal-Mart Stores and after Germany and France reported an unexpected economic growth in the second quarter. Shares of Hitachi Construction Machinery led the rally after Mitsubishi UFJ Securities raised rating for the machinery maker. At the closing bell, the Nikkei 225 Stock Average index surged 80.14 points, or 0.76%, to 10,597.33, while the broader Topix index added 5.16 points, 0.53%, to 973.57.

On the economic front, Board members of the Bank of Japan said that capital expenditure, which has already plummeted during the current global economic slowdown could fall further, minutes from the July 14 and 15 monetary policy meeting revealed today. At the meeting, the board voted unanimously to keep the overnight call rate unchanged at 0.10%. The central bank did not announce any new policy measures along with the monetary policy statement. The Ministry of Economy, Trade and Industry revealed that the index measuring tertiary industrial activity in Japan inched higher by a seasonally adjusted 0.1% to 96.1 points in June compared to the previous month.

In Mainland China, share market tumbled with benchmark indices slide six week closing low on broad based selling across the sector, as investors’ confidence turned fragile on concern this year’s rally has overvalued the prospects for earnings growth and the government will tighten its monetary policy in the second half of the year. At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, plummeted 93.59 points, or 2.98%, to 3,046.97, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, stumbled 2.8% to 3,344.46.

On the economic front, China's stamp duty revenue on stock trading soared 152.35% year on year to RMB 7.09 billion in July, due to the booming stock market, according to statistics released by the Ministry of Finance yesterday.

In Hong Kong, the benchmark index bounced back from morning low to close edge higher as a bout of profit booking and buying at lower prices witnessed across the board. The benchmark indices tumbled in the morning on tracking weak cues from Shanghai bourses on worries about liquidity crunch and lending squeeze as increased supply of shares amid new listings and rights issues.

The Hang Seng Index bounced 32.03 points, or 0.15%, to 20,893.33, while the Hang Seng China Enterprise dropped 0.35 point to 11,899.80. The Hong Kong benchmark Hang Seng Index has gained 517.62 points or 2.54%, while Hang Seng China Enterprises Index added 287.62 points or 2.48%, in the week ended Friday, 14 August 2009.

In Australia, the stock market continued their strong run for fifth consecutive day, on the back of a positive cues from Wall Street and European market and with support from firmer base metal and energy prices. The industrials and building related stocks were the star performers, meanwhile, energy and materials sector climbed up on a firmer metal and oil price. Top four banks continued the rally on an upbeat commentary from Reserve Bank Governor Glenn Stevens. Health care and telecom surged inline with the market rally.

At the closing bell, the benchmark S&P/ASX200 index added 25.1 points, or 0.57%, to 4,461, meanwhile the broader All Ordinaries raised 28.4 points, or 0.64%, to 4,465.1. The benchmark S&P/ASX200 index has gained 161.60 points or 3.76%, while the Broader All Ordinaries rose 162 points or 3.76%, in the week ended Friday, 14 August 2009.

In New Zealand, stock market ended the week in the positive region supported by gains on the US markets. The share market continued to maintain its winning spree for the thirds day in a row on Friday. The NZX50 advanced 0.71% or 22.41 points to 3151.26. The NZX 15 ascended 0.43 % or 25.07 points to close at 5796.26.

In South Korea, stocks finished 1.71% higher as large-capped bank and tech issues rose on solid foreign buying. The benchmark Korean Composite Stock Price Index (KOSPI) shot up 26.77 points to 1,591.41, the highest since 31 July 2008.

In Singapore, the stock market climbed up after opening higher, on the back of positive finish of European market and Wall Street overnight and firmer commodities market. Banks and properties led the rally on tacking US peers. Meanwhile buying pressure was evident in multi industries and construction shares. Noble Group outperformed on better than expected earning. At the closing bell, the blue chip Straits Times Index added 17.33 points, or 0.66%, to 2,631.51. The blue chip Straits Times Index has added 82.16 points or 3.22%, in the week ended Friday, 14 August 2009.

In Taiwan, stock market finished Friday at two weeks high, as construction and steel shares rose after a local newspaper said Taiwan's cabinet had decided to set aside a special budget of up to T$200 billion for reconstruction after Typhoon Morakot left a path of destruction as it swept over the island. The benchmark Taiex share index attained a new two-weeks high by adding 34.55 points or 0.49% in a day, closing the day at 7069.51, the highest closing since 31 July 2009

The Executive Yuan (the Cabinet) decided to appropriate a special budget of NT$100 billion at minimum and NT$200 billion at maximum to fund the rescue and reconstruction operations related to typhoon Morakot. The special budget will be based on the special reconstruction statute for the 7 August flood, which will be put forth in no time, and will boost the central government’s total budget outlay next year to over NT$2 trillion, a record high.

In Philippines, stock market closed the week marginally lower, as investor’s took cue from the performance of Wall Street overnight. US stocks closed Thursday trading with modest gains after US reported a 0.1-percent decline in retail sales in July. However optimistic economic data on the domestic front, acted as a helping hand for the composite index, which kept the PSEi only marginally lower. At the concluding bell, the benchmark index PSEi lost 0.21% or 6.05 points to 2,850.01, while the All Shares index escalated 0.27% or 4.96 points to 1,806.98.

In India, the key benchmark indices provisionally closed near the day's low on profit taking ahead of the weekend after yesterday's sharp rally. The BSE 30-share Sensex was down 106.86 points or 0.69% at 15,411.63. The S&P CNX Nifty was down 24.95 points or 0.54% to 4,580.05.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.20% or 2.38 points to 1188.57 while stock markets in Indonesia’s Jakarta Composite index ended the day lower at 2386.86.

In other regional market, European shares advanced on Friday, in what could be the third straight day of gains, as investors showed further confidence the economic backdrop will improve. On a regional level, the U.K. FTSE 100 index rose 0.7% to 4,788.60, the German DAX index rose 0.7% to 5,440.44 and the French CAC-40 index rose 0.7% to 3,550.76.