Asian markets accolades Asian Development Bank projection

Sensex, Seoul ends higher while Shanghai, Sydney finishes lower

Stock market in Asian region advanced on Tuesday, 22 September 2009, following the Asian Development Bank (ADB) report, which confirmed developing Asia resilience in the global downturn.

The Update to ADB’s flagship annual economic publication, Asian Development Outlook (ADO) 2009, released today, forecasts economic expansion in developing Asia to come in at 3.9% in 2009, up from the 3.4% expected in March when the ADO 2009 was released. In 2010, the growth projection is likewise upgraded to 6.4% from 6.0%. Stronger growth in East Asia and South Asia underpinned the improved prospects.

At the same investors were cautious ahead of the U.S. Federal Reserve two-day meeting starting later Tuesday, which will release a widely anticipated policy statement Wednesday. On Thursday and Friday, leaders from the Group of 20 nations will meet in Pittsburgh, and any comments on the global economy or financial regulation will be watched closely.

On Wall Street, the stock market closed mixed as commodities headed lower and the dollar strengthened, a day before the Federal Reserve's policy-making committee meets. The Dow Jones Industrial Average ended the session down 41.34 points, or 0.4% to 9778.86, while the S&P 500 declined 3.64 points or 0.3%, to 1064.66. The Nasdaq Composite added 4.75 points, or 0.24% to 2138.04. Economic data for the day was light with just the Conference Board's index of leading indicators, which increased just slightly less than expected, by 0.6%.

In the commodity market, crude oil rose for the first time in four days before a report forecast to show U.S. crude supplies contracting, while a weaker dollar boosted the investment appeal of commodities.

Crude oil for October delivery rose as much as 84 cents, or 1.2%, to $70.55 a barrel in electronic trading on the New York Mercantile Exchange. The contract, which expires today, was at $70.40 at 9:32 a.m. London time. The more widely traded November futures advanced 69 cents to $70.62.

Brent crude oil for November settlement rose as much as 80 cents, or 1.2%, to $69.49 a barrel on the London-based ICE Futures Europe exchange. It traded at $69.35 a barrel, up 66 cents, at 9:35 a.m. in London.

Gold increased, ending a three-day decline, as the dollar weakened against major global currencies, boosting the appeal of precious metals. Immediate-delivery gold was up 0.3% to $1,006.32 an ounce at 2 p.m. in Singapore. The metal touched $1,024.28 on Sept. 17, the highest since March 2008. December-delivery futures gained 0.3% to $1,007.50 an ounce on the New York Mercantile Exchange’s Comex division.

In the currency market, the U.S. dollar fell against the yen in Asia, giving up recent gains as equity markets in much of the region rallied on improved risk sentiment.

The Japanese yen strengthened against US Dollar. The Japanese yen was quoted at 91.3350 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 climbed almost a cent; helped by a relapse in the US currency and a big jump in commodity cousin the New Zealand dollar. At the local close, the dollar was trading at $US0.8719, from $US0.8627 yesterday, putting it back on track for a test of one-year highs of $US0.8776.

In Wellington trade, the New Zealand dollar rose sharply today on news of a raised Fonterra payout, which will be a boost for the economy as well as for dairy farmers. The NZ dollar jumped from around US70.62c to US71.42c on the news and was US71.65c by 5pm from US70.73c at the same time yesterday.

The South Korean won finished at 1,203.8 won against the U.S. dollar, up 0.6 won from Monday's close, as foreign investors snapped up local shares.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.3660, 0.0530 up from Monday’s close of NT$32.4190.

Coming back in equities, Asian shares closed mixed as markets remained relatively quiet with some investors turning cautious before the U.S. Federal Reserve's policy meeting as well as the G-20 summit this week.

Stock markets in Japan, Malaysia and Indonesia were closed for public holidays.

In Mainland China, share market tumbled in the last hour of trading after oscillating between in and out of boundary almost six times, on rekindled worries about liquidity squeeze in a market following dozen of IPO approval by Chinese regulator. Significant selling pressures in Energy sector weighed the most as brief fall overnight in crude oil prices, meanwhile materials shares also dragged the market, with heavyweight Baoshan Iron & Steel.

The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, dropped 69.46 points, or 2.34% to 2,897.55, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, stumbled 2.42%, to 3,131.02.

On the economic front, China, Asia's top gasoline seller, exported 518,551 tonnes of petrol last month, customs data showed on Tuesday, the highest level in nearly two and a half years. Exports of diesel were also high, at 395,140 tonnes, as Chinese refiners processed at near-peak rates to maximise a protected domestic profit margin. Imports of fuel oil rose 34.8% from a year earlier at 1.62 million tonnes, customs said.

In Hong Kong, the stock market surged supported by strong bargain hunting across the sector, buoyed by growth forecast upgrade for China, India, and other developing Asian countries by Asian Development Bank. Financials and properties outperformed in a market after an index of US leading economic indicators climbed for a fifth straight month in August and signaling a recovery is underway. Airline stocks and oil refiners rose on a brief fall overnight in crude oil prices. Energy stocks also gained after optimistic analyst reports Tuesday, which cited a healthy long-term outlook for oil prices and demand. Esprit Holdings benefited after HSBC Holdings upgraded the stock to “overweight”.

The Hang Seng Index surged 228.29 points, or 1.06%, to 21,701.14, while the Hang Seng China Enterprise added 93.21 points, or 0.75%, to 12,511.55.

In Australia, the shares market endured losses for third consecutive days, as weakness in major banks and property trusts. Energy and industrials materials stumbled by falls in metal and oil prices. Resources stocks retraced some early losses despite base fell on the London Metal Exchange Monday in response to a resurgent US dollar. At the closing bell, the benchmark S&P/ASX200 index stumbled 13.7 points, or 0.29%, to 4,663.7, meanwhile the broader All Ordinaries fell 13 points, or 0.28%, to 4,671.1.

On the economic front, the Australian Bureau of Agricultural and Resource Economy predicted stated commodity exports in Australia likely to rake in A$158.31 billion in the current fiscal year that started 1 July 2009.

In New Zealand, share markets were little changed as positive news about a higher Fonterra payout was countered by a rise in the NZ dollar. The benchmark NZSX-50 index closed down 12.79 points, or 0.41%, at 3142.862. The NZX 15 however, dipped down 17.21 points or 0.30% to close at 5748.68.

In South Korea, stocks made strong gains, pushing the benchmark index past the 1,700 mark to its highest level in 15 months, as more foreign investors dived into the market. The Korea Composite Stock Price Index (KOSPI) climbed 23.38 points, or 1.38%, to end at 1,718.88, the highest since 1,717.66 in 26 June 2008.

In Singapore, stock market spurted; aided by bargain hunting interest in a consolidating market after an index of US leading economic indicators climbed for a fifth straight month in August and the Asian Development Bank raised economic estimates for China, India, and the region. Shares of Jardine Strategic Holdings, United Overseas Bank and CapitaLand led the rally. Banks and properties were firmer. Commodities related stocks bounced on bottom fishing. Manufacturing and multi industries surged in line with market. The blue chip Straits Times Index was ended at 2,685.63, raised 37.72 points, or 1.42%.

In Taiwan, stock market touched losses for second straight session, with technology heavyweight Hon Hai leading the way, as investors stayed cautious before companies post their September sales. The benchmark Taiex share index continued to register losses in the second session of the third week of September as it finishing bluer by 33.43 points or 0.45% in a day, closing the day at 7469.03. The daily change was worst since 14 September 2009 when market gave up 80.19 points.

In Philippines, the stock market closed marginally lower, as investors became cautious following bleak economic prospects, which in turn led to selling of key heavy weight stocks. ADB has downscaled its previous 2.5% economic growth estimate for the Philippines this year on the back of weaker exports, imports, and domestic consumption. The country is likely to post a gross domestic product (GDP) growth of 1.6% this year as the economy performed worse than expected during the first half of 2009. The benchmark index declined 0.16% or 4.55 points to 2,784.78, while the All Shares index erased 0.55% or 9.99 points to 1,789.58.

In India, the key benchmark indices pared gains in late trade as index heavyweight Reliance Industries reversed early gains. However, firm European markets and surge in US index futures supported market. The BSE 30-share Sensex was up 145.13 points or 0.87% to 16,886.43. The Sensex rose 184.31 points at the day's high of 16,925.61 in mid-afternoon trade; it’s highest since 23 May 2008. The S&P CNX Nifty was up 44.15 points or 0.89% to 5020.20. It hit a high of 5030; it’s highest since 23 May 2008.

In other regional market, Europe stocks recovered much of what they lost in the prior session, with the broader market in a holding pattern as traders await news from the U.S. Federal Reserve on whether it will signal an exit strategy from loose monetary policy. The German DAX rose 1.3% or 73.95 points to 5,742, the U.K. FTSE 100 rose 0.9% or 45.32 points to 5,180 and the French CAC 40 climbed 0.9% or 34.71 points to 3,847.