Asian markets brightens on renewed recovery hopes

Hang Seng, Shanghai, Nikkei; NZX 50 gain more than 1%, while Sensex, Taiex follows

Stock market in Asian region finished at hit their highest level in 13 months on Thursday, 17 September 2009, on signs the global economic recovery could be strengthening, while the US dollar slid to a fresh one-year low as investor optimism eroded its safe haven appeal.

On Wall Street, stocks extended gains following better-than-expected manufacturing data and a second day of positive vibes from Federal Reserve Chairman Ben Bernanke’s remarks. The Dow Jones Industrial Average was up 108.3 points, or 1.1%, to 9791.71, while the S&P 500 ticked up 16.13 points, or 1.5%, to 1068.76. The Nasdaq Composite advanced 30.51 points, or 1.5%, to 2133.15.

On the economic front, industrial production and capacity utilization both increased more than expected in August. Production ramped up by 0.8%, while capacity utilization rose to 69.9%. Both measures also were upwardly revised for July. Meanwhile, the Department of Labor said the consumer price index, the most widely cited gauge of inflation, increased by 0.4%, or 0.1% excluding food and energy.

In the commodity market, crude oil traded little changed near $72 a barrel in New York after the Energy Department reported that U.S. crude stockpiles dropped to the lowest level since January.

Crude oil for October delivery was at $72.55 a barrel, up 4 cents, in electronic trading on the New York Mercantile Exchange at 9:23 a.m. in London. Yesterday, the contract rose $1.58, or 2.2 percent, to $72.51.

Brent crude oil for November settlement was at $71.64 a barrel, down 3 cents, on the London-based ICE Futures Europe exchange at 9:23 a.m. London time. Yesterday, the contract jumped 2.6 percent to $71.67, the highest since Aug. 28.

Gold advanced for the third day as signs of a recovering global economy spurred demand for precious metals as a hedge against rising inflation. Immediate-delivery bullion advanced as much as $6.98, or 0.7%, to $1,024.28 an ounce, rising for a third day. The metal traded at $1,021.89 by 9:30 a.m. local time. December gold futures were 0.3% higher at $1,023.10 an ounce on the New York Mercantile Exchange’s Comex division.

In the currency market, US dollar’s fall continues today as trends in the overall financial markets extend. Among the major currencies, Aussie, was the strongest against the greenback and the up trend in theses currencies are still in favor to continue in near term.

The Japanese yen softened against major currencies. The Japanese yen was quoted at 910.3 against the US dollar and 133.90 against euro.

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 closed at a 13-month high on Thursday after positive US economic data sparked fresh hopes of a global economic recovery. At the local close, the currency was trading at $US0.8764, up from Wednesday's close of $US0.8669. It was the highest close for the Australian currency since August 21, 2008, when it ended the domestic session at $0.8804.

In Wellington trade, the New Zealand dollar powered to a 13-month high against the greenback, briefly topping US71.50c, as global risk appetites improved. By 5pm today the NZ dollar was buying US71.35c from US70.57c at the same time yesterday. The high in the domestic session was US71.55c, near the peak in overnight trading of US71.57, which was the best since August last year.

The South Korean won ended at 1,204.8 won to the U.S. dollar, up 6.5 won from Wednesday's close. The unit rose to the strongest level in more than 11 months as foreigner's demand for the won rose amid bullish stock markets and a weak U.S dollar.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.3400, 0.1520 up from Wednesday’s close of NT$32.4920.

In the region, equity markets ended broadly higher as investors snapped up shares of commodity producers and airlines on hopes the global economic recovery is gaining steam.

In Japan, shares market spurted with most of sector contributed into rally on optimism that global growth will recover more quickly than expected after upbeat US industrial production data and strong gains in commodity prices. At the closing bell, the Nikkei 225 Stock Average index added 173.03 points, or 1.68%, to 10,443.80, while the broader Topix gained 8.09 points, or 0.87%, to 939.52.

On the economic front, the Ministry of Finance said today in its quarterly business outlook survey that Business conditions in Japan improved markedly in the third quarter of Japan's fiscal year. The Ministry of Economy, Trade and Industry said today that an index measuring the activity of tertiary industrial activity in Japan was up 0.6% in July compared to the previous month, to a score of seasonally adjusted 96.7 points. The Bank of Japan concluded its two-day monetary policy meeting with decision to hold interest rates at a record low of 0.10% and raised its economic assessment.

In Mainland China, share market spurted with broad based gains across the sectors. Materials and energy sector outperformed as metal and oil prices bounced after the latest US data reinforced views that global recovery was taking hold. Gold miners were boosted by strong bullion prices. Financials were uplift by gains from major banks and brokerages firms. The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, surged 60.55 points, or 2.02% to 3,060.26, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, spurted 1.9%, to 3,320.10.

In Hong Kong, stock market endured gains for second consecutive days, buoyed by sharp gains on Wall Street after upbeat US industrial production data and higher commodity prices, reinforced hopes that the global economic recovery was strengthening. Financials and properties led the rally as strong economic data in the United States reinforced hopes of turnaround in the global economy. Exporters gained ground following the robust US monthly retail sales figures. Esprit Holding jumped on rating upgrade by brokerage firms. The Hang Seng Index spurted 365.59 points, or 1.71%, to 21,768.51, while the Hang Seng China Enterprise surged 142.53 points, or 1.14%, to 12,668.25.

In Australia, shares market has continued its strong momentum, closing up with benchmark indices hit fresh eleven month high on the back of solid gains across the sectors, buoyed by positive global cues and firmer commodities prices. Miners and industrials fronting sharp gains as hopes for a sustained recovery in the global economy appeared to gather pace. At the closing bell, the benchmark S&P/ASX200 index surged 64.5 points, or 1.39%, to 4,714.90, meanwhile the broader All Ordinaries added 61.2 points, or 1.32%, to 4,714.

In New Zealand, stock market ended with decent gains registering a second consecutive day of gains in a row. The New Zealand share market had a robust start to the day amid a global lift in stocks as fresh data in the United States spurred optimism about an economic recovery. The gains in this country come despite a 1c fall to 267 by top stock Telecom. The NZX50 increased 1.12% or 35.465 points to 3153.05. The NZX 15 advanced 1.47% or 84.91 points to close at 5790.57.

On the economic front, New Zealand’s manufacturing industry contraction deepened last month, led by a drop-off in production, suggesting the sector still has a hurdle to clear inventory levels as the economy emerges from recession. The BNZ Capital-Business NZ Performance of Manufacturing Index fell 0.9 points to 48.7 in August, extending the period of contraction to 16 months. Four of the five main seasonally adjusted diffusion indexes in the PMI shrank.

In South Korea, stocks rallied to a 15-month high, lifted by powerful foreign buying. The benchmark Korea Composite Stock Price Index (KOSPI) climbed 12.14 points, or 0.72%, to end at 1,695.47, the highest since 1,717.66 in 26 June 2008. After opening above the 1,700-mark for the first time in 15 months, the KOSPI pared some of its gains in late trading as institutional investors reduced buying.

In Singapore, stock market finished the session edged lower, pared back morning gains in the last trading hour, with steep plunge in properties stocks offset gains from banks and major blue chips stocks. The blue chip Straits Times Index was ended at 2,672.60, eased 1.82 points, or 0.07%.

In Taiwan, stock market continued to hover around its fourteen high status, as Taiwan Mobile announced the acquisition of Kbro Company, Taiwan’s second largest cable-TV operator, at NT$56.8 billion, thereby boosting its share in the local cable-TV market to one third, the largest.

The benchmark Taiex share index consolidated gains as it finished the session higher by 37.06 points or 0.50% in a day, closing the day at 7477.30, achieving a new fourteen and half month high status by showing the closing not seen from 30 June 2008 when market closed at 7523.54.

In Philippines, stock market rallied for the first time in the week, closing higher, following optimistic investor’s sentiment, as fears of a deepening global economic downturn faded away, following positive economic prospects both on domestic and global front. At the final bell the benchmark index PSEi ascended 0.12% or 3.36 points to 2,771.97, while the All Shares index augmented 0.46% or 8.31 points to 1,787.09.

In India, the key benchmark indices cut strong intraday gains and closed with small advance in a volatile trading session. Index heavyweight Reliance Industries (RIL) slumped as the firm sold a part of its own shares held in a trust to raise funds.

The BSE 30-share Sensex closed up 34.07 points or 0.20% to 16,711.11. The Sensex rose 142.98 points the day's high of 16,820.02 in mid-morning trade, its highest since 23 May 2008. The barometer index fell 40.49 points at the day's low of 16,636.55 in afternoon trade.

The 50-unit S&P CNX Nifty hit the psychological 5,000 mark first time since 23 May 2008 in mid-morning trade but fell below that level later. The S&P CNX Nifty was up 7.15 points or 0.14% to 4965.55. It hit a high of 5003.05 in mid-morning trade, its highest since 23 May 2008.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.48% or 5.82 points to 1218.80 while stock markets in Indonesia’s Jakarta Composite index ended the day higher at 2445.99.

In other regional market, European shares rose for third straight session and the tenth time in eleven days, with stocks that stand to benefit the most from an improving economic backdrop leading a broad-based advance. On a regional level, the U.K. FTSE 100 index rose 0.8% to 5,165.71, the German DAX index climbed 0.6% to 5,734.23 and the French CAC-40 index rose 0.6% to 3,837.04.