Asian markets swing back to gains

Hang Seng, Taiex, Sydney, Sensex stand out with gains while Shanghai last lower

Stock market in Asian region rose on Tuesday 29 September 2009, as news of several multi-billion dollar takeovers bids overseas boosted confidence in global economic recovery, while the yen dipped after Tokyo refused to rule out currency intervention. The yen's retreat from an eight-month high hit on Monday helped Japanese exporters, lifting the Nikkei average by 1%.

On Wall Street, stock markets cheered deal developments and a Cisco upgrade on Monday, while upcoming economic data could pave the way for another volatile week. Technology stocks got a boost as Xerox said it agreed to buy Affiliated Computer Services for $6.4 billion in cash and stock. Affiliated Computer Services surged 14% to $53.86, but Xerox shares slid 14.4% to $7.68. The Dow Jones Industrial Average rose 124.17 points, or 1.3%, to 9789.36, while the S&P 500 ticked up 18.6 points, or 1.8%, to 1062.98. The Nasdaq Composite advanced 39.82 points, or 1.9%, to 2130.74.

In the commodity market, crude oil traded near $67 a barrel in New York, after rising in the past two days; on optimism fuel demand will increase amid improved prospects for an economic recovery in the U.S., the world’s biggest energy consumer.

Crude oil for November delivery traded at $66.89 a barrel, up 5 cents, in electronic trading on the New York Mercantile Exchange at 2:53 p.m. Singapore time. Yesterday, the contract rose 82 cents, or 1.2%, to settle at $66.84 a barrel.

Brent crude oil for November settlement traded at $65.60 a barrel, up 6 cents, on the London-based ICE Futures Europe exchange at 2:54 p.m. in Singapore. Yesterday, the contract gained 43 cents, or 0.7%, to settle at $65.54 a barrel.

Gold, little changed in London today, may decline as a strengthening dollar cuts demand for the metal as an alternative investment. Immediate-delivery bullion added $2.16, or 0.2%, to $993.21 an ounce by 10:04 a.m. local time. December gold futures were 30 cents higher at $994.40 an ounce on the New York Mercantile Exchange’s Comex division.

In the currency market, US Dollar was trading slightly softer in today’s trading.

The Japanese yen continue to retreat after Japan Finance Minister Hirohisa Fujii reversed his rhetoric about strong yen policy and as Asian stocks rebound following strength in US equities. Fujii claimed he never said I would leave the yen to strengthen, insisting that he was misinterpreted as supporting a strong yen policy. Fujii then emphasized if the currency market moves abnormally, we may take necessary steps in the national interest, raising speculations that Japan may intervene to curb the currencies' recent sharp gain. The Japanese yen was quoted at 89.91 against the US dollar, up from 89.56 yen in late trading Monday.

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 jumped over a cent while bill and bond futures were hammered after talk that local interest rate hikes may be raised in November and December resurfaced once more.

The Australian dollar spiked after central bank watcher Terry McCrann wrote the RBA is almost certain to hike rates by 25 basis points each in November and December. He offered no sources, but still the market drove the Aussie up to a local close of $US0.8758, from yesterday’s $US0.8643.

In Wellington trade, the New Zealand dollar found support against a handful of major currencies, was choppy against the greenback. Against the US dollar, the kiwi was up nearly a third of a cent early today to US71.63c from US71.33c yesterday.

The South Korean currency ended at 1,185.9 won against the dollar, down 10 won from Monday's close.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.3760, 0.0990 up from Monday’s close of NT$32.4750.

In the Asian equity market, technology and automobile stocks paced a broad rebound in the regional markets, encouraged by strong overnight gains on Wall Street and expectations of improving global demand.

In Japan, the shares market advanced by snapping two days loosing streak, on the back of positive lead from Wall Street overnight and generally softer yen, although gains in the overall market were capped amid concern falling consumer prices will cut corporate revenue and hamper the nation’s recovery from recession. At the closing bell, the Nikkei 225 Stock Average index surged 90.68 points or 0.91%, to 10,100.20, while the broader Topix spurted 1.16 points, or 0.13%, to 904.

On the economic front, the statistics bureau said Japan’s consumer prices excluding fresh food fell at a record 2.4% in August from a year earlier.

In Mainland China, share market finished the session lower enduring losses for third consecutive day in light trade after oscillating above and below the boundary at least 3 times amid persistent worries about the prospects of continue heavy supplies of new shares after an eight-day National Day holiday that starts on 1 October 2009. The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, stumbled 8.98 points, or 0.33%, to 2,754.54, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, edged down 0.01%, to 2,972.29.

In Hong Kong, the stock market snapped out four session of losing streak, with broad based gains across the sector following a strong lead from Wall Street overnight and other Asian bourses. Financials, properties, and telecom stocks outperformed as investors scooped up shares of oversold stocks after big corporate takeovers in the US gave investors a new shot of confidence. Materials and resources gained, helped by rebound in metals prices. The Hang Seng Index surged 424.76 points, or 2.06%, to 21,013.17, while the Hang Seng China Enterprise spurted 235.72 points, or 2.01%, to 11,988.37.

In Australia, the shares market posting solid gains on the back of positive cues from Wall Street overnight and generally firmer commodity prices. Banks and financials stocks outperformed, after a burst of merger and acquisitions activity in the US fuelled investor optimism. Properties stocks benefited amid optimism that an economic recovery would spur demand. Stronger metals prices snapped up shares of Anglo-Australian miners BHP Billiton and Rio Tinto, meanwhile Woodside Petroleum and Oil Search surged due rebound in crude oil prices. Optimism about the economy helped lift the retail sector.

At the closing bell, the benchmark S&P/ASX200 index surged 75.7 points, or 1.62%, to 4,753.1, meanwhile the broader All Ordinaries spurted 70.3 points, or 1.5%, to 4,747.2.

On the economic front, the strength of the Australian economy was underlined by the Federal Government, which reported a deficit of A$27.1 billion for the 2008-09 year against preliminary forecast of A$32.1 billion in the May Federal Budget.

In New Zealand, stock market extended its positive journey for the second day in a row. The share market rose in line with most of the Asian markets. Asian shares pulled higher Tuesday, on the back of Wall Street's gains. In the US stocks rallied yesterday, snapping a three-day losing streak, as a spurt of corporate takeovers in the technology and health-care sectors fuelled optimism about share values. The NZX50 increased 0.77% or 24.21 points to 3155.39. The NZX 15 was up 0.55% or 31.83 points to close at 5792.81.

On the economic front, according to credit reporting agency Dun & Bradstreet (D&B), New Zealand economy is better placed than many but is still at the mercy of an uncertain global economic recovery. Its quarterly Global Economic & Risk Outlook Report said a sustained improvement in the global economic outlook was not yet a certainty. However, the local outlook was more promising, particularly on the back of June quarter GDP figures showing the economy grew by 0.1 percent, the first expansion in six quarters.

In South Korea, stocks finished higher as institutional investors picked up banks and technology stocks following the overnight gains in U.S. markets. The benchmark Korea Composite Stock Price Index (KOSPI) rose 14.5 points or 0.87% to 1,690.05.

In Singapore, stock market buoyed by optimism over the US economy after triple digit gains in Wall Street overnight as a spurt of corporate takeovers in the technology and health-care sectors and positive session in the other Asian bourses. Major banks stocks outperformed, with DBS and OCBC leading the rally following sharp overnight gains on Wall Street. Properties sector benefited from strong gains from the shares of City Developments and CapitaLand. The blue chip Straits Times Index was ended at 2,663.31, gained 34.06 points, or 1.3%.

In Taiwan, stock market traveled to one week high, posting biggest single day gain since the beginning of the month of September, helped by Taiwan Semiconductor Manufacturing Company, after the government said it would allow contract chipmakers and flat-panel companies to acquire rivals in China. The benchmark Taiex share index swirl higher as it finished higher by 145.37 points or 2% in a day, closing the day at 7429.98, logging its biggest single day gain since 1 September 2009 and highest closing level since 22 September 2009.

On the economic front, there were series events happened over the weekend. Taiwan’s unemployment rate shot up to 6.13% in August for an unemployed population of some 672,000 persons, both the highest of their kinds. According to the Cabinet-level Directorate General of Budget, Accounting & Statistics (DGBAS), the number of employed in Taiwan reached 10.285 million, edging up by 27,000 or 0.26% from a month earlier, for the fifth consecutive monthly rise.

On the other hand, Taiwan’s consumer confidence in September rose to its highest level in 15 months, another indication that the Taiwan’s economy may be pulling out of a prolonged slump set off by the global economic crunch.

According to the results of the monthly survey released Monday by National Central University's Research Center for Taiwan's Economic Development (RCTED), the consumer confidence index for September stood at 56.45, up 3.45 points from the August level and the highest since July 2008.

In other news, the export orders received by Taiwan’s manufacturers and traders reached US$28.29 billion in August, declining by US$3.84 billion or 11.96% from that of last year; however, orders from China (including Hong Kong) rose to US$8.55 billion for an annual growth of 7.27%, the highest in 14 months.

In India, data showing a surge in growth in the core sector boosted domestic bourses with the 50-unit S&P CNX Nifty settling above the psychological 5,000 level. The market breadth was strong. The BSE 30-share Sensex was up 159.91 points or 0.96% to 16,852.91. The S&P CNX Nifty was up 47.90 points or 0.97 % to 5,006.85. It hit a high of 5,020.25.

On the economic front, the index of six core industries having a combined weight of 26.7% in the index of industrial production (IIP) registered a growth of 7.1% in August 2009 compared to a growth of 2.1% in August 2008. During April-August 2009-10, six core industries registered a growth of 4.8% as against 3.3% during the corresponding period of the previous year. Coal and cement sector boosted overall growth in the six infrastructure industries in August 2009.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.19% or 2.26 points to 1208.21 while stock markets in Indonesia’s Jakarta Composite index ended the day higher at 2443.83.

In other regional market, European shares were in a tight range, with gains for banks working to limit downside, as investors took a breather after pushing shares sharply higher in the previous session. On a regional level, the French CAC-40 index fell 0.48% or 18.38 points to 3,807 and the U.K. FTSE 100 index also lost 0.41% or 21.06 points to trade at 5,145. The German DAX index declined 0.58% or 33.36 points to 5,703.