Asian markets took turnaround on Tuesday

Sensex, Shanghai, Seoul, Sydney swing to gains while Hang Seng, NZX 50 finish lower

Stock markets in Asian region surged near one-year high on Tuesday, 15 September 2009, as investors looked past a trade spat between the United States and China, with exporter shares in Japan getting a lift as the yen's surge relented However, with investors choosing to take some profits at higher levels, most of the markets in the region have pared a substantial portion of their gains subsequently.

With a slew of economic reports due for release during the course of the next few days, investors appear a bit wary of holding positions at higher levels. Asian stock markets also got off to a firm start with the overnight positive close on Wall Street aiding sentiment in early trades.

On Wall Street, stocks advanced slightly Monday following President Obama’s Wall Street address, as observers acknowledged the need for regulation. The Dow Jones Industrial Average gained 21.39 points, or 0.2%, at 9617, while the S&P 500 advanced 6.54 points, or 0.6%, to 1049.27. The Nasdaq Composite edged up 10.88 points, or 0.5%, to 2091.78.

President Obama spoke at Federal Hall in New York, across the street from the New York Stock Exchange. The president discussed what he called the most ambitious overhaul of the financial regulatory system since the great Depression.

The president tried to recoup some confidence in the investors by saying that the storms of the last two years are beginning to break and the need for continuing need for government involvement to stabilize the financial system is waning.

In the commodity market, crude oil traded below $69 a barrel on speculation U.S. refiners may cut operating rates after fuel stockpiles reached a 26-year high.

Crude oil for October delivery was at $68.75 a barrel, down 11 cents, at 2:30 p.m. Singapore time in electronic trading on the New York Mercantile Exchange. Yesterday, the contract fell to $68.86, the lowest settlement since 4 September 2009.

Brent crude oil for October settlement on the London-based ICE Futures Europe exchange traded at $67.15 a barrel, down 29 cents, at 2:36 p.m. in Singapore. Yesterday, it fell 0.4% to settle at $67.44, the lowest in a week.

Gold, little changed in Asian trading, may climb as a weakness in the U.S. dollar causes investors to preserve their wealth. Gold for immediate delivery rose as much as 0.2% to $1,002.06 an ounce and traded at $999.38 at 2:02 p.m. in Singapore. The metal touched $1,011.95 on 11 September 2009, the highest level since March 2008.

In the currency market, US dollar remains soft ahead of a busy day but after all, there is no decisive momentum to resume recent down trend in the greenback yet. Tit came under heavy pressure this month as growing optimism about a global economic recovery encouraged investors to move out of safe havens into riskier investments. Aussie, on the other hand, trades with a mild undertone on less hawkish than expected RBA minutes.

The Japanese yen softened against major currencies. The Japanese yen was quoted at 90.87 against the US dollar and 133.24 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 drifted sideways on Tuesday after minutes from the Reserve Bank's last board meeting failed to shed more light on when it will start raising interest rates. The minutes highlighted the RBA is almost ready to start raising the cash rate from its emergency lows, but needed more evidence that the nascent recovery, both at home and abroad, will be sustained in coming months. At the local close, the dollar was trading at $US0.8609, off a session high of $US0.8641 but up from Monday's close of $US0.8571.

In Wellington trade, The New Zealand dollar was firm today around the US70c figure. Manufacturing sales volumes rose in the June quarter, but the value of sales fell as a result of lower prices, particularly for dairy products. The report from Statistics New Zealand was seen as neutral for the currency market. By 5pm today the NZ dollar was buying US70.14c, from US69.78c at 5pm yesterday.

Solid foreign stock buying boosted demand for the won, and global downturn of the dollar also bolstered the currency as the South Korean won ended at 1,218.5 won to the U.S. dollar, up 6.6 won from Monday's close.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.6220, 0.0460 up from Monday’s close of NT$32.6680.

In the Asia, regional markets ended mostly higher, with Japanese shares rebounding from the previous session’s tumble as overnight gains on Wall Street and a weaker yen spurred risk appetite. Key benchmark indices in South Korea, Singapore and Taiwan rose by 0.15% to 1.23%. Hong Kong's Hang Seng was down 0.31% after a late opening due to a typhoon warning.

In Japan, shares market finished the session in diverse note, as gains by exporters following yen eased against greenback and firmer defensive shares offset steep losses in major banks and shipping companies. Banks and financials dropped as investors banked profit amid concern recent rally was overdone, while steel makers and other metal producers suffered from the fall in commodity prices. Weaker copper and oil prices weighed on the miners and energy companies. At the closing bell, the Nikkei 225 Stock Average index added 15.56 points, or 0.15%, to 10,217.62, meanwhile the broader Topix was down 1.53 points, or 0.16%, to 932.52.

In Mainland China, stocks rallied, helped by data showing an increase in foreign direct investment in August for the first time in 11 months. Materials stocks outperformed as copper prices gained in Shanghai Energy sector surged with gains from major refiners and power producers. Tyre makers recouped most of yesterday losses after China said the impact of US tariff on imported tires would be limited. Airlines and Biopharmaceutical companies were among the winners

The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, surged 6.99 points, or 0.23% to 3,033.73, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, advanced 0.28%, to 3,302.64.

On the economic front, the government said that foreign direct investment in China climbed for the first time in 11 months in August. Investment rose 7% from a year earlier to $7.5 billion, compared with a 35.7% drop in July. Foreign investment in the first eight months fell 17.5%.

In Hong Kong, markets were closed for the morning session due to a typhoon warning, and opened only for a 90-minute trading session in the afternoon. The market participants indulging in some heavy profit taking in the shortened trading session, following lack of cues from Shanghai bourses and pullback in metal and oil prices. Investors sentiment also hurt by China trade dispute with the US. The Hang Seng Index dropped 65.83 points, or 0.31%, to 20,866.37, while the Hang Seng China Enterprise shed 1.02 points, or 0.01%, to 12,156.07.

In Australia, the shares market settled above the line, despite opening 1% higher on the back of a positive lead from Wall Street. Materials and resources spurted as mining stocks shrug off weaker metals prices. Major gold stocks were mixed as spot gold prices fell below $1,000 an ounce in Asian trade. Energy stocks were mixed after the price of crude finished edged lower overnight.

At the closing bell, the benchmark S&P/ASX200 index surged 9.20 points, or 0.2%, to 4,540.30, meanwhile the broader All Ordinaries added 11.1 points, or 0.24%, to 4,547.2.

On the economic front, the release of the minutes of the Reserve Bank of Australia’s September board meeting on today suggested the central bank was not in a hurry to lift interest rates anytime soon. At the board meeting, the RBA kept the cash rate at 3% for the fifth consecutive month.

The Australian Bureau of Statistics said Australian dwelling commencements in the June quarter fell by 3.7% to 30,411 units, seasonally adjusted, from an upwardly revised 31,566 units in the March quarter.

In New Zealand, the stock market extended its losing spree following not very high gains on Wall Street overnight. The benchmark index fell for the second day in a row. The New Zealand share market was lower in early trade, following on from yesterday's small decline to start the week. The NZX50 lost 0.93% or 29.05 points to 3099.63. The NZX 15 decreased 1% or 57.41 points to close at 5682.71.

On the economic front, New Zealand’s manufacturing activity after adjusting for seasonal effects rose in the June 2009 quarter, Statistics New Zealand said on Tuesday. However, as a result of lower prices, the value of sales fell. The volume of manufacturing sales rose 1.8% in the June 2009 quarter. This follows a flat March 2009 quarter and falls totaling 9.3% during 2008. The main contributor to the latest rise was the meat and dairy product manufacturing industry, which rose 7.4% in sales volume. The trend for the volume of manufacturing sales is flat for the June 2009 quarter, after five quarters of decline. The trend for the sales value shows a decline for the latest two quarters.

In South Korea, stock market rallied to a yearly high, boosted by gains in steel makers and financial shares. The benchmark Korea Composite Stock Price Index (KOSPI) advanced 18.49 points to a new yearly high at 1,653.4.

In Singapore, stock market finished the choppy session edged lower, as investors banked morning gains owing to weak triggers from the European market and pullback in commodities and oil prices. Properties stocks drag the most after private home sales fell 39% in August. Manufacturing and multi industries were under pressure after retail sales declined by a seasonally adjusted 1.6% in July. The blue chip Straits Times Index ended at 2,638.40, down 1.34 points, or 0.05%.

On the economic front, the Statistics Department of Singapore said that the retail sales index dropped 9.8% from a year earlier after sliding a revised 8.4% in June as purchases of motor vehicles slumped and automobile owners spent less at gas stations. Retail sales declined by a seasonally adjusted 1.6% in July from June

The Urban Redevelopment Authority’s of Singapore said in a statement that country private home sales fell 39% in August from the previous month after developers offered fewer new units. Sales declined to 1,699 in August from the 2,767 units in July.

In Taiwan, stock market regained its fourteen-month high status as Personal Computer makers rose on hopes that the launch of Microsoft's Windows 7 operating system would boost computers demand. The benchmark Taiex share index continued to swing between gains and losses as it regained its fourteen month high by finishing the session higher by 89.31 points or 1.23% in a day, closing the day at 7346.26, reclaiming its fourteen month high status by showing the closing not seen from 24 July 2008 when market closed at 7368.08.

On the economic front, Taiwan’s exports posted a sharp annual drop of 32.8% in the first seven months of this year, the largest fall among the Four Little Dragons in Asia.

According to the Cabinet-level Directorate General of Budget, Accounting & Statistics (DGBAS), in the same period, Singapore saw its exports shrank by 31% and Hong Kong down by 17.2%; while South Korea and China each saw the corresponding percentage stand at -22%. The United States, although severely impacted by the financial tsunami, recorded a drop of 24% in exports during the period, but Japan, Germany and U.K. all presented approximately the same percentage as Taiwan’s.

In India, the key benchmark indices extended gains to hit a fresh intraday high in late trade. Banks were leading stocks higher a day after a Reserve Bank of India official said the central bank will consider increasing the limit of banks' bond purchases in a category that need not be marked-to-market prices. The two key indices - the Sensex and the S&P CNX Nifty today hit their highest level in more than 15 months.

The BSE 30-share Sensex ended up 240.26 points or 1.48% to 16,454.45. The Sensex rose 262.94 points the day's high of 16,477.23 in late trade, it’s highest since 2 June 2008. The barometer index rose 41.23 points at the day's low of 16,255.42 in early trade. The S&P CNX Nifty closed up 83.50 points or 1.74% to 4892.10. It hit a high of 4899.45 in late trade; it’s highest since 2 June 2008.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.34% or 4.11 points to 1207.47 while stock markets in Indonesia’s Jakarta Composite index ended the day higher at 2420.11.

In other regional market, European shares edged lower after a disappointing sentiment reading from Germany, with autos and financials under notable pressure. On a regional level, the U.K. FTSE 100 index slipped 0.3% to 5,003.80, the German DAX index declined 0.4% to 5,596.92 while the French CAC-40 index traded flat at 3,730.78.