Asian Markets witness Tuesday twilight Tuesday

Sydney, Sensex, Shanghai advance further while NZX 50 bucks regional trend

Stock markets in Asian region touched their highest level in a year on Tuesday 8 September 2009, while gold futures hit $US1000 an ounce for the first time in six months on investor concerns about the sustainability of the global economic recovery. With no direction from US markets due to Monday's Labor Day holiday, it was a mixed start for Asian markets, with Australian shares climbing as a flurry of deals lifted hopes for a pick-up in merger activity, while Shanghai stocks were dampened by profit-taking.

On Wall Street, the stock markets were closed on the account of Labor Day.

In the commodity market, crude oil traded little changed near $68 a barrel in New York on speculation that OPEC will keep output unchanged as the end of the U.S. driving season cuts gasoline demand.

Crude oil for October traded at $68.39 a barrel, up 37 cents from the 4 September 2009 close, in after-hours electronic trading on the New York Mercantile Exchange at 1:18 p.m. Singapore time.

Brent crude oil for October settlement rose as much as 61 cents, or 0.9%, to $67.14 a barrel on the London-based ICE Futures exchange. It was at $67.12 a barrel at 1:29 p.m. Singapore time.

Gold futures climbed to $1,000 an ounce for the first time in more than six months as a weaker dollar and concern that inflation may accelerate boosted the precious metal’s appeal. Gold last traded at more than $1,000 on 20 February 2009, the first time the metal had breached that price since March 2008. Futures then retreated to as low as $865 on 6 April 2009. The December contract added 0.1% to $998.20 an ounce in New York at 10:53 a.m. in Singapore. Spot gold traded at $996.59.

In the currency market, US dollar weakens sharply today on the back of exceptional strength in precious metals. Gold future break 1007.1 psychological level in Asia today and reaches as high as 1006.4 so far. Meanwhile Silver future also climbs more than 3% to as high as 16.85. The greenback continues to make new low against Aussie and Kiwi.

The Japanese yen strengthened against major currencies. The Japanese yen was quoted at 92.92 against the US dollar against Monday’s close of 93.22 yen.

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 hit a one-year high as a host of factors, including Asian stocks at a one-year high, a jump in gold and widening yield spreads all combined to fuel its recent rally. At the local close, the dollar was buying $US0.8592, up from yesterday’s close of $US0.8518, though trade remained thin. It was subdued against the yen at 79.47, compared to Monday's 79.35, as the Japanese currency also gained on the US dollar.

In Wellington trade, the New Zealand dollar reached one-year highs against the greenback and euro as it finally managed to push through the US69c level. The kiwi climbed as high as US69.35c overnight in a session affected by the Labor Day holiday in the United States. In the past fortnight the NZ dollar has pushed above US68.90c several times but failed to jump the next hurdle.

The South Korea won closed at 1,233.2 won to the greenback, up 0.3 won from Monday's close, as offshore investors continued to buy local stocks.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.7730, 0.0920 higher from Monday’s close of NT$32.8650.

Coming back in equities, Australian shares were among the winners in Asia Tuesday, buoyed by a jump in business confidence to its highest level since October 2003, and as resource stocks cheered gold's long-anticipated move above $1,000 an ounce. Stocks in Taiwan received a boost from a cabinet re-shuffle on Monday, amid mounting criticism of the government's response to Typhoon Morakot.

In Japan, shares market recouped morning losses to finish the session higher, supported by strong performance in Shanghai market and strong overnight leads from Europe and the UK. Investors encouraged for buying on hopes recent plunge makes stock valuation attractive and on speculation an improved business outlook will prompt companies to lift their earnings forecasts.

At the closing bell, the Nikkei 225 Stock Average index rose 72.29 points, or 0.7% to 10,393.23, meanwhile the broader Topix was up 1.80 points, or 0.19%, to 946.4.

On the economic front, the Finance Ministry said that Japan’s current account surplus narrowed 19.4% in July from the same month a year before to 1.27 trillion yen. The decline came as Japan received fewer payments for patents. As a result, the country’s deficit in the service account, including payments in transport, tourism and royalties, expanded 28.9 per cent to 288.3 billion yen.

In Mainland China, share market endured gains for sixth consecutive day. Financials and properties spurted on hopes that Beijing will continue to use policy to support asset prices. Automakers rose on expectations of strong sales for August. Materials and resources shares were firmer on the back of strong movement in metals prices, meanwhile gold miners showed strength as the price of the metal hit the $1000 mark in Asian trade. Sugar makers buoyed up on better than expected sale data. Tyre makers bounced on speculation surge in car sale will perk up demand for tyres.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, rose by 49.36 points, or 1.71% to 2,930.48, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, advanced 2.15%, to 3,170.97.

In Hong Kong, benchmark index endured gains for fourth consecutive day, benefited by strong performance from major heavyweights as China said it will sell sovereign bonds in the city and as a pledge by the world’s 20 biggest economies to underwrite the global recovery with massive stimulus efforts. The Hang Seng Index surged 440.50 points, or 2.14%, to 21,069.81, while the Hang Seng China Enterprise added 296.51 points, or 2.48%, to 12,275.66.

In Australia, the shares market surged following a positive close of European and the UK market and commodities prices and news business confidence had reached a near six-year high. Banks and financials and properties shares were in favor on improved prospects for the global economy. Materials and resources shares were firmer on the back of strong movement in metals prices and the release of merger and takeover news, meanwhile gold miners showed strength as the price of the metal touches the $1000 mark in Asian trade.

At the closing bell, the benchmark S&P/ASX200 index rose 69.4 points, or 1.56%, to 4,523.8, meanwhile the broader All Ordinaries gained 66.7 points, or 1.5%, to 4,527.8.

On the economic front, the National Australia Bank said on Tuesday in its monthly survey report that Australia business confidence climbed by 8 points to a score of 18 in August, supported by gains among several key sub-indexes including personal services, retail, manufacturing and finance

In New Zealand, stock market inched down to end to end in the negative terrain. The share market ended its three-day winning streak. The New Zealand share market made modest gains in early trade, after firm rises in Europe and Asia. The NZX50 edged down 0.04% or 1.14 points to 3121.55. The NZX 15 decreased 0.63% or 31.20 points to close at 5734.73.

On the economic front, New Zealand’s treasury in its monthly economic indicators, said there were signs the housing market and the wider economy was beginning to grow again and that unemployment would not reach 8 percent as earlier predicted. Despite the slightly more optimistic outlook, Treasury warned the return to economic growth might not be sustainable.

Meanwhile, according to a survey, business confidence in the country is racing up while about a third of New Zealanders think the worst of the recession is over. Bank of New Zealand's monthly survey shows a net 56 per cent of firms felt the economy would improve in the year ahead. That was up from just 15 per cent in July.

In South Korea, shares finished higher, led by gains in tech shares. The benchmark Korea Composite Stock Price Index (KOSPI) advanced 11.12 points to 1,619.69.

In Singapore, stock market bounced back from morning low, supported by strong performance in Shanghai market, which encouraged investors for dip buying. Major blue chips, banks, and properties led the rally in Strait index. The blue chip Straits Times Index advanced 16.96 points or 0.64%, to 2,660.91.

In Taiwan, stock market elevated for eighth session, as Premier-designate Wu Den-yih said in that the new Cabinet will take shape Thursday. Premier Liu Chao-shiuan announced a day earlier that he and his Cabinet will resign en masse to give President Ma Ying-jeou a free hand to form a new Cabinet.

The benchmark Taiex share index elongated its winning streak in eighth session as its finished the session higher by 89.40 points or 1.24% in a day, closing the day at 7313.99, highest closing since 14 August 2008 when market closed at 7326.07.

The market spurted after Taiwan’s exports hit a 10-month high in August, an indication that the export-dependent economy is gradually recovering after suffering a deep slump because of reduced global demand for Taiwan's computer and electronics products.

Taiwan exported US$19.01 billion worth of goods in August, about 10% higher than in July but 24.6% less than in August 2008, when the country set a record monthly high for exports at US$25.2 billion.

The 24.6% year-on-year decline, though high, was the second smallest monthly contraction over the past nine months, and if exports continue to rise to US$20 billion in September, trade will have recovered to normal levels, said Chen Tain-jy, chairman of the Cabinet-level Council for Economic Planning and Development.

In Philippines, the stock market opened the week on a positive note, closing almost 1% higher, following encouraging news overseas, which in turn led to the buying of key heavy weight stocks. Moreover, positive show of strength by the key heavy weight also assisted the PSEi to scale up. At the final bell, the benchmark index PSEi ascended 0.75% or 21.49 points to 2,852.48, while the All Shares index mounted 0.69% or 12.58 points to 1,816.89.

In India, profit booking in auto and select FMCG shares pulled the key benchmark indices off 15-month highs. The BSE 30-share Sensex was up 107.35 points or 0.67% to 16,123.67. The Sensex opened 14.24 points higher at 16,030.56, also its day's low so far in the day. The barometer index gained 215.84 points at the day's high of 16,232.16 in mid-afternoon trade, its highest level since 2 June 2008.

The S&P CNX Nifty rose 22.35 points or 0.47% to 4805.25. The index struck day’s high of 4842.20 in intra-day trade, its highest level since 2 June 2008.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.98% or 11.68 points to 1202.07 while stock markets in Indonesia’s Jakarta Composite index ended the day lower at 2371.30.

In other regional market, European shares rose for a fourth straight session Tuesday, with miners getting a lift from stronger gold prices and deal-making also helping the latest advance in equities. At the regional level, the U.K.’s FTSE 100 index rose 0.6% or 28.64 points to 4,962, while the German DAX index added 0.47% or 25.61 points to 5,489 and the French CAC-40 index moved up 0.32% or 11.56 points to 3,664.