Asian markets finishes higher

Sydney, Sensex, Shanghai close in green while Hang Seng continues to linger in red

Stock markets in Asian region finished mostly higher on Thursday, 14 January 2010, as most of the regional markets step in Wall Street shoes where markets put up good gains ahead of earning season. Stock market in Australia, South Korea, China, India edged higher while markets in Hong Kong bucked the regional trend.

On Wall Street, stocks closed higher as surging financial, chip and health care stocks outpaced the energy sector ahead of much anticipated earnings news. The Dow Jones Industrial Average added 54 points or 0.5% at 10,681. The S&P 500 rose 9 points, or 0.8%, at 1146, and the Nasdaq went ahead by 26 points, or 1.1%, to 2308.

On the economic front, the Fed’s beige book, which offered an anecdotal snapshot of economic activity around the country, painted a modestly improving picture. Stocks maintained the day's gains after the afternoon report showed 10 of the Fed's 12 districts reported better activity or improving conditions. Eight districts gave that same appraisal in December's report. Most districts noted up ticks in 2009 holiday sales slightly greater than 2008 and cited increasing home sales.

Separately, the U.S. Treasury budget deficit narrowed to $91.9 billion in December compared with a $120.3 billion deficit in the previous month.

In the commodity market, crude oil rose, snapping three days of declines, on speculation corporate earnings in the U.S. will improve and bolster the economy, fueling consumption in the world’s biggest energy user.

Crude oil for February delivery rose as much as 54 cents, or 0.7%, to $80.19 a barrel in electronic trading on the New York Mercantile Exchange. It was at $80.12 a barrel at 4 p.m. Singapore time.

Brent crude oil for February settlement rose as much as 59 cents, or 0.8%, to $78.90 a barrel on the London-based ICE Futures Europe exchange. It was at $78.78 a barrel at 4:01 p.m. Singapore time. The contract expires at today’s settlement. The more actively traded March future gained 43 cents to $79.25 a barrel.

Gold advanced for a second day as a weak dollar helped fuel demand for bullion as a store of value. Gold for immediate delivery climbed as much as 0.7% to $1,145.65 an ounce and traded at $1,142 at 2:09 p.m. in Singapore. February-delivery futures in New York rose 0.5%.

In the currency market, currency majors were trading in confined ranges as investors looked to the European Central Bank's rate decision and press statement due later.

The Japanese yen was quoted at Y91.60 per US dollar on Thursday from yesterday quote at Y91.38 per dollar in New York.

The Hong Kong dollar was trading at HK$ 7.7565 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 rose smartly against all major currencies on Thursday after stunning jobs data boosted bets on an almost certain chance of an interest rate rise in February. At the local close, the dollar was trading at $US0.99304, from Wednesday's $US0.9227, with stop-loss buying having kicked in around $US0.9265-75.

In Wellington trade, the New Zealand dollar rose after a stronger than expected employment report in Australia made this part of the world a more attractive investment destination. The NZ dollar was US74.06c at 5pm, up from US73.92c at 8am and little changed from US74.04c at 5pm yesterday.

The South Korean won closed at 1,121.10 won to the greenback, up from yesterday 1,125.50 won.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 31.7490, 0.0190 up from Wednesday’s close of NT$31.8090.

In equities, Asian equity markets were mostly higher Thursday on Wall Street’s rally, though shares in China were lagging on continued worries over further monetary policy tightening.

In Japan, the stock market gained on Thursday, lifted by technology stocks as foreign institutional investor’s evinced fresh buying interest in the market, especially technology stocks, on optimism about sustainable recovery in Japanese economy as well as global economy. Japan Airlines attracted huge volumes on speculative trading before the impending delisting from the exchange. More than 1 billion shares of JAL were traded during the session.

The benchmark Nikkei 225 Index rose 172.65 points, or 1.61%, to 10,907.68, while the broader Topix index of all First Section issues rose 14.99 points, or 1.6%, to 959.

On the economic front, data released by the Cabinet Office revealed that core machinery orders declined by a seasonally adjusted 11.3% month-over-month in November, following a 4.5% drop in the previous month. The data surprised economists who expected a bounce back in November with a marginal 0.2% gain. On an annual basis, core machinery orders plunged 20.5% during November, following a 21% contraction in the previous month. Economists expected the orders to decline 10.1% for the month, on annual basis.

In a separate report, the Bank of Japan revealed that an index measuring the prices of domestic corporate goods in the country rose 0.1% in December compared to the previous month. The index came in line with economists expectations, after having risen 0.1% in November. On annual basis, the domestic corporate goods index or CGPI declined 3.9% during December, in line with expectations, following 4.9% decline in the previous month.


In Mainland China, shares were clawing back some of yesterday’s losses, which were sparked by The People’s Bank of China's move to hike the reserve ratio requirement for banks, but some jitters over policy tightening remained.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, gained 1.35% or 42.89 points, to 3,215.55, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange spurted 1.44% to 13,204.19. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, added 1.40%, to 3,469.05.

On the economic front, Chinese urban property prices rose 7.8% annually in December. According to the National Development and Reform Commission reports, in November, property price inflation was 5.7%. Month-on-month, real-estate prices in 70 cities were up 1.5% in December. Prices of new homes climbed 9.1% from the previous year and second-hand house prices rose 6.8%.

In Hong Kong, share market tried to recoup some of its previous losses, though worries over further tightening by Beijing continued to weigh on policy-sensitive banks and property developers.

At the closing bell, the Hang Seng Index tanked 31.65 points, or 0.15%, to 21,716.95, while the Hang Seng China Enterprise, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, dropped 118.81 points, or 0.95%, to 12,363.37.

In Australia, shares rose, led by miners, as concern that a policy tightening in China would slow demand receded, with sentiment also boosted by strong jobs data and rebounding Asian markets. At the close, the benchmark S&P/ASX200 index was 29.9 points, or 0.6%, higher at 4898, while the broader All Ordinaries index advanced 29.3 points, or 0.6%, to 4929.4.

On the economic front, Australia's jobless rate fell last month as the labor market gathered strength, building the case for further interest rate rises. According to the Australian Bureau of Statistics, the unemployment rate eased to 5.5% in December from a revised 5.6% rate in November. Australia added about 93,800 jobs in the final three months of 2009. For the year, the gain was about 100,000 - but less than the 135,000 created in 2008 when the jobless rate ended the year at 4.6%.

In New Zealand, benchmark index ended almost flat, up 0.07% to end Thursday in the positive terrain. However, the domestic share market ended its three-day losing streak to end marginally in the green region. The benchmark NZX 50 inched up 2.14 points or 0.07% to 3278.33. The index has fallen on each of the past three days, after reaching a 15-month high last Friday. However, the NZX 15 lost 11.74 points or 0.20% to close at 5950.55.

On the economic front, consents for new home building construction in New Zealand increased 3.1% in November versus the month before. Statistics New Zealand reported the data, showing the number of housing units authorized for construction was the highest since May 2008. The result followed an increase of 11% in October 2009. Statistics NZ said permits were issued for 1,458 new stand alone housing units in November, while 42 were issued for new apartment units.

In South Korea, stocks closed higher as investors brushed off concerns from China's credit-tightening measures and scooped up shares of shipbuilders and tech chips. The benchmark Korea Composite Stock Price Index (KOSPI) advanced 14.36 points to 1,685.77.

In Taiwan, stock markets took a turnaround on Thursday as Acer hit a 10-year closing high after IDC said the company's market share rose in the fourth quarter of last year. Financial shares supported the gains in technology sector as investors turn positive ahead of a memorandum of understanding between Taiwan and China that will take effect on Saturday. The memorandum of understanding between Taiwan and China allows the island's financial firms to tap the mainland market and paves way for banks on both sides to invest in each other. The benchmark Taiex share index snapped its losing streak, by finishing the day higher by 93.42 points or 1.44% at 8289.98.

In Philippines, stocks edged higher in a listless sort of a day as traders continued to follow the global leads with the US dollar coming under a continued bout of selling and assisting the risky assets globally. Investors were seen entering into a buying mode after yesterday's losses and picked up issues in services and industrial sectors. The stocks succumbed to mild profit-taking Wednesday on global jitters arising from a potential government levy on US banks. At the final bell, the benchmark index PSEi went up 0.81% or 25.21 points to 3,121.91, while the All Shares index escalated 0.43% or 8.42 points to 1,951.53.

In India, the key indices edged higher, gaining for the second straight day on firm Asian stocks. A strong response to the initial public offer (IPO) of Infinite Computer Solutions which focuses on IT services for the telecom vertical, also underpinned sentiment. NTPC, India's largest utility by sales, rose after company said its follow-on public offer will open on 3 February 2010. Airline and capital goods stocks rose.

The BSE 30-share Sensex was up 75.07 points or 0.43% at 17,584.87. The S&P CNX Nifty was up 25.95 points or 0.50% at 5259.90.

On the economic front, the wholesale price index (WPI) rose 7.31% in December 2009 from a year earlier, sharply higher than previous month's annual rise of 4.78%, data released by the government today, 14 January 2010, showed. Food price index in WPI rose 19.17% in December 2009. Another data showed, the food price index was up 17.28% in the year to 2 January 2010. The fuel price index up 6.25% and the primary articles price index up 13.82% in the week to 2 January 2010

Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly higher at 1294.71 while stock markets in Indonesia’s Jakarta Composite index increased by 12.31 points ending the day lower at 2645.18. Singapore’s Strait Times finished the day at 2909.52 i.e. 21.14 points higher.

In other regional market, European shares climbed for the second session in a row on Thursday, as investors bought shares in mining companies after strong production figures from Rio Tinto. Overall, the U.K. FTSE 100 index climbed 0.5% or 27.55 points to 5,501, the German DAX index rose 0.52% or 30.75 points to 5,994 and the French CAC-40 index advanced 0.5% or 18.30 points to 4,019.