Asian Markets close higher

Nikkei, Hang Seng, Seoul, Sydney finish higher whereas Shanghai bucks regional trend

Stock markets in Asian region started a week on a positive note on Monday, 22 February 2010, as investors looked past the Federal Reserve’s discount rate hike to signs of strength in the US economy. The key benchmark indices in Japan, Hong Kong, Australia were up by 1 to 2%.

On Wall Street, stocks finished with small gains Friday, as investors digested the Federal Reserve’s surprise discount rate hike amid tepid inflation data. The Dow Jones Industrial Average, which traded as much as 40 points lower earlier, added 9 points, or 0.1%, to 10,402 by the closing bell. The S&P 500 went ahead by 2 points, or 0.2%, at 1109, while the Nasdaq gained 2 points, or 0.1%, at 2244. Each of the major averages tracked higher for the week, led by the S&P 500's 3.1% advance. The Dow gained 3%, while the Nasdaq improved 2.8% since last Friday's close.

On the economic front, the consumer price index’s release before the bell took an edge off concerns of imminent tightening. CPI, the price of goods and services purchased by consumers and a closely watched inflation gauge, edged just higher at 0.2% in January. The Labor Department also said its core rate, which strips out food and energy costs, actually showed a decline of 0.1%, while core CPI was projected to show a 0.1% up tick.

In the commodity market, crude oil rose for a fifth day in New York on speculation energy demand will increase as the global economy recovers from its worst recession since World War II.

Crude oil for March delivery rose as much as 70 cents, or 0.9%, to $80.51 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $80.11 at 4:13 p.m. in Singapore.

Brent crude for April delivery rose as much as 75 cents, or 1%, to $78.94 a barrel on the London-based ICE Futures Europe exchange, and was at $78.46 at 4:16 p.m. Singapore time. It climbed 0.5% to $78.19 on 19 February 2010, the highest settlement price since 13 January 2010.

Gold climbed for a third day, advancing to a one-month high as the dollar’s rally slowed, increasing the metal’s appeal as an alternative investment. Gold for immediate delivery gained as much as 1.1% to $1,131 an ounce, the highest since 20 January 2010, and traded at $1,124.82 at 1:31 p.m. in Singapore. Gold for April delivery in New York advanced 0.3% to $1,125.50 an ounce.

In the currency market, market sentiment got a lift after a German magazine reported that Germany's finance ministry had sketched out a plan to give troubled Greece between 20-25 billion euros of loans or guarantees, with Euro zone countries sharing the costs. That helped to assuage investor fears about a possible default by Greece and in turn boosted demand for riskier assets.

The Japanese yen was softened against major counterparts on Monday as gains in Asian stocks damped demand for the Japanese currency as a refuge. The Japan’s currency yen was quoted at 91.55 against the greenback.

The Hong Kong dollar was trading at HK$ 7.7642 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 trades, the Australian dollar was trading higher against the US dollar, helped by firm commodity and stock prices and a genial mood in the market. At the local close, the dollar was trading at $US0.9006 in late trade, up from $US0.8902 on Friday.

In Wellington trades, the New Zealand dollar rose slightly today as the US dollar retreated from recent highs. The NZ dollar was US70.26c at 5 pm from US70.12c at 8 am and US69.61c at 5 pm on Friday.

The South Korean won ended at 1,147 won to the greenback, up 13.3 won from Friday’s close of 1,160.30.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.0200, 0.0080 up from last trading day’s close of NT$32.1000.

In equities, Asian shares markets rose Monday, with the Japanese market getting a lift from exporters on the back of a fall in the yen.

In Japan, the key indices maintained momentum through the afternoon, finishing the day above the line. The result came despite a relatively flat lead in from international markets, with the materials and resources and energy showed strength and the banks bolstered gains. The market gains were broad based as investors digested the US Federal Reserve’s abrupt interest rate rise, the dollar firmness against yen, and stronger commodity prices. Gains were also boosted on expectation US Fed will not rush in raising interest rate sooner after lesser than expected rise in US consumer prices.

At the settlement Monday, the Nikkei 225 Stock Average index was at 10,400.47, climbed up 276.89 points, or 2.74%. The broader Topix of all First Section issues on the Tokyo Stock Exchange rose 20.67 points, or 2.32%, to 909.75.

In Mainland China, the share market finished the session lower on the first trading day after the Chinese Lunar New Year holiday, with key Shanghai index hover around psychologically-important 3000 level, on lingering concerns over possible further economy-cooling measures near term. Participant’s sentiments were also weak on cautious ahead of the legislative meeting, in which new policy changes may affect their investment decisions. Losses were broad based, with telecommunication sector led declines, and followed by financials and energy sectors.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, eased 14.74 points, or 0.49%, to 3,003.39, meanwhile the Shenzhen Component Index on the smaller Shenzhen Stock Exchange slid 91.24 points, or 0.74%, to 12,213.54. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, fell 0.55%, to 3,233.34.

In economic section, the China Petroleum & Chemical Industry Association said today that China processed 29% more crude oil to 30.14 million metric tons while oil-product output increased 24% to 18.59 million tons in January than a year earlier as the economic recovery spurred demand.

In Hong Kong, stock markets bounced back from one-week lows along with a steady start in Shanghai markets after a week-long break boosted investor appetite for battered banking stocks. The benchmark Hang Seng Index ended up 2.43% or 483.25 points at 20,377.27, posting its biggest one-day percentage gain in more than two months. The Hang Seng China Enterprises Index, which tracks the overall performance of 43 Mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, closed up 2.27%or 255.73 points at 11,519.56.

In Australia, the shares maintain initial gains throughout the afternoon, finishing the day above the line, with broad based gains across the sectors on tracking positive cues from Asian stocks and US index future indicated higher opening today, and as generally upbeat earnings results and upbeat guidance from blue chips companies. At the settlement Monday, the benchmark S&P/ASX200 index has gained 82.40 points, or 1.78%, to 4,717.50, meanwhile the broader All Ordinaries raised 76.40 points, or 1.64%, to 4,732.70.

In New Zealand, equities commenced the first trading day of the week in the positive terrain with the benchmark index rising by close to 1% by the end of the day. The share market registered a rise for the second consecutive session in a row on Monday. At the closing, the NZX 50 advanced 0.72% or 22.67 points to 3129.75. Meanwhile, the NZX 15 increased 0.60% or 33.78 points to close at 5634.33.

In South Korea, stocks closed higher as investors snapped up steel, bank and tech shares on improved sentiment following Wall Street gains. The benchmark Korea Composite Stock Price Index (KOSPI) gained 33.2 points to 1,627.10, snapping a two-session losing-streak.

In Taiwan, stock markets retained its historical trend of performing positive on their opening day for the Year of the Tiger extending gains for the fourth session. Major technology exporters rose on hopes that a new crop of computers and high-tech gadgets could spur fresh demand in 2010. The benchmark Taiex share index continued its upward momentum after a stretch of holiday’s as it gained for the fourth straight session after ending the day higher by 118.20 points or 1.59% at 7560.04.

In Philippines, the stock market broke the crucial 3000 mark once again, closing higher as investors took cues from the gains on Wall Street last Friday, which in turn led to the buying of key heavy weight stocks. Moreover, investors are in a wait and watch position of the financial performance of the listed companies for last year, which are about to release this week. At the final bell, the benchmark index PSEi escalated 1.24% or 37.06 points to 3,015.59, while the All Shares index went up 0.85% or 16.19 points to 1,906.76.

In India, the Key benchmark indices pared gains towards the end trade as investors turned cautions ahead of the Union Budget 2010-2011 later this week. After a firm start triggered by higher Asian stocks, the market pared gains in morning trade. It regained strength in mid-morning trade. The Sensex moved in a narrow range in early afternoon trade. The market once again pared gains in mid-afternoon trade. The BSE 30-share Sensex was up 45.42 points or 0.28% to 16,237.05. The S&P CNX Nifty added 11.50 points or 0.24% to 4856.40.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly higher at 1266.44 while stock markets in Indonesia’s Jakarta Composite index gained by 9.89 points ending the day higher at 2564.26. In Singapore, the strait times finished the day at 2757.46 i.e. 0.32 points higher.

In other regional market, European shares were in a tight range, struggling to build on a recent run of gains, with a mixed set of earnings eyed. On a regional level, the U.K. FTSE 100 index increased by 0.12% or 6.54 points to 5,365, the German DAX index declined 0.1% or 6.43 points at 5,716 and the French CAC-40 index declined 0.1% or 1.57 points to 3,768.