Asian stocks rejoice on Monday

Markets build up impressive gains on upbeat US data, BIS alleviates Eurozone debt worries

Asian stock markets rose today as investors eyed the recent array of positive economic data and lack of fresh bearish news on the Eurozone debt debacle spurred buying on the very first session of the day. However, the overall trading was quite dull as a few major markets were closed today. The DOW futures rallied sharply and commodities roared, bringing smashing gains for the resource related stocks. The markets were given a helping hand by a Bank for International Settlements (BIS) report stating that government debt accounted for a smaller part of euro area banks' exposures to the countries facing market pressures than claims on the private sector. On Friday, an index of U.S. consumer sentiment climbed in June to the highest level in more than two years, fueling speculation the nation's economy may be able to weather Europe's debt crisis.



The BIS stated in its quarterly review that global financial markets were highly volatile from mid-April to early June as fiscal concerns and weak growth led to a rapid deterioration in investor confidence. The BIS, an international organization of central banks, also stated that government debt accounted for a smaller part of euro area banks' exposures to the countries facing market pressures than claims on the private sector.

The report said that financial problems faced by Greece and other euro area sovereigns were crystallized by investors' anxiety about unsustainable fiscal positions, and investors went back to traditional safe haven assets amid growing uncertainty. Even a significant European rescue package could not allay market concerns about the economic outlook. It could only bring about a temporary reprieve from the crisis in euro sovereign debt markets, the BIS stated.

The Euro broke above 1.2100 mark and extended gains further, breaking 1.2200 convincingly to record fresh 10 session highs and pushed the stocks higher around Asia. Japan's Nikkei 225 Stock Average rose 174.60, or 1.8 percent, to 9,879.85 following strong gains in consumer goods, machinery makers and exporters.

In Mumbai, markets continued to fly above 17000 mark for BSESENSEX as global cues and strength in the IT stocks supported the sentiments. The BSE Sensex ended at 17,338, up 273 points and the Nifty settled at 5,197, up 78 points. The market breadth was positive, out of 2,966 shares traded, 1,869 advanced and 966 declined on the BSE. All the sectoral indices barring the healthcare index ended in the green. The IT index surged 3.5% to 5,351 and the oil&gas index was up 2%, respectively. India's wholesale price index (WPI) rose an annual 10.16% in May, driven by higher food and fuel prices, a latest press release from the Ministry of Commerce & Industry showed today.

In other markets, Hong Kong's Hang Seng Index and South Korea's Kospi Index increased 0.9 percent. Taiwan's Taiex Index advanced 1.2 percent while Strait Times in Singapore added 0.80%. Markets in Australia, China and the Philippines were closed today for holidays.

In commodities, crude oil was boosted by a terrific pick up in the single currency, hitting highs of $75.70 per barrel for the benchmark futures as traders eyed as the weakness in dollar and ideas that the approaching peak summer driving season would push up the demand for gasoline. Gold remained steady around $1230 per ounce with a mild negative bias as the gains in equities curbed fresh buying for the yellow metal. COMEX Copper also advanced sharply, hitting highs near $3 per pound and currently quotes at $2.9755, up 7.15 cents or 2.46% from the previous close. DOW futures are up 84 points, building up gains throughout the day.