No weakness ahead of weekend for Asia

Stocks ended on a bullish note with good gains coming in Australia and Japan as strong overnight US cues boost the sentiments

Asian stocks ended on a bullish note ahead of the weekends with good gains coming in Australia and Japan as sound economic numbers and strong overnight US cues boosted the sentiments. Risk appetite emerged in the world markets today as the dollar fell well above 1.2100 levels in Asia. Though the greenback managed to reverse these losses later on, the regional indices in Asia logged decent gains in the meantime, building upon the bearish movement in dollar. Copper prices rose, following upbeat economic data from China and resource sector was benefited around Asia along with banking and financials, after steep losses in last few weeks.



The Japanese stocks rose for the second successive day on an impressive rally in Wall Street in the previous session. The weakening of the Japanese yen against the dollar assisted the exporters while banks also witnessed a decent up tick. The gains were primarily a follow up to strong GDP data yesterday and made the investors sideline the comments from the new Prime Minister of the country. Prime Minister Naoto Kan on Friday pledged a fiscal policy overhaul to reduce the country's massive public debt mountain, saying that the country's outstanding public debt is huge.

However, this did not deter the buyers much and the weakness in Japanese Yen was considered as a good sign of the exporters. Japan lifted its first quarter GDP estimate to 5% from the previous read of 4.9%. GDP expanded for the fourth quarter in a row following the worst financial crisis in six decades. Earlier in the week, the Japan Machine Tool Builder's Association stated that Japanese machine tool orders nearly doubled and rose 191.8% in May from a year earlier. The benchmark Nikkei 225 Index went up sharply, adding 162.60 points, or 1.70%, to close 9,705 while the broader Topix index of all First Section issues was up 9.65 points, or 1.13%, to 866.

The Australian stocks also rallied for a second successive day on upbeat Chinese data and optimism that economic recovery will not be dampened by the recent crisis in Europe, leading to a decent spurt in miners and other resource based stocks. The benchmark S&P/ASX200 Index logged a gain of 70.20 points, or 1.58% and closed at 4,505, while the All-Ordinaries Index ended at 4,516, representing a gain of 68.10 points, or 1.53%.

Chinese equities managed to close slightly higher after strong economic data, which bought back worries of monetary tightening. China yesterday reported its May exports climbing the most in six years while the inflation in the country accelerated to 3.1 % in last month, the quickest pace in 19 months, indicating the world's fastest-growing major economy faces overheating risks. Worries over a property bubble also continue to fan after China's property prices rose at the second-fastest pace on record in May. The 12.4 % gain in prices compared with a record 12.8 % increase in April from a year earlier means that still plenty of softening is needed in the overheated market. The Shanghai Composite Index closed up 7.36 points or 0.29 % to close at 2,569.94 points. The Shenzhen Component Index rose 17.11 points, or 0.17 %, to end at 10,239.33.

In Mumbai, the stocks ended with impressive gains after the industrial production surged and traders grew convinced of the 17000 levels acting as a very good floor for the benchmark SENSEX. The index linked counters jumped today to make the SENSEX close up 142.87 points or 0.84% from the previous close. The industrial output in April jumped 17.6% from the same month a year earlier, according to figures released today, on robust growth in the manufacturing sector and buoyant mining activity.

In other markets, Hong Kong's Hang Seng index surged 1.22%, Strait Times In Singapore added 0.60% while the Taiwanese shares rose 1.6%.

In currencies, dollar stayed lower in the early moves, gains capped by risk appetite. A moderate recovery was seen in the currency with the 1.2100 levels being breached temporality against the Euro, before the sentiments reversed again to take the dollar near 1.2130 levels. Crude slipped under $75 after early gains and bottomed out at $74.52 to crawl up. Gold was very thinly traded, consolidating just above $1220 per ounce mark as sentiments looked very indecisive.