Asian markets on a high ahead of weekends

Strong cues from overnight US markets keeps investors bullish, Eurozone bank's stress test results awaited



An excellent push to the US stocks yesterday boosted the sentiments for the Asian stocks. US stocks rose sharply yesterday with DOW rallying by 200 points as earnings lifted the mood and dollar fell above 1.2900 against the Euro. US Federal Reserve Board Chairman Ben Bernanke stated that the central bank was ready to take further steps to stimulate the U.S. economy if growth turns out to be weaker than expected. This kept sentiments upbeat in Asia even as concerns about the results of the stress tests of European banks, slated for release later in the day, continued to cause some anxiety. Asian markets ended mostly higher today, rallying in tune with the gains in US markets where the major averages gained more than 2.5% defying weak economic data amid better than expected results from major companies

The Japanese stocks ended a 5-day losing streak and soared on optimism about US earnings. The Japanese Yen retreated slightly, boosting the exporters after an impressive opening and buying continued to pace up throughout the session. The benchmark Nikkei 225 Stock Average gained 210.08 points, or 2.28%, to close at 9,430.96 while the broader Topix index was up 15.81 points, or 1.92 per cent, at 841.29.

On the economic front, a statement released by the Ministry of Finance revealed that Japanese investors purchased a net 1.305 trillion yen in foreign bonds and notes last week. The statement further revealed that Japanese residents also bought a net 49.2 billion yen in foreign stocks. Over the same period, foreign investors sold a net 29.8 billion yen in Japanese stocks and purchased a net 231.2 billion yen in Japanese bonds.

The Australian stocks added nearly 2% in an across the board rally as rising commodity export earnings augured positive for the index. Banks, resource and commodity stocks all soared with an upbeat undertone in the Asian markets helping buyers' tone up their purchases. The benchmark S&P/ASX200 Index added 83.7 points, or 1.91%, at 4458 points, while the All-Ordinaries Index ended at 4,475, representing a gain of 80.30 points, or 1.83%.

On economic front, a report released by the Australian Bureau of Statistics revealed that exports prices surged in June Quarter from the March quarter, while import prices also rose in the same period. As per the report, the export price index increased by 16.1% quarter-over-quarter, faster than the 3.8% rise in the previous quarter. Import prices, on the other hand, rose 1.9% in the June quarter, following the 0.3% rise in the preceding quarter. On a year-over-year basis, export prices climbed 7.1% in the June quarter, rebounding from the 26.8% slump in the previous quarter. Import prices fell for the fourth straight quarter, down 5.2%.

In China, stocks witnessed a fifth consecutive session of gains as signs of slowing growth and relatively muted inflation continued to bring in buying on hopes that some of the policy tightening introduced earlier this year might be unwound. Fresh moves to curb lending are also not being anticipated anytime soon and the markets neared the 2600 points mark for the benchmark Shanghai Composite. The China Securities Regulatory Commission said on Thursday that it would review China Everbright Bank's application for a Shanghai IPO next Monday, potentially enabling the bank to raise about 20 billion yuan ($2.9 billion).

In other markets, Hong Kong's Hang Seng added 1.10%, while Singapore's Strait Times edged up 0.60% and Taiwan's Taiex surged 1.24%.

Dollar lost out today after nearing 1.2740 levels against the Euro. The continued risk appetite made the single currency pare these losses and hit a two-day high of 1.2950. DOW futures are up 28 points, building up steady gains. Crude oil surged above $79 to hit to hit a three month high of $79.60 per barrel while Gold tested $1200 per ounce before easing slightly. COMEX Gold futures were last seen quoting at $1197.60, up $2 per ounce from the previous close.