Asian markets tread water; China surges to 2-Month High

Japanese stocks remain an exception as Nikkei falters

Asian market managed to finish the Thursday session slightly above the flat line on Thursday, 29 July 2010, after regional companies reported better-than-expected quarterly earnings and signs that Europe's economy is bouncing back faster than expected.



Economic sentiment in the 16-nation euro zone rose in July 2010 the European Commission said Thursday. The commission's economic sentiment indicator rose to 101.3 from an upwardly revised 99 in June.

Chinese stocks led a recovery in Asian equities, after the China's central bank said it will keep a moderately loose monetary policy. The key benchmark indices in China, Hong Kong, Singapore, Taiwan and Indonesia rose by between 0.01% to 1.29%. But, the key benchmark indices in Japan and South Korea were down by between 0.15% to 0.59%.

But the overall gains were capped by renewed concerns over the pace of global economic recovery following a weak lead from Wall Street overnight after an unexpected dip in US durable goods orders.

Market confidences turned cautious after the Federal Reserve's regional survey of the American economy known as the beige book, the central bank said that the growth was slowing in some parts of the nation.

Chinese stockmarket continued upward rally for the straight eight days, with the key Shanghai Composite Index rose another 0.6% on Thursday, 29 July 2010, the index highest close in past two months, on the back of strong support from materials and resources and cement producers. The market confidence was further boosted after the encouraging statement from the central bank that it would keep a a moderately loose monetary policy.

Deputy central bank governor Ma Delun said the nation would maintain a moderately loose monetary policy in the second half of this year, the Financial News reported.

Cement producers rallied on a government development plan for the industry meanwhile steelmakers shot up on improving earnings prospects. Other materials and resources-linked companies spiked on bargain hunting. Banks and financials were also higher inline with market uptrend. Buying pressure was also evident in oil & coal producers and telecom companies. Properties and airline shares were mixed o profit booking after yesterday's hike.

At the finish bell, the key Shanghai Composite Index quoted at 2,648.12, increased by 14.46 points or 0.55% from yesterday's close. The Shenzhen Composite Index, which covers the smaller mainland exchange, advanced 0.13% or 13.74 points, to 10,838.91.

Equities on the Hong Kong sharemarket closed slight higher on Thursday, 29 July 2010, registering eighth successive gains as short covering emerged in late afternoon trade on tracking firmer opening in the European market and positive US index futures. But investors' confidences were weak amid concerns about the pace of global economic recovery. The Hong Kong key Hang Seng Index recouped initial losses in afternoon trade to finish 2.64 points or 0.01% higher at 21,093.82 points, a fresh three-month high, after touching day's high of 21,130.74 and low of 20,970.93-during the trade.

Equities on the Japanese sharemarket finished the session lower today, as domestic investors booked profit following yesterday strong hike. Selloff was triggered on tracking weak performances of Wall Street overnight. The key benchmark Nikkei225 index dropped 0.6% to close at 9,696.02 points, on Thursday, 29 July 2010, from a two-week high of 9,753.27 that touched a day before., while the Topix index registered its first drop in five days. Decline was triggered by renewed concern the pace the global recovery may slow after an unexpected dip in US durable goods orders and as Federal Reserve's regional survey of the American economy known as the “beige book,” the central bank said that the growth was slowing in some parts of the nation.

Exports shares suffered the most after the yen resumed strengthening against the euro and the US dollar in Asian trade. Meanwhile pullback in commodity oil and metal prices, coupled with worries about pace of global economic recovery, hammered materials and resources and oil & coal producers. Banks and financials were mixed as little profit booking witnessed after an impressive rally in the previous session.

NEC Corp. retreated 3.7% to 235 yen after the personal computers maker reported first-quarter net loss of 43.1 billion yen as compared 33.8 billion yen a year earlier.

Sanyo Electric Co. appreciated by 26.3% at 149 yen and Panasonic Electric Co 15.4% to 1,124 yen after the Nikkei reported Panasonic Corp. will launch tender offers and conduct stock swaps for the two subsidiaries to make them wholly owned units as early as this year. Panasonic plummeted 7.7% to 1,077 yen.

Japan's retail sales in June rose for the sixth straight month, but the pace of growth is slowing, the latest data showed. The government said Thursday that June retail sales climbed 3.2% from a year earlier.

Weaker cues from the overseas market dominated into the Australian bourses, despite an afternoon buying frenzy which briefly the main indices in the black. The key benchmark All Ordinaries Index finished the session edge 0.1% lower on Thursday, 29 July 2010, registered a first fall in five days.

Materials and resources players were best performer thanks to firmer metals trade in London, meanwhile banks and financials managed to eke-out small gains. Renewed worries about pace of global economic recovery hammered oil & coal producers and retailers shares. Real estate industry was worst performer.

Despite the earning seasons lingering around and positive earning results released by some of the companies on the local front, Philippines stock market closed lower as investors took cues from the global markets, which is seafaring in the red territory. Losses on Wall Street overnight weighed the investor's sentiment lower, which in turn led to the selling of key heavy weight stocks. US stock market swung lower Wednesday after a Federal Reserve report signaling a slowing economic recovery and news that orders for big-ticket items sank in June prompted consolidation of recent gains.

At the final bell, the benchmark index PSEi declined 0.65% or 22.44 points to 3,429.35, while the All Shares index tumbled 0.68% or 15.17 points to 2,183.68. All the six sub indices chased the composite index, ending in red, with holding firms index losing the most (down 1.73%), followed by the property index (down 1.05%). Over 908 million stocks valued at P3.419 billion were traded. Decliners outpaced advancers 78 to 37, and 46 stocks were unchanged.

New Zealand shares ended in the positive on Thursday, however after registering a fall during early trade post the RBNZ's OCR hike with a downbeat outlook on recovery. The Reserve Bank of New Zealand increased the Official Cash Rate (OCR) by 25 basis points to 3.0 percent, as expected in its Thursday monetary policy meet. The action was taken citing the fact that although fragile global recovery is on its way, the future prospects for growth are deteriorating. Also annual CPI inflation has been near 2 percent for the past five quarters and as the economy grows, inflationary pressures are expected to pick up. The RBNZ governor added that outlook for growth has softened, however, it is still appropriate to continue to reduce the extraordinary level of support implemented during the 2008/09 recession.

By the provisional closing, the NZX 50 ascended 0.29% or 8.66 points to end the day at 3030.84. Meanwhile the NZX 15 index added 0.44% or 24.29 points to end the day at 5476.56. The benchmark index advanced for the second day in a row on Thursday.

Thailand equities ended on Thursday mostly mixed in line with most of the Asian markets that remained almost flat oscillating near the red and green line. Meanwhile, equities declined globally, on fresh signs of a slowdown in the pace of economic recovery, with orders for US durable goods unexpectedly falling in June. Meanwhile, the Federal Reserve's latest Beige Book summary of national economic conditions, based on information before July 19, pointed to a less-than-booming recovery.

At the provisional closing, the benchmark SET index moved forward 0.09% or 0.81 points to end at 854.59. The SET 100 ascended 0.08% or 1.02 points to close at 1279.98. However, the SET 50 ended almost unchanged, down 0.01 points to 584.20.

Strong opening in the European market and positive US index futures gave life to the sluggish Singapore sharemarket, which soared higher in late afternoon in heavy volume despite choppy trade during rest of session, pushing the key benchmark indices 0.4% above the boundary line on Thursday, 29 July 2010. At the finish bell, the blue chip Straits Times Index was quoted at 2,997.65, jumped 12.27 points or 0.41% from yesterday's close, off an day's low of 2,980.70 and day's high of 2,9980.70.

Malaysian stock market closed higher boosted by continued buying in selected blue chips as well as lower liners as late gains in most regional markets had prompted buying interest in the local market. At the final bell, the benchmark index FBM KLCI ascended 0.24% or 3.22 points to 1358.41.