Asian stocks mostly up

Gains extend following the stress test results of European banks

Asian stocks mostly rose today; following Wall Street higher as risk appetite remained firm following the not so bad stress test results of European banks. With only 7 of the total 91 banks having failing the test, the US markets had raced up ahead of the weekends. This trickled into markets in Asia right from the start and ideas that strong earnings season would continue this week also fueled some optimism in the regional benchmarks. However, the commodity prices appeared to be softening after runaway gains in the last few days and DOW futures also slipped in red in the electronic trading, making it quite clear that some profit selling could be seen in the markets after last week's steep climb.



The Australian stocks closed in green as positive closing on Wall Street on Friday following the result of stress test results and overall upbeat tone in Asian markets lifted sentiment. Banks and resources rose and the benchmark S&P/ASX200 Index gained 27.70 points, or 0.62%, at 4486 points, while the All-Ordinaries Index ended at 4,504, representing a gain of 29.30 points, or 0.65%.

On economic front, a report released by the Australian Bureau of Statistics revealed that producer prices at the final stage of production in the country rose in the June quarter, but at a less than expected pace. As per the report, the producer price index rose 0.3% between April and June, slowing from the 1% increase in the preceding quarter. The price of domestically produced items climbed 0.4% at the final stage of production in the June quarter, slower than the 1% increase in the March quarter. This was mainly due to price rises in building construction, and real estate agents, up 0.3% and 3.3% respectively.

The Japanese markets also ended higher, after witnessing some sell off in last few days. Investors have been slightly worried about the strength in the Japanese Yen and the exporters have been under pressure, capping the overall rise of the market. However, the stocks were climbing higher right from the start today and the benchmark Nikkei 225 Index closed with a gain of 72.70 points, or 0.77%, to finish at 9,504, while the broader Topix index of all First Section issues was up 4.59 points, or 0.55%, to 846.

On the economic front, a report released by the Ministry of Finance revealed that the country saw a merchandise trade surplus of 687.0 billion yen in June, which was roughly in line with analysts expectations for a surplus of 690.9 billion yen for the month. For the previous month, the revised trade surplus was 320.9 billion yen. Data further noted that exports climbed 27.7% on year, topping expectations for a 23.5% annual increase after the 32.1% surge in the previous month. Imports jumped 26.1% on year, slightly above forecasts for a 24.7% annual rise following the 33.4% jump a month earlier.

China's key stock index rose for a sixth day to close at its highest close in a month, boosted by expectations of looser economic policies this year and stronger overseas markets. The Shanghai Composite Index closed at 2,588.7 points, extending a 6.1 percent gain the previous week. A Chinese government think tank said today that there is no basis for a sharp appreciation in the yuan exchange rate. The State Information Center, a think tank under the National Development and Reform Commission, said in a report published in the official China Securities Journal that the government should closely monitor capital flows to avoid speculative hot money raising the yuan's value.

In Mumbai, markets skid lower after a steady start as the investors eyed the tomorrow's RBI's Monetary policy review. The key benchmark indices extended losses to hit fresh intraday lows in mid-afternoon trade as European stocks turned negative and as US index futures reversed initial gains. Closer home, caution prevailed ahead of the central bank's quarterly policy review on Tuesday, 27 July 2010 and as investors awaited key first quarter results. The BSE 30-share Sensex was down 104 points or 0.51% to 18,026 when last seen after hitting day's high of 18,194.09 in early trade. Rate sensitive realty and banking stocks fell ahead of the central bank's policy review.

In other markets, Hong Kong's Hang Seng added 0.12% and Taiwan's Taiex surged 0.34%. However, Singapore's Strait Times slipped 0.22%

Dollar rose today after its recent losses and was last seen quoting at 1.2897 against the Euro. DOW futures slipped and then came off the lows, quoting down 14 points right now. Crude oil slipped under $79 to quote at $78.57, down 41 cents on the day while Gold came off the highs above $1190 and slipped in late trading. The benchmark COMEX Gold futures are quoting at $1188.50, up just 70 cents on the day.