Stocks end in green across Asia

Risk appetite stays firm on upbeat overnight cues and ideas of a strong global recovery

Asian markets moved up on strong cues from the overnight US markets and ideas that the renewed wave of risk appetite in the global markets would stay on.



The markets also eyed a latent strength in commodity prices with crude oil hitting levels above $75 per barrel in Asia. The International Monetary Fund (IMF) lifted China's GDP growth forecast for 2010 to 10.5 percent from the earlier projection of 10 percent, bolstering sentiments of a strong global economic recovery led by the Asian juggernaut. The IMF also upgraded its 2010 global growth forecast today, citing robust expansion in Asia and a renewed US economic recovery. The fund raised its 2010 global output forecast to 4.6 percent from 4.2 percent in April's review of the global economy, but kept its 2011 view unchanged at 4.3 percent.

The Japanese stocks closed in green, lifted by positive cues from Wall Street where the major averages gained more than 2.5% in a broad-based rally. The weakening of the local currency against the US dollar as well as upward revision of global growth forecast by IMF also lifted market sentiment. Almost all the stocks in Nikkei advanced, as traders resorted to short covering and profit taking at higher levels, though concerns about debt crisis in Europe and upcoming earnings in the US continued to haunt investors.

The benchmark Nikkei 225 Index rallied 256.09 points, or 2.76%, to 9,536 while the broader Topix index of all First Section issues rose 19.51 points, or 2.32%, to 861. On the economic front, a report released by the Cabinet Office in Japan revealed that core machinery orders plunged a seasonally adjusted 9.1% in May compared to the previous month, falling for the first time in three month. Another report released by the Ministry of Finance revealed that the country posted a current account surplus of 1.205 trillion in May, lower than economists' expectation for a surplus of 1.317 trillion yen for the month, following a surplus of 1.242 trillion reported for April.

The Australian stocks closed in positive territory as strong global cues and stable employment numbers supported the sentiments. Miners were also boosted on strong commodity prices. The benchmark S&P/ASX200 Index added 102.1 points, or 2.40% and closed at 4,357, while the All-Ordinaries Index ended at 4,374, representing a sharp gain of 96.20 points, or 2.25%.

On the economic front, a report released by the Australian Bureau of Statistics revealed that unemployment rate in the country remained steady in June and also managed to beat expectations following increase in the number of jobs during the month surpassing expectations. As per the report, the unemployment rate stood at a seasonally adjusted 5.1% in June, while May's unemployment was downwardly revised to 5.1% from 5.2%. A year ago, the unemployment rate stood at 5.8%.

However, in China, stocks fell after an intraday surge in last session was cut off on worries that Agricultural Bank of China will make a lackluster debut next week. The benchmark Shanghai Composite Index, which tracks both A and B shares, pared last two day's advances to close down 0.3%, or 5.97 points, at 2415.15. The Shenzhen Composite Index fell 0.2%, or 2.13 points, to 956.26. The IMF attributed the upward revision of China's 2010 GDP growth to the strong rebound in exports and resilient domestic demand so far this year in the country.

In Mumbai, the key benchmark indices pared gains after a strong intraday surge, as US index futures fell. Banking, metal, realty and IT stocks rose. The BSE 30-share Sensex was provisionally up 172.74 points or 0.99%, off close to 85 points from the day's high. All the sectoral indices on BSE were in green.

The market breadth was strong. A hike in 2010 global growth forecast from the International Monetary Fund, firm Asian stocks and stock market regulator Securities & Exchange Board of India (Sebi)'s decision to reduce exposure margins for stock derivatives boosted sentiments. As per provisional figures, the BSE 30-share Sensex was up 172.74 points or 0.99% at 17,643.77. The S&P CNX Nifty was up 51.15 points or 0.98% at 5,292.25 as per provisional figures.

In other markets, the Hang Seng in Hong Kong surged 1%, Singapore's Straits Times Index added 1.26% while Taiwan's TSEC also rallied by 0.99%.

Dollar had a mixed outing but was mostly strong in the electronic session as markets awaited critical interest rate decisions from the ECB and the BOE. Crude oil came off highs of $75 but managed to hold on just below the level. Gold once again fell under $1200 per ounce though, not being able to hold on to an early advance and indicating that the metal is getting weary looking vulnerable to some more correction.