Modicum of gains for select Asian markets

Weak US economic data continues to keep buying under check

Asian markets were mixed with a modicum of gains emerging in select indices as weak US economic data and lackluster overnight cues kept the movement sluggish. The major indices had opened the week on a bleak note yesterday and failed to generate much of a buying interest as investors waited for some clarity. DOW futures did shoot up in the late Asian trades, following dollar's slide to 1.2900 but by that time it was too late for the regional indices to make way for any synchronized rush upwards. Wall Street indices closed flat on poor housing and manufacturing data though bargain hunting made the stocks end the four-day losing streak.



The Japanese market continued to record losses for the second day of the week as poor US economic data and a continued rise in the Japanese yen hurt the sentiments. Some gains were noted in intraday moves after news trickled in that Japanese Prime Minister Naoto Kan will meet Masaaki Shirakawa, Governor of the Bank of Japan early next week to discuss the wild rise in the Japanese yen, which hurt's the country's exporters. The benchmark Nikkei 225 Index shed 34.99 points, or 0.38% to close at 9,162; with some serious gains emerging in intraday moves after the index broke above 9100-point mark. The broader Topix index of all First Section issues was down 1.85 points, or 0.22%, to 827.

On the economic front, a report released by the Ministry of Economy, Trade and Industry showed that tertiary industry activity in the country dropped 0.1% month-on-month in June compared to the previous month, in line with economists' expectations. However, the rate of decline slowed from a revised 0.8% drop seen in May. On a yearly basis, tertiary activity grew at a pace of 0.8%, down from 1.2% in May.

The Australian stocks closed in green with the market extending an intraday bounce in last session as by resource stocks and financials gained. The commodity prices were strong today, with crude oil rising more than one dollar, keeping the Aussie export units well supported. The benchmark S&P/ASX200 Index added 38.50 points, or 0.87% to close at 4,477 points, while the All-Ordinaries Index ended at 4,503, representing a gain of 37.80 points, or 0.85%.

On the economic front, minutes of the policy board meeting of the Reserve Bank of Australia revealed that the members thought Australian economy had continued to grow at a solid rate. Employment had continued to grow solidly but consumer spending remained subdued, even though confidence was high. Business investment remained strong while the housing market had stabilized. The members continued to see the economy growing at above-average rates over the next two years.

The minutes further stated that the board felt a wait-and-watch stance was warranted, given the fall in core inflation in the June quarter. The minutes also revealed that the members felt that holding interest rates steady was justifiable given a more uncertain outlook for the global economy.

China's stocks continued to rise with the momentum being very upbeat on strong economic outlook. The markets rose for a third day after an indicator of the country's economic outlook gained in June and foreign direct investment climbed in July. The benchmark Shanghai Composite Index rose 10.19, or 0.4 percent, to close at 2,671.89. The gauge climbed 2.1 percent yesterday, the most since July 28, as increased Chinese demand for resources underscored the strength of the economy.

On economic front, China's leading economic index climbed 0.8 percent to 147.0 in June, following a revised 0.9 percent gain in May, the New York-based Conference Board's report showed today. Foreign direct investment rose 29.2 percent to $6.92 billion in July, the Ministry of Commerce also said today.

Further, the amount of foreign direct investment (FDI) that flowed into China in July rose 29.2 percent year on year to 6.924 billion U.S. dollars, a Ministry of Commerce (MOC) spokesman said today. The figure brought FDI inflows to China in the first seven months of the year to 58.35 billion U.S. dollars, an increase of 20.65 percent from a year earlier.

In Mumbai, the key benchmark indices managed to provisionally close in positive terrain after slipping into the red for a brief period in late trade. Index heavyweight Reliance Industries (RIL) edged lower in volatile trade. FMCG stocks rose. But, IT stocks fell. As per provisional figures, the BSE 30-share Sensex was up 11.02 points or 0.06% to 18,061.80. At the day's high of 18,140.15 hit in early trade the index rose 89.37 points. The index fell 24.78 points at the day's low of 18026 in early afternoon trade.

The S&P CNX Nifty was up 2.65 points or 0.05% to 5,420.95 as per provisional figures.

In other markets, the Hang Seng index in Hong Kong edged up by 0.12%, TSEC in Taiwan also dropped 0.13% and Strait Times index in Singapore slid 0.35%.

Dollar rebounded from a low of 1.2916 against the Euro. DOW futures shot up nearly 60 points following the dollar's decline. The commodity prices advanced with the crude oil futures hitting a high of $76.33 per barrel for the benchmark WTI futures in the GLOBEX trading.