Steady Gains For Asia

Risk appetite flips back in the markets on steady US cues

Asian markets witnessed steady gains today, following the US markets higher as the risk appetite flipped back in the markets and commodities stabilized. After sell-off in the previous session, the investors picked some of the offerings today though the pace of gains was limited. European debt concerns eased a wee-bit following solid demand for Portugal's bonds in the previous session. In overnight trades, US stocks rose by solid margins amid some relief buying following news of slower US economic recovery as seen by the Federal Reserve and solid demand for Portugal's bond offerings. The Dow gained 46.32 points or 0.4 percent to end at 10,387.01.



The twelve Fed districts have seen widespread signs of a deceleration in the pace of economic growth in recent weeks, though the national economic activity has continued to expand, noted the US Federal Reserve's latest Beige Book report. The Federal Reserve also stated that modest economic growth was the most common characterization of overall conditions in the period from mid-July through the end of August.

The Japanese stocks closed in green today as the global sentiments improved on the back of a positive close for US stocks and the psychological support provided by the 9k mark for the benchmark Nikkei 225 Index. The Japanese yen also depreciated slightly from continuing its strength against the US dollar, lifting market sentiment. The benchmark Nikkei 225 Index added 73.79 points or 0.82% to 9,098, while the broader Topix index of all First Section issues gained 5.85 points, or 0.71%, to 827.

On the economic front, results of a survey conducted by the Cabinet Office in Japan stated that consumer confidence fell in August to 42.5 from 43.4 in July. The data further noted that households' consumer sentiment also deteriorated in August, to 42.4. Among the sub indicators of households' consumer confidence, the index for overall livelihood slipped slightly to 43 from 43.2, while the income growth index stagnated at 41.5. The reading for employment came in at 40.1, down from 41.8 in July.

The Australian stocks closed with strong gains, buoyed by a surge in jobs numbers and the overall gains in Asian markets. The benchmark S&P/ASX200 index was up 45 points, or 1%, at 4582.2, while the broader All Ordinaries index added 43 points, or 0.9 %, to 4621.3.

In India, Momentum-based fund buying in heavyweight stocks and positive cues from global markets following a successful bond auction in Europe lifted the Indian market notably higher on Thursday ahead of the holiday weekend. Meanwhile, the market shrugged off data that showed food inflation rose for a second consecutive week.

India's food inflation accelerated to 11.47% in late August versus 10.86% during the previous week, on the back of increase in prices of cereals, fruits, vegetables and milk, data released on Thursday showed, adding pressure on the Reserve Bank of India to raise interest rates at its review next week. The fuel price index rose an annual 12.71% during the week under review.

Despite a bout of volatility, the 30-share BSE Sensex managed to rise about 133 points or 0.71% to 18,800, with 18 of its components ending in the green. The broader Nifty climbed 32 points or 0.57% to 5,640. In the broader market, gaining shares outpaced declining ones by 1571 to 1365 shares on the BSE.

Chinese stocks extended their drop from four-month highs, shedding more than one percent to a one-week closing low. The Shanghai Composite Index closed at 2,656.4, down 1.40% on the day as markets failed to hold on to rallies to 2700 points mark.

In Mumbai, the key benchmark indices cut gains, soon after hitting fresh 31-month highs in late trade. The BSE 30-share Sensex was provisionally up 118.39 points or 0.63%, up about 115 from the day's low and off close to 35 points from the day's high. Banking, realty, tea, consumer durables and capital goods stocks rose. Data showing sustained buying of Indian stocks by foreign funds and good monsoon rains, underpinned sentiments. As per provisional figures, the BSE 30-share Sensex was up 118.39 points or 0.63% to 18,785.10. The index rose 156.46 points at the day's high of 18,823.17 in late trade, its highest level since 4 February 2008. The index rose 2.41 points at the day's low of 18,669.12 in early trade.

In other markets, the Hang Seng index in Hong Kong edged up 0.37%, Straits Times in Singapore added 036% while the TSEC in Taiwan slid 0.20%. Crude oil consolidated around $75 per barrel levels. Gold was also little changed around $1260 per ounce mark.