Wall Street Gains Lift Sentiments In Asia

Markets end mostly higher as risk aversion stays in place

Asian stocks mostly gained today, adding to the yesterday's upside nudge. Sentiments were lifted by smart gains on Wall Street in the previous session. Strong manufacturing data from China and the United States revived risk appetite. Asian auto sales soared in August while US auto sales, though plummeted at a seven month low, were not as bad as were feared by the markets. The US markets logged substantial gains as data showing a pickup in manufacturing activity in both the U.S. and China recharged some hopes of a continued economic recovery. The Dow shot up by 254.75 points or 2.5% to 10,269, adding gains throughout the day.



The US Manufacturing activity expanded at a faster pace in August, according to a report released by the Institute for Supply Management yesterday. The ISM said its index of activity in the manufacturing sector rose to 56.3 in August from 55.5 in July. A reading above 50 indicates growth in the sector. An acceleration in the pace of production growth contributed to the improvement in the sector, with the production index rising to 59.9 in August from 57.0 in July. Employment growth in the manufacturing sector also showed a radical increase compared to the previous month, according to the report. The employment index rose to 60.4 in August from 58.6 in July.

The Refinance Index increased 2.8 % from the previous week and is at its highest level since May 1, 2009 or 15-month highs, according to the Weekly Mortgage Applications Survey for the week ending August 27, 2010 from the Mortgage Bankers Association (MBA), calming the worries on the housing front somewhat. .
The Japanese stocks gained for the second successive day on upbeat US cues and ideas that a break above 9k area on the benchmark Nikkei 225 Index would set the stage for more gains in market. The benchmark Nikkei 225 Index added 135.82 points, or 1.5%, to 9063 while the broader Topix index of all First Section issues gained 8.02 points, or 1.0%, to 819.

On the economic front, a statement released by the Bank of Japan revealed that the monetary base in the country rose 5.4% year-over-year in August, standing at 98.399 trillion yen, following a 6.1% annual increase in July. The report further noted that on seasonally adjusted basis, the monetary base shed 4.2% on year to 99.474 trillion yen in August.

The Australian stocks closed in green, as a surge in commodity prices prompted plenty of buying in the index linked counters. The benchmark S&P/ASX200 Index rose 37.00 points, or 0.82% to close at 4,533 points, while the All-Ordinaries Index ended at 4,563, adding 36.20 points, or 0.80%.

On the economic front, a report released by the Australian Bureau of Statistics revealed that the country's trade surplus for July unexpected compared to the previous month, largely due to lower exports of commodities such as coal, iron ore and non-monetary gold. The trade balance showed a surplus of A$1.9 billion in July compared to the A$3.4 billion surplus in the previous month.

Light sweet crude oil futures for October delivery ended at $73.82 a barrel in electronic trading, down $0.09 per barrel from previous close at $73.91 a barrel in New York on Wednesday.

Chinese stocks rallied, led by automakers over news that auto sales in China rebounded in August from one year earlier. The benchmark Shanghai Composite Index went up 32.90 points, or 1.25 percent to closed at 2,655.78. The Shenzhen Component Index expanded 146.41 points, or 1.29%. China's vehicle sales soared 55.7% in August from a year earlier, boosted by Beijing's new subsidies scheme for energy-saving vehicles, according to media updates. Vehicle sales in the world's largest auto market rose to 1.22 million units in August according to the China Automotive Technology and Research Centre.

In Mumbai, stocks rallied in tune with the global markets though the momentum abated in the afternoon trades as the European bourses slid lower from an impressive start and the US dollar rose against the Euro. The benchmark BSE SENSEX hit a high of 18355 but failed to hold onto these gains and closed at 18238.31, up 32.44 points or 0.18%. The rise in Auto and Consumer durable was countered by a sell off in IT stocks.

In other markets, the Hang Seng index in Hong Kong added 1.20%, TSEC in Taiwan jumped 0.69% while the Strait Times index in Singapore edged up 0.13%. The crude oil prices eased in Asia after gaining sharply in the last session in tune with the US stocks. TI Crude closed up $1.99, or 2.77%, to settle at $73.91 after hitting a high of $74.48. The prices are currently trading at $73.65, down 26 cents on the day