Asian markets end mostly up

Overnight cues from the US markets support sentiments

Asian equity markets recorded some gains today on strong overnight cues from the US markets and ideas that the global economic worries might not be a deterrent for the risk appetite at lease for the time being as liquidity conditions remained strong. The US dollar eased in the Asian trades and the most of the indices scraped through the session positively while the Chinese shares recorded excellent gains and helped keep that the overall undertone in the regional stocks positive.



The World Bank raised its growth forecast for East Asia's developing countries Tuesday but said governments need to control rising risks from surging capital inflows and currency strains. Output has rebounded to above pre-crisis levels and regional growth should hit 8.9 percent this year, up from a previous forecast of 8.7 percent, the bank said. Last year's expansion was 7.3 percent.

"The economic recovery in East Asia and the Pacific is robust, but attention must now turn to managing emerging risks which may pose challenges to macroeconomic stability," the bank said in a twice-a-year outlook for the region's economies, excluding Japan.

Asia's rebound has attracted an influx of capital that is pushing up the value of some currencies, which might hurt exports. Some governments have intervened in foreign exchange markets to slow the rise of their currencies, raising fears of a potential "currency war" that might disrupt trade and growth.

In the US, stocks recorded moderate gains to open the week yesterday as upbeat quarterly results from Citigroup supported the sentiments. The Dow gained 80.91 points or 0.7% to close at 11,143.69.

Japanese stocks went up today on upbeat global cues and strong gains in financials, mostly banks. Japan's Nikkei 225 Stock Average added 40.96 points or 0.40 % to 9,539.45. Masayuki Oku, chairman of the Japanese Bankers Association, said today that the Japanese economy is slowing down and is about to come to a standstill due to the yen's strength and the diminishing effect of government stimulus measures.

In Australia, the markets ended mostly flat today as metal producers eased following the strengthening of the local currency gained against the US dollar. The minutes of the recent Reserve Bank of Australia policy board meeting revealed that the central bank board's decision to leave rates steady on October 5 was a "finely balanced" one. The minutes confirmed "members concluded that interest rates would need to rise at some point if the economy evolved in line with the central scenario of a gradual tightening in resource utilization. The benchmark S&P/ASX200 Index added 3.80 points, or 0.08% to close at 4,656 points, while the All-Ordinaries Index ended down with a gain of 3.90 points or 0.08% to close at 4,727.

In China, stocks went up after a tepid outing in the last session on the expectations of sustained economic growth and ideas that the tensions between US and China pertaining to the currency rate could be abating slightly ahead of the upcoming G20. China's U.S. Treasury holdings rise in August for the second month. China plans to restrict exports of rare earth minerals. Shanghai stocks rallied in the afternoon session pushing the benchmark index past the 3,000 for the first time since April. The Shanghai Composite index gained 46 points or 1.58% to close at 3001.85.

In Mumbai, a liquidity squeeze due to the Coal India's Rs 15,000-crore initial public offering and fears that the RBI may stem rupee rise weighed on the Indian market. The 30-share Sensex closed down 186 points or 0.92% at 19,983, with 24 of its components edging lower. The broader Nifty lost nearly 50 points or 0.80% to close at 6,027.

In other markets, the Hang Seng index in Hong Kong added 1.25%, the Straits Times index in Singapore rose 0.35% while the TSEC index in Taiwan dropped 0.18%.