Asian markets joyous after G20

Most indices gain after global finance ministers and central bankers note that a global economic recovery is under way at an uneven pace

Asian markets mostly went up today, cruising higher as the renewed wave of risk appetite pushed up the commodities and traders eyed the latest G20 statement. The much awaited talks of the G20 meet in South Korea ended yesterday and the Group of 20 finance ministers and central bankers noted that a global economic recovery is under way but uneven, and warned of the need to move toward more “market-determined” currency exchange rates. Growth has been strong in many emerging-market economies, but the pace of activity remains modest in many advanced economies, noted the G20 in a joint communiqué. Dollar slipped following this, as traders eyed for a definite turn towards the much anticipated quantitative easing in the next meet of US Fed.



Japanese stocks went up modestly but failed to hold onto gains and ended lower on the day as the massive gains in the Japanese Yen took the pace of the stocks despite an increase in the country's exports. The yen strengthened to a 15- year high against the dollar, breaking under the key 80 per US dollar levels. The Bank of Japan, which holds a policy meeting this week, may have to ease monetary policy further if the US Fed engages in further quantitative easing to boost growth, adding to the dollar's decline. The country's exports went up 14.4% in September from a year earlier, but were lower compared to a nearly 16% growth in the previous month. This pressurized the stocks and the Nikkei 225 average eased 25.55 points or 0.27% to close at 9401.16 points.

The Australian equities rose though, witnessing good buying as the resource oriented issues gained and investors eyed the media reports stating that the Singapore stock exchange (SGX) has unveiled a multi-billion dollar bid for the company that owns the Australian Stock Exchange (ASX) in Sydney. If approved, the $8.3bn takeover would mark the first stock exchange merger in the Asia Pacific region. The ASX 200 Index added 1.33% or 61.8 points to close at 4,710.0 after hitting a five-month high of 4,725.9.

Treasurer Wayne Swan told parliament Monday that Australia would benefit from an agreement among G-20 finance ministers to refrain from currency devaluation war. Meanwhile, the country's producer price index (PPI), increased at their fastest quarterly pace since December 2008, according to updates from the Australian Bureau of Statistics. The PPI increased 1.3% in the quarter from a year ago quarter according to the ABS.

In China, the buying frenzy continued as investors eyed strong commodity prices and the recent tightening moves from the central bank was fully priced in. The 25 basis points hike by the People's Bank of China seemed to have augured as a necessary factor from the point of view of controlling inflation and prevent an asset-price bubble. The benchmark Shanghai Composite Index soared 76.37 points or 2.57% to close at 3051.41- its six week high.

In Mumbai, the key benchmark regained strength in mid-afternoon trade, as world stocks rose. The market breadth was strong. Except the BSE FMCG index, all the other sectoral indices on BSE were in the green. High beta metal and realty stocks rose. Index heavyweight Reliance Industries came off the day's high. FMCG major Hindustan Unilever rose as Q2 net profit surged. By the close, the benchmark BSE Sensex rose 0.68% to 20303 points while the NSE Nifty gained 0.66% to 6105 points.

In other markets, the Hang Seng index in Hong Kong gained 0.47%, the Straits Times index in Singapore edged up by 0.27% while the TSEC index in Taiwan soared by 1.70%. Dollar lost a little after rising to two-week highs against the Euro yesterday and hovered above 1.4000. Crude futures surged to a high of $82.99 per barrel and slipped. The counter currently trades at $82.62 per barrel, up 93 cents from the previous close. Gold rallied by more than 20 dollars to top highs near $1350 an ounce and currently holds around 1345 per ounce.