Mixed outing for Asia

Lack of major cues from overnight trades, China inflation moderates

The Asian equities had a mixed outing today, not being able to draw a clear path though a slight moderation in the Chinese inflation data helped keep the losses limited. Most developed economies will grow at a steady pace in the months ahead, though growth in Italy and China appears to be slowing, according to a latest economic indicator released from the Organization for Economic Cooperation and Development yesterday.



The OECD stated that its composite leading index designed to anticipate turning points in economic activity relative to trend, continue to point to expansion in most major OECD countries. However, the OECD also noted that the index for major five Asian nations, namely China, India, Indonesia, Japan and Korea, fell slightly by 0.1 point to 101. New data for China point to a downturn, reversing the tentative signs of regained growth momentum reported in last month's assessment.

The overnight cues failed to provide major cues for the Asian equities. The world equities were mixed with the US stocks ending almost unchanged on the day. There were no major economic reports today, but President Obama revealed his budget, stating that he would cut the deficit by $1.1 trillion over the next 10 years, though the Republicans said it did not curb spending deeply enough. William Dudley, President of the New York Federal Reserve defended the Fed's $600 billion bond buying program, saying that quantitative easing stimulated economic activity after soft patch in the middle of 2010.

Markets in Asia started on a lax note on these cues and investors primarily awaited for the Chinese price data. The Japanese market gained after the Bank Of Japan kept its benchmark interest rate unchanged at virtually zero and also kept the size of its asset purchase program unchanged at 5 trillion yen ($60 billion). This helped the stocks rise modestly and the benchmark Nikkei 225 Index added 21.13 points, or 0.2% to close at 10,746.67 – rising for a second day.

In Australia, the markets dropped after recording sharp gains in the previous session as financials eased and other regional markets offered little help. The minutes of the Reserve Bank of Australia's February 1 Monetary Policy Meeting, revealed that the RBA governors felt this month that a "slightly restrictive" monetary policy remains appropriate. The benchmark S&P/ASX200 Index shed 4.80 points, or 0.10% to end at 4,931.00 points.

In China, the markets gathered decent gains after the consumer prices rose 4.9%, slightly less than expected. Though the surge was bigger than December's 4.6% rate, it still marked a deceleration from November's 28-month high of 5.1%. China has hiked interest rates three times since October to cool rapid economic growth and tamp down inflation and even as further rate hikes are a given, the modest downward bias in the consumer prices is a welcome thing from the point of view of the policymakers. The Shanghai Composite index closed virtually unaltered at 2899 points today, after hitting its three-month highs earlier in the day.

In Mumbai, intraday volatility remained high as key benchmark indices trimmed gains in late trade. The market breadth, indicating the health of the market, was positive. Index heavyweights Reliance Industries (RIL) jumped nearly 3%. As per provisional figures, the BSE 30-share Sensex was up 65.09 points or 0.36% to 18,267.29. The index rose 159.46 points at the day's high of 18,361.66 in mid-afternoon trade, its highest level since 4 February 2011.

In other markets, the HangSeng Index In Hong Kong dropped nearly 1%, reversing its gains in the last session. The Strait Times Index In Singapore also dropped 0.77% while KOSPI Index in South Korea edged lower by 0.20%. Gold soared in afternoon trades, adding massive gains as the buying interest picked up and made the commodity extend its run from a four month lows. COMEX Gold futures for April are quoting at $1373.90, up $8.80 per ounce from the previous close.