Asia-pacific stockmarket ends modest higher on improve risk appetites

Hopes of positive news from Greece front plays role

Most of Asia-pacific market ended modest higher on Wednesday, June 29, 2011, as risk hunger investors chased for bargain, thanks to positive rally on the European and United State equity market overnight, stronger commodity prices, and amid optimism over the Greece vote later in the day as well as China Premier Wen's speech on a possible increase of investment in European debt

Buying appetite continued for riskier equities on growing expectations that the Greek lawmaker will approve the austerity measures aimed as preventing a default as well as news that German banks have agreed in principle to roll over about $10 billion in Greek government debt. A vote on the package is scheduled for Wednesday and a vote on the implementation legislation for Thursday.



For surviving of Greece's from default, cash-strapped nation must approve deep austerity plan and asset sales, so that to secure next installment of its 110 billion euros bailout package from the European Union and the International Monetary Fund. Lawmakers also need to pass an implementation law, which provides the technical details of how the five-year plan will be applied, by June 30. Failure to pass Papandreou's 78 billion-euro plan may lead to the euro area's first sovereign-debt default.

Back to equity market, Japan's benchmark Nikkei Stock Average amplified 1.54% while broader Topix index escalated 1.66%, as investors chased for bottom hunting across the board, powered by positive weakening yen against the euro and the US dollar and on news that nation's industrial production rose for a second straight month in May.

The Ministry of Economy, Trade and Industry said on Wednesday that the preliminary industrial production index rose 5.7% from April to a seasonally adjusted 88.8 (2005=100) in May. In April, production was up 1.6%. The ministry forecast factory output to rise 5.2% in June and 0.5% in July.

In Australia, the benchmark All Ordinaries index jumped 1.25% and the S&P/ASX200 index climbed 1.23% on Wednesday, June 29, 2011, as risk hunger buying across counters. Most sectors ended in the black with the energy and mining stocks paving the way higher for the broader market.

India's 30-scrip sensitive index of the Bombay Stock Exchange (BSE) closed 1.14% higher from previous close, extended gains for fourth consecutive session,

The Chinese bourses however took a back gears, with the Shanghai Composite index down 1.1%, registered first fall in seven consecutive day, as investors booked profit after the benchmark accumulated 5.3% gains in past six sessions and expectations that China might soon hike interest rates after the central bank raised the yield on its one-year bills Tuesday.

Among other Asia-pacific bourses, the key benchmark indices in Indonesia, Singapore, South Korea and Taiwan were up by between 0.44% to 1%. New Zealand fell 0.76%. Hong Kong's Hang Seng was flat.

On the commodity front, Base metals ended higher on Tuesday, in a wake of stronger euro against the greenback and amid expectations for Greece's parliament voting in favor of austerity measures.

Appetite for base metals further underpinned by weakening US dollar against major currency basket, giving more buying power for investors. Greenback fell against the euro and other majors on expectations that Greece would approve an austerity plan to secure financial aid and avoid a debt default.

Euro sentiment was also buoyed by hawkish comment by European Central Bank President Jean-Claude Trichet. He said that policymakers were in “strong vigilance mode”, boosting expectations that the ECB would raise interest rate again next month.

At LME, the Three-month-delivery copper ended higher by $19, or 0.2% at $9020 a metric ton. Among other traded metals at LME lead ended higher by 0.3% to $2,566 a ton and nickel rose by 2.06% to $22,505 a ton. Aluminum rose by 0.5% to end at $2,512 a ton, and zinc fell by 0.02% to end at $2,254.5 a ton.

At Comex, the Copper futures for most active July contract settled higher by 0.04 cent or 1% at $4.092 a pound on Tuesday, 28 June 2011.

Crude oil futures prices surged 2.5% from four-month lows overnight on the back of weaker US Dollar. Light, sweet crude for August delivery settled up $2.28, or 2.5%, at $92.89 a barrel on the New York Mercantile Exchange.