09 Jul 2008 | 15:38
Asian Markets Follows Wall Street With Strong Gains
The
stock markets across the Asian were trading sharply higher after Wall
Street rebounded overnight following reassuring comments from U.S.
Federal Reserve chairman Ben Bernanke and a steep fall in crude oil
prices for a second consecutive session.
In the energy markets,
the August light crude oil contract added 96 cents to $137, after
tumbling $5.33 a barrel on a strengthened dollar and a broad sell-off
in commodities.
Light, sweet crude for August delivery fell
$5.33 to settle at $136.04 on Tuesday, following a $3.92 slide on
Monday. In Asian trade Wednesday, oil is presently up 20 cents at
$136.24 a barrel.
In currencies, the greenback changed hands for 107.56 yen, compared with 107.62 yen.
Coming
back to equities, Shanghai-listed stocks soared, lifting China-related
shares in Hong Kong, as investors sought bargains after steep recent
losses and speculated that the mainland government might act to support
the market.
The rest of the region also advanced on the back of
financials after U.S. stocks jumped overnight. Some exporters in Tokyo
and Seoul declined in late trading; giving up early gains, as the U.S.
dollar briefly weakened after Iran's state-owned television Al-Alam
reported on its Website that Iran had test-fired a 1,250-mile-range
missile.
In Tokyo, the Nikkei 225 Average finished 0.2% higher
at 13,052.13, coming off the day's high at 13,284.65, while the broader
Topix rose 0.2% to 1,285.53.
On the economic front a
better-than-expected increase in core machinery orders also added to
the positive sentiment. The data released showed that Japanese core
machinery orders rose a seasonally adjusted 10.4% in May from April.
Unadjusted core orders also rose 5.1% on year compared to market
expectation for a 3.7% decline.
Meanwhile, the Conference Board
said that the leading economic index for Japan decreased 1.2% in May.
The private sector agency also said that its coincident index for Japan
fell 0.3% in the same month.
China's Shanghai Composite jumped
3.8% to 2,920.55, and helped lift the Hang Seng China Enterprises Index
4.8% to 11,834.31. The benchmark Hang Seng Index advanced 2.8% to
21,805.81.
In afternoon trading, India's Sensitive Index, or
Sensex, jumped 4.5% to 13,953.66 and the broader S&P/CNX Nifty
gained 4.1% to 4,152.40.
On the economic front, the ministry of
commerce and industry said in a report that output in six core
infrastructure industries grew at a slower pace of 3.5% year-on-year in
May, compared with 7.8% in the previous year and 3.6% recorded in April.
Among
the six industries, crude oil production registered an annual growth of
3.2% in May, reversing a 1.6% fall in the previous year. Petroleum
refinery production grew 0.1% over the previous year, significantly
slower than 14.9% seen in the year before.
Coal production rose
8.3%, better than 0.5% increase in the prior year. Electricity
generation registered 2% growth versus 9.3% and cement production rose
3.8% compared to 9.9%. Finally, production of finished steel grew 5.2%,
slower than 8.4% in May 2007.
The official report showed that
six core infrastructure industries registered a growth of 3.5% during
April-May 2008-09 versus 6.9% during the corresponding period of the
previous year
There was a series of economic news from South
Korea, which kept market busy. The Bank of Korea said in a report that
the producer price index, or PPI, rose 10.5% year-on-year in June. In
May, producer prices were up 9%. The current growth pace is the fastest
in more than nine years. Meanwhile, the money supply growth also eased
to 14.2% year-on-year in May. The growth slowed from 14.6% reported in
April. Liquidity aggregates of financial institutions also increased at
a slower pace of 13.1% in May.
In another economic release South
Korea's retail sales increased 10.2% year-on-year in May. In April,
retail sales increased 10.6%. Retail sales accounted for KRW21.6
trillion, compared with KRW19.6 trillion in the previous year. The
statistical office said rising fuel and commodity prices led to an
increase in retail sales.
Taking a cue from the economic data, the Kospi fell 0.9% to 1,519.38, retreating from a high of 1,563.07.
In
New Zealand, the market closed higher extending yesterday?s 1.2% gains.
After opening higher, the market traded in positive territory for the
entire trading session, but gave away some of the gains going into
close of the trading session. New Zealand's NZX 50 index added 0.5% to
3,177.46 as the Real Estate Institute of New Zealand is set to issue
its report on house sales for the year to June. The data for May showed
a sharp 52.9 percent decline.
Australia's S&P/ASX 200 gained
1.6% to 5,011.90. On the economic front, consumer sentiment index in
Australia fell to 79.0 for July, its lowest level in 16 years,
according to the latest survey by the Westpac Banking Group and
Melbourne Institute. The survey's index reading declined 6.7% from June.
Additionally,
look ahead the day is scheduled to release housing finance data for
May. The April report showed a 3.0% decrease in home loans and a 1.4%
increase in investment lending.
Taiwan's weighted index slipped 0.1% to 7,048.25 while the Straits Times Index rose 1.1% to 2,917.62.
In Malaysia the stock markets posted some gain despite some adverse economic news.
The
Kuala Lumpur composite index posted a gain of 1.7% closing at 1,139.81.
On the economic arena, the Governor of Bank Negara Malaysia expects
consumer price inflation is expected to exceed 6% in June due to fuel
price hike. Delivering a keynote address at the Banking Industry
Seminar in Kuala Lumpur, the central bank governor said, Domestic
inflation is expected to remain elevated for the remaining part of this
year and early next year, it is expected to moderate in the second half
of 2009.
Malaysia had raised petrol prices by 40.6% and hiked
diesel prices 63.3% in June to control rising subsidiary bill. In
addition, the government had increased electricity tariffs to 18% for
households and an average of 26% for some commercial and industry users
in the beginning of July.
Further, the central bank governor
said that the Malaysia economy continued to register strong growth
despite the more challenging external environment and increased
uncertainties in the international financial markets. Adding further he
stated that the economy has been on a steady growth path averaging
about 6% in the recent three years. In 2007, the economy expanded by
6.3% and has continued to register a strong growth in the first half of
2008.
The advance in financial shares came after Federal Reserve
Chairman Ben Bernanke said the U.S. central bank is considering
extending the time frame for brokerages to tap the central bank for
emergency funds beyond 2008.
On Wall Street, the Dow Jones
Industrial Average rose 152.25 points to 11,384.21 and the S&P 500
index added 21.39 points to 1,273.70, while the Nasdaq Composite index
advanced 51.12 points to 2,294.44.
Stocks in Europe registered a
gain, continuing a week of see-saw action for equity markets, with
financials recouping a bit to lead the advance.
On a national
level, the U.K. FTSE 100 index rose 0.6% to 5,471.60, the German DAX 30
index advanced 0.6% to 6,344.28 and the French CAC-40 index rose 0.7%
to 4,305.8
On the economic front, German construction price
index for new residential buildings rose 3.2% year-over-year in May
compared to a 3% rise in February. During this period, the price index
moved up 3.5% for office buildings and 3.7% for industrial buildings.
Compared with February, the price index for residential buildings
climbed 1.1% in May.
Adding further concern, Euro zone GDP
growth grew 0.7%in the first quarter from the fourth quarter, and was
up 2.1% year-on-year. The figures show a downward revision to
provisional figures reported on 3 June 2008. Eurostat provisionally put
first quarter growth at 0.8 % quarter-on-quarter and 2.2% year-on-year.
Over the first quarter, household consumption rose 0.2 percent
quarter-on-quarter and investment grew 1.6 percent. Government
expenditure was up 0.4 percent.
Looking ahead the day is
scheduled to release shop price index for United Kingdom. It will be
followed by data on mortgage application for United States. In the
evening we have EIA?s data showing the crude oil stock for the United
States. In the late evening the day will release current account
figures and domestic corporate goods price index figures for Japan.
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Asian Markets Follows Wall Street With Strong Gains
The
stock markets across the Asian were trading sharply higher after Wall
Street rebounded overnight following reassuring comments from U.S.
Federal Reserve chairman Ben Bernanke and a steep fall in crude oil
prices for a second consecutive session.
In the energy markets,
the August light crude oil contract added 96 cents to $137, after
tumbling $5.33 a barrel on a strengthened dollar and a broad sell-off
in commodities.
Light, sweet crude for August delivery fell
$5.33 to settle at $136.04 on Tuesday, following a $3.92 slide on
Monday. In Asian trade Wednesday, oil is presently up 20 cents at
$136.24 a barrel.
In currencies, the greenback changed hands for 107.56 yen, compared with 107.62 yen.
Coming
back to equities, Shanghai-listed stocks soared, lifting China-related
shares in Hong Kong, as investors sought bargains after steep recent
losses and speculated that the mainland government might act to support
the market.
The rest of the region also advanced on the back of
financials after U.S. stocks jumped overnight. Some exporters in Tokyo
and Seoul declined in late trading; giving up early gains, as the U.S.
dollar briefly weakened after Iran's state-owned television Al-Alam
reported on its Website that Iran had test-fired a 1,250-mile-range
missile.
In Tokyo, the Nikkei 225 Average finished 0.2% higher
at 13,052.13, coming off the day's high at 13,284.65, while the broader
Topix rose 0.2% to 1,285.53.
On the economic front a
better-than-expected increase in core machinery orders also added to
the positive sentiment. The data released showed that Japanese core
machinery orders rose a seasonally adjusted 10.4% in May from April.
Unadjusted core orders also rose 5.1% on year compared to market
expectation for a 3.7% decline.
Meanwhile, the Conference Board
said that the leading economic index for Japan decreased 1.2% in May.
The private sector agency also said that its coincident index for Japan
fell 0.3% in the same month.
China's Shanghai Composite jumped
3.8% to 2,920.55, and helped lift the Hang Seng China Enterprises Index
4.8% to 11,834.31. The benchmark Hang Seng Index advanced 2.8% to
21,805.81.
In afternoon trading, India's Sensitive Index, or
Sensex, jumped 4.5% to 13,953.66 and the broader S&P/CNX Nifty
gained 4.1% to 4,152.40.
On the economic front, the ministry of
commerce and industry said in a report that output in six core
infrastructure industries grew at a slower pace of 3.5% year-on-year in
May, compared with 7.8% in the previous year and 3.6% recorded in April.
Among
the six industries, crude oil production registered an annual growth of
3.2% in May, reversing a 1.6% fall in the previous year. Petroleum
refinery production grew 0.1% over the previous year, significantly
slower than 14.9% seen in the year before.
Coal production rose
8.3%, better than 0.5% increase in the prior year. Electricity
generation registered 2% growth versus 9.3% and cement production rose
3.8% compared to 9.9%. Finally, production of finished steel grew 5.2%,
slower than 8.4% in May 2007.
The official report showed that
six core infrastructure industries registered a growth of 3.5% during
April-May 2008-09 versus 6.9% during the corresponding period of the
previous year
There was a series of economic news from South
Korea, which kept market busy. The Bank of Korea said in a report that
the producer price index, or PPI, rose 10.5% year-on-year in June. In
May, producer prices were up 9%. The current growth pace is the fastest
in more than nine years. Meanwhile, the money supply growth also eased
to 14.2% year-on-year in May. The growth slowed from 14.6% reported in
April. Liquidity aggregates of financial institutions also increased at
a slower pace of 13.1% in May.
In another economic release South
Korea's retail sales increased 10.2% year-on-year in May. In April,
retail sales increased 10.6%. Retail sales accounted for KRW21.6
trillion, compared with KRW19.6 trillion in the previous year. The
statistical office said rising fuel and commodity prices led to an
increase in retail sales.
Taking a cue from the economic data, the Kospi fell 0.9% to 1,519.38, retreating from a high of 1,563.07.
In
New Zealand, the market closed higher extending yesterday?s 1.2% gains.
After opening higher, the market traded in positive territory for the
entire trading session, but gave away some of the gains going into
close of the trading session. New Zealand's NZX 50 index added 0.5% to
3,177.46 as the Real Estate Institute of New Zealand is set to issue
its report on house sales for the year to June. The data for May showed
a sharp 52.9 percent decline.
Australia's S&P/ASX 200 gained
1.6% to 5,011.90. On the economic front, consumer sentiment index in
Australia fell to 79.0 for July, its lowest level in 16 years,
according to the latest survey by the Westpac Banking Group and
Melbourne Institute. The survey's index reading declined 6.7% from June.
Additionally,
look ahead the day is scheduled to release housing finance data for
May. The April report showed a 3.0% decrease in home loans and a 1.4%
increase in investment lending.
Taiwan's weighted index slipped 0.1% to 7,048.25 while the Straits Times Index rose 1.1% to 2,917.62.
In Malaysia the stock markets posted some gain despite some adverse economic news.
The
Kuala Lumpur composite index posted a gain of 1.7% closing at 1,139.81.
On the economic arena, the Governor of Bank Negara Malaysia expects
consumer price inflation is expected to exceed 6% in June due to fuel
price hike. Delivering a keynote address at the Banking Industry
Seminar in Kuala Lumpur, the central bank governor said, Domestic
inflation is expected to remain elevated for the remaining part of this
year and early next year, it is expected to moderate in the second half
of 2009.
Malaysia had raised petrol prices by 40.6% and hiked
diesel prices 63.3% in June to control rising subsidiary bill. In
addition, the government had increased electricity tariffs to 18% for
households and an average of 26% for some commercial and industry users
in the beginning of July.
Further, the central bank governor
said that the Malaysia economy continued to register strong growth
despite the more challenging external environment and increased
uncertainties in the international financial markets. Adding further he
stated that the economy has been on a steady growth path averaging
about 6% in the recent three years. In 2007, the economy expanded by
6.3% and has continued to register a strong growth in the first half of
2008.
The advance in financial shares came after Federal Reserve
Chairman Ben Bernanke said the U.S. central bank is considering
extending the time frame for brokerages to tap the central bank for
emergency funds beyond 2008.
On Wall Street, the Dow Jones
Industrial Average rose 152.25 points to 11,384.21 and the S&P 500
index added 21.39 points to 1,273.70, while the Nasdaq Composite index
advanced 51.12 points to 2,294.44.
Stocks in Europe registered a
gain, continuing a week of see-saw action for equity markets, with
financials recouping a bit to lead the advance.
On a national
level, the U.K. FTSE 100 index rose 0.6% to 5,471.60, the German DAX 30
index advanced 0.6% to 6,344.28 and the French CAC-40 index rose 0.7%
to 4,305.8
On the economic front, German construction price
index for new residential buildings rose 3.2% year-over-year in May
compared to a 3% rise in February. During this period, the price index
moved up 3.5% for office buildings and 3.7% for industrial buildings.
Compared with February, the price index for residential buildings
climbed 1.1% in May.
Adding further concern, Euro zone GDP
growth grew 0.7%in the first quarter from the fourth quarter, and was
up 2.1% year-on-year. The figures show a downward revision to
provisional figures reported on 3 June 2008. Eurostat provisionally put
first quarter growth at 0.8 % quarter-on-quarter and 2.2% year-on-year.
Over the first quarter, household consumption rose 0.2 percent
quarter-on-quarter and investment grew 1.6 percent. Government
expenditure was up 0.4 percent.
Looking ahead the day is
scheduled to release shop price index for United Kingdom. It will be
followed by data on mortgage application for United States. In the
evening we have EIA?s data showing the crude oil stock for the United
States. In the late evening the day will release current account
figures and domestic corporate goods price index figures for Japan.
Visit site at – http://investorline.co.in/
Newsroom - http://newsroom.investorline.co.in/
Learning Center- http://learning.investorline.co.in/
Mutual funds - http://mutualfunds.investorline.co.in/
Life Insurance - http://insurance.investorline.co.in/
Investor Journal - http://research.investorline.co.in/
Newscatcher- http://forums.investorline.co.in/
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