Asian Markets Rallied As Crude Oil Continues Its Retreat
The
Asian stock markets rallied on bargain hunting following positive
sentiments generated by Wall Street's biggest one-day gains since 1
April overnight and a steep fall in oil prices for a second day.
Financial stocks rebounded as credit worries eased, following
surprisingly strong results from the U.S. bank Wells Fargo. But the
resources sector was lower following weaker commodity prices. On the
Wall Street, the Dow jumped 2.52% to 11,239.28, the broader S&P 500
gained 2.51% to 1,245.36 and the Nasdaq surged 3.12% to 2,284.85.
Crude
oil prices fell $4.14 to settle at $134.60 a barrel on the New York
Mercantile Exchange after data released by the U.S. Energy Department
showed that domestic inventories of crude oil and gasoline rose last
week, rather than declining as analysts had expected. Crude oil is
currently down 41 cents at $134.19 a barrel in Asian trade Thursday.
On
the currency front, the U.S. dollar recovered to lower 105-yen range in
early Tokyo deals from lower 104-yen levels late Wednesday. In Asian
currency trading, the U.S. dollar bought 104.82 yen recently, compared
with 105.03 yen late in New York. In South Korea, the U.S. dollar
opened lower at 1,007.5 won compared to previous day's close of 1,009.3
won. The Australian dollar has opened weaker at US$0.9746-0.9749 and
the kiwi held on to its overnight gains and was buying US$0.7715 in
early local trade.
The Japanese market closed higher after a
mixed performance on yesterday. Wall Street's rally overnight following
a sharp decline in oil prices boosted market sentiment. However,
concerns over the dollar's weakness against the yen. The banking sector
rallied after the U.S. bank Wells Fargo reported better-than-expected
quarterly numbers, but oil-related stocks lost ground.The benchmark
Nikkei 225 index gained 1.0% to finish at 12,887.95. The broader Topix
index gained 1.15% at 1,263.65.
On the economic front, the
Finance ministry said that foreign residents were net sellers of
Japanese stocks last week. The dumped shares in favor of bonds.
Foreigners were net sellers of 242.4 billion yen worth of Japanese
stocks for the week ended July 12, the third week of net stock selling.
Meanwhile, foreigners were net purchasers of 528.2 billion yen in Japan
bonds and notes during the week, the second straight week of net
acquisition.
Meanwhile, a final report from the Japanese Cabinet
Office showed that the leading index stood at 92.9 in May, up from an
initial estimate of 92.6 and 92.8 recorded in April. The coincident
index also showed an improvement from its initial estimate. The index
recorded a reading of 103.3, an increase from 103 reported earlier. It
was also up from 101.7 registered in April. However, the lagging index
decreased to 103.4 from 103.7 seen in April.
China's Shanghai
Composite Index posted modest losses, lagging a sharp regional advance,
after data showed wholesale inflation and factory investment remain
elevated, likely leaving policy makers few options on a tightening bias.
The benchmark Shanghai Composite Index closed down 0.8% at 2,684.78 extending yesterday?s fall of 2.7%.
According
to the data released by the National Bureau of Statistics Bureau showed
producer prices rose a faster-than-expected 8.8% in June, up from 8.2%
in May. The pace of gains in consumer prices eased somewhat, with the
CPI rising 7.1% in June on year, down from a 7.7% in May and 8.5% in
April.
First-half gross domestic product climbed 10.4% from a
year earlier, easing from an 11.9% expansion in 2007. The consumer
price index rose 7.1% in June from a year earlier, easing from a 7.7%
rise in May and 8.5% in April.
In Hong Kong, the Hang Seng Index
increased 2.4% to 21,734.72, while the Hang Seng China Enterprises
Index zoomed up 2.9% to 12,056.56.
The Australian stock market
closed higher. The market started off on a firm note and extended its
gains for the second straight session after Wall Street rallied
overnight following a steep fall in crude oil prices for a second day.
The resources stocks fell on weak commodity prices. The benchmark
S&P/ASX 200 index closed up 0.6% at 4,901.0 and the broader All
Ordinaries index also gained 0.6% to finish at 4,991.4.
On the
economic front, Australia's international merchandise imports totaled
A$17.527 billion in June, down from a revised A$18.191 billion in May,
according to the Australian Bureau of Statistics. The bureau also said
preliminary analysis showed that goods imports on a balance of payments
basis fell by 2% in seasonally adjusted terms between May and June.
The
data, included in the Reserve Bank of Australia monthly bulletin,
showed that the central bank sold a net A$875 million in the spot
foreign exchange market in June. The central bank also bought a net
A$993 million from the government during the month. The Reserve Bank's
spot foreign exchange market transactions in May amounted to net sales
of A$336 million.
The South Korean market closed higher, ending
a three-day losing streak. However, the market came of the day's highs
amid caution ahead of the release of quarterly earnings by major U.S.
investment banks later in the day. The benchmark Korea Composite Stock
Price Index closed up 1.2% at 1,525.56, off a day's high of 1,546.84.
The key index rebounded following a nearly 4% decline over the previous
three days
On the economic front, Korea Automobile Importers and
Dealers Association said that sales of imported cars in South Korea
jumped 31.2% from a year earlier in the first half of this year,
despite weaker consumer sentiment.
The New Zealand market closed
higher extending yesterday's gains. The market started off on a firm
note as Wall Street's rally overnight, following a sharp decline in oil
prices for a second consecutive session, encouraged investors to look
for bargain buys. The benchmark NZX 50 index closed up 1.04% at
3,091.38, after adding 0.6% on Wednesday.
The Indian market is
trading firm after opening sharply higher in the morning. A sharp
plunge in the price of oil for a second day and positive global cues
triggered buying interest, but traders are expressing caution ahead of
the release of inflation data today.
After opening sharply
higher at 12,909, the BSE Sensex rose to an intra-day high of 13,099
within a few minutes. The Sensex pared its gains closing at 13,111.85,
up 536 points or 4.26% over the previous day's close. Meanwhile, the
S&P CNX Nifty is up 130 points or 3.42%.
Elsewhere, Taiwan's weighted index spiked 3.9% to 6,974.51, while Singapore's Straits Times Index added 1% to 2,864.10.
Turning
toward European markets, jumped higher with investors taking heart from
a continued retreat in oil prices and moving back into recently
battered sectors such as the banks. In the opening trade, the U.K. FTSE
100 index climbed 1.7% to 5,238.90, the German DAX 30 index rose 1.5%
to 6,245.20, and the French CAC-40 index advanced 1.6% to 4,178.23.
On
the economic front the day is scheduled to release construction output
for the Eurozone, which will be followed by ZEW economic survey for the
Switzerland. From US we have building permits, which will be followed
by the continuous and initial jobless claims. In the evening we have
housing starts accompanied by Philadelphia Fed?s manufacturing survey.
From Canada the Bank of Canada will release its monetary policy report,
which will be preceded by the data on the foreign investment in
Canadian securities.
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