20 Aug 2008 | 16:05
Asian Markets Rebound As Shanghai Surged By 7.6%
The
stock markets across the Asian region closed on a mix note after Wall
Street fell for a second day on inflation worries, continued weakness
in the financial sector and a rebound in crude oil prices. On Wall
Street, the Dow Industrials lost 1.14%, the broader S&P 500 dropped
0.93% and the tech-heavy Nasdaq fell 1.35%. The Labor Department
released its report on wholesale price inflation in the month of July,
showing that prices increased by much more than expected due in part to
a continued increase in energy prices.
Asian financial stocks
were weak, but resources were higher on stronger commodity prices. Oil
prices rebounded, jumping back above $114 barrel after the dollar
weakened against the euro and heating oil prices rose sharply. Light,
sweet crude for September delivery rose by $1.66 to settle at $114.53
on the New York Mercantile Exchange ahead of the expiry of the
September contract on Wednesday. In late Asian session Wednesday, oil
was up 66 cents at $115.19 a barrel by 4:08 a.m. ET.
On the
currency front, the U.S. dollar declined on profit taking following
recent rally and weakness in the U.S. stock market. The dollar traded
in the upper 109-yen levels in early Tokyo deals, down from lower
110-yen levels late Tuesday. The dollar was quoted at 110.00-110.02 yen
compared to yesterday's close of 110.00-110.03 yen in Tokyo.
However,
the Australian dollar closed firmer amid a rebound in commodity prices
and a weaker U.S. dollar. The Aussie finished the session at
US$0.8716-0.8720, up from Tuesday's close of US$0.8642-0.8645.
The
New Zealand dollar edged closer to two-week highs supported by a weaker
U.S. dollar and stronger commodity prices. The kiwi, which has lost 6%
over the past month, finished the local session at US$0.7150-0.7160,
slightly below the peak of US$0.7162 hit on Monday, compared to
US$0.7080-0.7086 late Tuesday. In the early Asian trade the kiwi was
quoted higher at US$0.7138 in early local trade.
The South
Korean won edged up against the U.S. dollar. The local unit closed at
1,049.30 a dollar; up from 1,051.80 a dollar at open as foreign
exchange authorities unloaded some of their dollar holdings to prop up
the local currency.
Coming back in equities the Japanese market
closed lower for the second consecutive trading session. After a weak
opening, tracking Wall Street's plunge overnight, the market briefly
traded in positive territory in the afternoon session as sentiment
improved following a rally in the Chinese market. The benchmark Nikkei
225 index fell 0.1% to finish at 12,851.69 and the broader Topix index
closed down 0.2% at 1,233.37.
On the economic front, Japan's
all-industry activity index dropped 0.9% on month in June, the Ministry
of Economy, Trade and Industry reported Wednesday. The decline matched
the estimates of most analysts. The index for the three months to June
rose 0.5% from the previous quarter. The ministry also said that the
index in June was 1.2% below its level a year earlier.
Meanwhile,
the Bank of Japan said in its monthly report of Recent Economic and
Financial Developments for August that the Japanese economic growth has
been sluggish. According to the central bank, high energy and material
prices and weak exports growth contributed to the sluggishness.
The
Chinese market closed sharply higher on speculation that the government
will soon undertake measures to boost the economy and the stock market.
The gains came after Chinese Vice-Premier Li Keqiang said that there
was a need to increase household incomes and rural consumption to cope
with a weakening global economy. Brokerages, property developers and
banks surged.
The benchmark Shanghai Composite Index jumped
7.6% - its largest percentage gains since late April to finish at
2,523.28. In Shenzhen, the All Share index soared 7.2% to 712.82.
On
the economic front, there was some relief for the policymakers as the
enterprise commodity price index, a measure of wholesale prices, rose
9.4 pct year-on-year in July, compared with a 9.5 pct year-on-year rise
in June. Compared with the preceding month, the index was up 0.7 pct.
The
People's Bank of China said in a statement that prices of coal,
electricity and oil products rose 26.7 pct year-on-year in July and
were 4.7 pct higher than the preceding month. Coal prices in July
surged 53.5 pct from a year earlier and were up 6.1 pct from the
previous month. Crude oil prices rose 46.8 pct year-on-year and 4.1 pct
month-on-month. Prices of electricity rose 2.9 pct year-on-year and
were up 2.7 pct compared with June.
Non-ferrous metal prices
fell 3.2 pct year-on-year and were up 0.6 pct month-on-month, while
iron ore prices rose 45 pct from a year earlier and 3.3 pct from the
previous month. Prices of steel products were up 44.1 pct year-on-year
and 0.9 pct month-on-month.
Copper prices fell 1.4 pct
year-on-year and were up 0.5 pct from June, while prices of gold rose
26.1 pct year-on-year and were up 5.4 pct month-on-month. Agricultural
product prices in July were up 6.8 pct year-on-year and were up 0.3 pct
month-on-month.
In Hong Kong, the Hang Seng China Enterprises
tracked Shanghai stocks higher to end 4.3% up at 11,179.16. The
benchmark Hang Seng Index rose 2.2% to 20,931.26.
The Australian
stock market closed higher, recouping some of yesterday's losses. The
market started off higher, and extended its gains as resources stocks
rose on stronger commodity prices. The benchmark S&P/ASX 200 index
closed up 1.3% at 4,929.5 after plunging 2.4% on yesterday. The broader
All Ordinaries index advanced 1.4% to finish at 4,997.5.
On the
economic front, a forward-looking index of Australian economic growth
declined in June to an annualized rate of 2.0%. The index, published by
Westpac Bank and Melbourne University, shrank from a reading of 2.4% in
May. The coincident index, measuring current economic activity, showed
an annualized growth rate of 2.4% in June, down from May's reading of
2.7%.
Australia's Department of Employment and Workplace
Relations said that the skilled job vacancies fell 1.7% on month in
August. The index for the month stood at 88.4.
The New Zealand
stock market closed higher, ending a two-day losing streak. The market
started off weak, but staged a strong recovery and moved into positive
terrain in late trade. The benchmark NZX 50 Index closed up 0.39% at
3,332.03 and the broader NZX All Capital Index advanced 0.47% to finish
at 3,356.37.
The South Korean market closed lower for the third
consecutive trading session on Wednesday. The market started off weak
on Wall Street's fall overnight, but recovered ground and moved into
positive territory by afternoon and finished the session slightly below
the flat line. Investors sold tech and shipyard shares, but bought
steel and chemical stocks. The benchmark Korea Composite Stock Price
Index or KOSPI declined 0.05% to finish at 1,540.71.
The Indian
market surged in mid-afternoon trade to hit new intra-day high. The BSE
30-share Sensex closed up by 0.92% to 14,678.23. Key benchmark indices
had surged in opening trade today on bargain hunting after sustained
fall in the last five successive trading sessions. Strong Asian cues
aided the recovery. The S&P CNX Nifty gained by 1.09% to 4,415.75.
Elsewhere,
Taiwan's weighted index gained 0.89% to 7,040.90 while Singapore's
Straits Times index increased by 0.86% to 2,751.75. In Malaysia the
KLSE Composite Index was up by 0.35% to 1,073.21. In Indonesia, the
Jakarta Composite increased 1.33% to 2,069.70.
In the other
part of the world, European shares edged higher from two-week lows, as
miners and oil producers advanced on the back of an up tick in
crude-oil futures and investors also dipped a toe back into the
battered financial sector.
Tracking the globe it was a similar
story around the regions in Europe following the Asian market rebound.
Of national indexes, U.K. FTSE 100 index rose 0.8% to 5,362.30, while
the French CAC-40 index climbed 0.7% to 4,362.16 and the German DAX 30
index advanced 0.4% to 6,307.02.
On the economic front, the Bank
of England released the minutes of monetary Policy meeting in which the
committee voted 7-2 to keep the bank rate at 5.0% in August, with one
member voting for a rise and one for a cut. The minutes showed the MPC
as a whole agreed that a case could be made for a rate cut, even if
most were worried that such a move would send a signal that they cared
more about growth than inflation. The main issue for the committee was
how persistent inflation was likely to be and how large a margin of
spare capacity would be necessary to offset it.
Looking ahead
the day left with leading economic indicators for Canada, which will be
followed by retail sales for the same. In the evening we have EIA crude
oil stock change for US for the week ended on 16 August 2008. In the
late evening we have merchandise trade balance for the Japan.
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Asian Markets Rebound As Shanghai Surged By 7.6%
The
stock markets across the Asian region closed on a mix note after Wall
Street fell for a second day on inflation worries, continued weakness
in the financial sector and a rebound in crude oil prices. On Wall
Street, the Dow Industrials lost 1.14%, the broader S&P 500 dropped
0.93% and the tech-heavy Nasdaq fell 1.35%. The Labor Department
released its report on wholesale price inflation in the month of July,
showing that prices increased by much more than expected due in part to
a continued increase in energy prices.
Asian financial stocks
were weak, but resources were higher on stronger commodity prices. Oil
prices rebounded, jumping back above $114 barrel after the dollar
weakened against the euro and heating oil prices rose sharply. Light,
sweet crude for September delivery rose by $1.66 to settle at $114.53
on the New York Mercantile Exchange ahead of the expiry of the
September contract on Wednesday. In late Asian session Wednesday, oil
was up 66 cents at $115.19 a barrel by 4:08 a.m. ET.
On the
currency front, the U.S. dollar declined on profit taking following
recent rally and weakness in the U.S. stock market. The dollar traded
in the upper 109-yen levels in early Tokyo deals, down from lower
110-yen levels late Tuesday. The dollar was quoted at 110.00-110.02 yen
compared to yesterday's close of 110.00-110.03 yen in Tokyo.
However,
the Australian dollar closed firmer amid a rebound in commodity prices
and a weaker U.S. dollar. The Aussie finished the session at
US$0.8716-0.8720, up from Tuesday's close of US$0.8642-0.8645.
The
New Zealand dollar edged closer to two-week highs supported by a weaker
U.S. dollar and stronger commodity prices. The kiwi, which has lost 6%
over the past month, finished the local session at US$0.7150-0.7160,
slightly below the peak of US$0.7162 hit on Monday, compared to
US$0.7080-0.7086 late Tuesday. In the early Asian trade the kiwi was
quoted higher at US$0.7138 in early local trade.
The South
Korean won edged up against the U.S. dollar. The local unit closed at
1,049.30 a dollar; up from 1,051.80 a dollar at open as foreign
exchange authorities unloaded some of their dollar holdings to prop up
the local currency.
Coming back in equities the Japanese market
closed lower for the second consecutive trading session. After a weak
opening, tracking Wall Street's plunge overnight, the market briefly
traded in positive territory in the afternoon session as sentiment
improved following a rally in the Chinese market. The benchmark Nikkei
225 index fell 0.1% to finish at 12,851.69 and the broader Topix index
closed down 0.2% at 1,233.37.
On the economic front, Japan's
all-industry activity index dropped 0.9% on month in June, the Ministry
of Economy, Trade and Industry reported Wednesday. The decline matched
the estimates of most analysts. The index for the three months to June
rose 0.5% from the previous quarter. The ministry also said that the
index in June was 1.2% below its level a year earlier.
Meanwhile,
the Bank of Japan said in its monthly report of Recent Economic and
Financial Developments for August that the Japanese economic growth has
been sluggish. According to the central bank, high energy and material
prices and weak exports growth contributed to the sluggishness.
The
Chinese market closed sharply higher on speculation that the government
will soon undertake measures to boost the economy and the stock market.
The gains came after Chinese Vice-Premier Li Keqiang said that there
was a need to increase household incomes and rural consumption to cope
with a weakening global economy. Brokerages, property developers and
banks surged.
The benchmark Shanghai Composite Index jumped
7.6% - its largest percentage gains since late April to finish at
2,523.28. In Shenzhen, the All Share index soared 7.2% to 712.82.
On
the economic front, there was some relief for the policymakers as the
enterprise commodity price index, a measure of wholesale prices, rose
9.4 pct year-on-year in July, compared with a 9.5 pct year-on-year rise
in June. Compared with the preceding month, the index was up 0.7 pct.
The
People's Bank of China said in a statement that prices of coal,
electricity and oil products rose 26.7 pct year-on-year in July and
were 4.7 pct higher than the preceding month. Coal prices in July
surged 53.5 pct from a year earlier and were up 6.1 pct from the
previous month. Crude oil prices rose 46.8 pct year-on-year and 4.1 pct
month-on-month. Prices of electricity rose 2.9 pct year-on-year and
were up 2.7 pct compared with June.
Non-ferrous metal prices
fell 3.2 pct year-on-year and were up 0.6 pct month-on-month, while
iron ore prices rose 45 pct from a year earlier and 3.3 pct from the
previous month. Prices of steel products were up 44.1 pct year-on-year
and 0.9 pct month-on-month.
Copper prices fell 1.4 pct
year-on-year and were up 0.5 pct from June, while prices of gold rose
26.1 pct year-on-year and were up 5.4 pct month-on-month. Agricultural
product prices in July were up 6.8 pct year-on-year and were up 0.3 pct
month-on-month.
In Hong Kong, the Hang Seng China Enterprises
tracked Shanghai stocks higher to end 4.3% up at 11,179.16. The
benchmark Hang Seng Index rose 2.2% to 20,931.26.
The Australian
stock market closed higher, recouping some of yesterday's losses. The
market started off higher, and extended its gains as resources stocks
rose on stronger commodity prices. The benchmark S&P/ASX 200 index
closed up 1.3% at 4,929.5 after plunging 2.4% on yesterday. The broader
All Ordinaries index advanced 1.4% to finish at 4,997.5.
On the
economic front, a forward-looking index of Australian economic growth
declined in June to an annualized rate of 2.0%. The index, published by
Westpac Bank and Melbourne University, shrank from a reading of 2.4% in
May. The coincident index, measuring current economic activity, showed
an annualized growth rate of 2.4% in June, down from May's reading of
2.7%.
Australia's Department of Employment and Workplace
Relations said that the skilled job vacancies fell 1.7% on month in
August. The index for the month stood at 88.4.
The New Zealand
stock market closed higher, ending a two-day losing streak. The market
started off weak, but staged a strong recovery and moved into positive
terrain in late trade. The benchmark NZX 50 Index closed up 0.39% at
3,332.03 and the broader NZX All Capital Index advanced 0.47% to finish
at 3,356.37.
The South Korean market closed lower for the third
consecutive trading session on Wednesday. The market started off weak
on Wall Street's fall overnight, but recovered ground and moved into
positive territory by afternoon and finished the session slightly below
the flat line. Investors sold tech and shipyard shares, but bought
steel and chemical stocks. The benchmark Korea Composite Stock Price
Index or KOSPI declined 0.05% to finish at 1,540.71.
The Indian
market surged in mid-afternoon trade to hit new intra-day high. The BSE
30-share Sensex closed up by 0.92% to 14,678.23. Key benchmark indices
had surged in opening trade today on bargain hunting after sustained
fall in the last five successive trading sessions. Strong Asian cues
aided the recovery. The S&P CNX Nifty gained by 1.09% to 4,415.75.
Elsewhere,
Taiwan's weighted index gained 0.89% to 7,040.90 while Singapore's
Straits Times index increased by 0.86% to 2,751.75. In Malaysia the
KLSE Composite Index was up by 0.35% to 1,073.21. In Indonesia, the
Jakarta Composite increased 1.33% to 2,069.70.
In the other
part of the world, European shares edged higher from two-week lows, as
miners and oil producers advanced on the back of an up tick in
crude-oil futures and investors also dipped a toe back into the
battered financial sector.
Tracking the globe it was a similar
story around the regions in Europe following the Asian market rebound.
Of national indexes, U.K. FTSE 100 index rose 0.8% to 5,362.30, while
the French CAC-40 index climbed 0.7% to 4,362.16 and the German DAX 30
index advanced 0.4% to 6,307.02.
On the economic front, the Bank
of England released the minutes of monetary Policy meeting in which the
committee voted 7-2 to keep the bank rate at 5.0% in August, with one
member voting for a rise and one for a cut. The minutes showed the MPC
as a whole agreed that a case could be made for a rate cut, even if
most were worried that such a move would send a signal that they cared
more about growth than inflation. The main issue for the committee was
how persistent inflation was likely to be and how large a margin of
spare capacity would be necessary to offset it.
Looking ahead
the day left with leading economic indicators for Canada, which will be
followed by retail sales for the same. In the evening we have EIA crude
oil stock change for US for the week ended on 16 August 2008. In the
late evening we have merchandise trade balance for the Japan.
Visit our site at – http://investorline.co.in/
Newsromm - 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/
Latest News - http://investorline.co.in/blogger/?q=aggregator/categories/1
News Resources - http://investorline.co.in/blogger/?q=aggregator/sources
Newscatcher- http://catcher.investorline.co.in/
Newsgroups- http://groups.google.com/group/india-investor
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