RTTNews - The markets across the Asia-Pacific region ended in positive territory on Monday, led by resource stocks on higher commodity prices. A positive closing on Wall Street on Friday and economic data from China that revealed that manufacturing in the world's third largest economy increased for the third successive month, lifted market sentiment on increasing hopes recovery in the global economy.
In the U.S., the major indices continued their northward march for the second day on increasing hopes of recovery in the economy. A revised reading of the consumer sentiment report for May from Reuters and the University of Michigan came in at 68.7, higher than the previously reported reading of 67.9. The result was also higher than April's final level of 65.1. Analysts expected the survey to yield a reading of 68.0.
In a separate report, the Commerce Department said that gross domestic product for the first quarter contracted at a slower rate than previously estimated. As per the report, gross domestic product fell 5.7% in the first quarter compared to the advance estimate of a 6.1% decrease. Economists had been expecting the pace of contraction to be revised to 5.5%.
Optimism about the economy received a minor jolt when manufacturing data from the Chicago area continued to show a notable slowdown in the region. The ISM-Chicago said its index of activity in the manufacturing sector fell to 34.9 in May from 40.1 in April, with a reading below 50 indicating a contraction. Economists expected the index to edge up to a reading of 42.0.
Notwithstanding mixed reports on the economic front, the Dow closed up 96.53 points or 1.2% at 8500, the Nasdaq closed up 22.54 points or 1.3% at 1774, and the S&P 500 finished up 12.31 points or 1.4% at 919.
The Nikkei 225 Average opened slightly weaker at 9,517 compared to its previous close at 9,522 on profit taking following recent gains. Thereafter, the market reversed the trend and moved above the unchanged line. Higher commodity prices, Chinese manufacturing data and positive sentiment across the Asian markets lifted the sentiment and drove the index to the day's high of 9,692. The benchmark index ended a shade lower at 9,678, representing a gain of 155.25 points, or 1.63%. The broader Topix Index of all first section issues gained 14.61 points, or 1.63%, to close at 913.
On the economic front, the Ministry of Health, Labor and Welfare revealed that labor cash earnings for companies with five or more employees eased 2.5% year-on-year in April following a revised 3.9% fall in March. Analysts expected earnings to slip 4.2% year-on-year. Separately, the Japan Automobile Dealers' Association stated that domestic automobile sales dropped 19.4% year-over-year in May to178, 503 units, compared to 28.6% drop in vehicle sales during April.
Crude oil prices ended up $1.26 to $67.53 a barrel in Asian trading. Light crude oil price for July delivery closed at $66.31 in New York Mercantile Exchange on Friday on increasing optimism about a recovery led by consumer spending.
Inpex, the leading oil exporter in the country, added 0.65%, Showa Shell advanced 1.80% and Nippon Oil gained 2.24%.
The shares of Konica Minolta hit the upper limit, ending the day with a gain of 9.79% after Goldman Sachs raised the rating for the company by one notch to buy on expectation of more upside growth for the company in the medium term in the sector.
Shipping stocks continued to advance following Chinese manufacturing data. Kawasaki Kisen surged up 7.42%, Mitsui OSK Lines advanced 6.36% and Nippon Yusen rose 5.04%.
Among financial stocks, Mitsuibishi UFJ gained 2.84%, Mizuho Financial advanced 3.95%, Resona Holdings added 2.31% and Sumitomo Mitsui rose 2.72%. Nomura Holdings gained 3.63% after the brokerage revealed that it is conducting a survey of the market to gauge the demand, terms and pricing for raising funds through the issue of straight bonds under its shelf registration.
Taking cues from Wall Street, the All Ordinaries Index opened slightly higher at 3,820 compared to its previous close at 3,813. In early trading, the index slipped below the unchanged line briefly on short covering, but recovered smartly following the release of Chinese manufacturing report that showed an increase in manufacturing activity for the third straight month. The index ended the session at day's high of 3,888, registering a gain of 1.96% or 74.60 points. The benchmark S&P/ASX 200 Index followed a similar trend and ended up at 3,894, with a gain of 76.3 points, or 2.00%.
On the economic front, the Australian Bureau of Statistics revealed that retail sales were up a seasonally adjusted 0.3% in April compared to the previous month, coming in at A$19.35 billion. The increase was below expectations for a 0.5% monthly gain following the increase of 2.2% in March and the fall of 2.0% in February. In another report, the Statistics Bureau revealed that inventories declined by a seasonally adjusted 1.2% in the first quarter of 2009, following a 1.9% drop in the fourth quarter of 2008. On an annualized basis, inventories were down 1.1% during the first quarter.
Commodity stocks led the gains in the market. A measure of six commodities traded in London Metals Exchange rose 2.5% on Friday. While copper futures gained 2.7%, nickel prices rose 3.3%. BHP Billiton advanced 3.12%, Orica gained 3.57%, Oz Minerals added 2.86% and Rio Tinto rose 2.77%.
Crude oil prices ended $1.26 to $67.53 a barrel in Asian trading. Light crude oil price for July delivery closed at $66.31 in New York Mercantile Exchange on Friday on increasing optimism about a recovery led by consumer spending.
Woodside Petroleum gained 1.55%, Santos advanced 1.71% and Oil Search soared 4.95%. In a statement, Woodside Petroleum revealed that it is planning to utilize the Port of Broom in Western Australia as a service hub for its Browse Basin LNG development.
In banking space, ANZ Bank gained 1.82%, Commonwealth Bank advanced 2.90%, National Australia Bank rose 2.27% and Westpac Banking added 0.37%. Macquarie Group soared 11.82% following the finalization of terms to acquire Canada-based global energy advisory firm Tristone Capital Global Inc.
Among gold stocks, Lihir Gold advanced 1.22%, and New crest Mining added 2.37%. However Sino Gold bucked the trend and shed 1.07%.
Retail stocks advanced on hopes of a revival in consumer spending. David Jones gained 4.99%, Harvey Norman advanced 2.05%, Coles owner Wesfarmers rose 4.50% and Woolworths added 0.20%.
In Hong Kong, the Hang Seng Index ended sharply higher, led by positive manufacturing data in mainland China, higher commodity prices and Wall Street's gains on Friday.
The market opened higher at 18,500 compared to its previous close at 18,177, and continued to move northward to the day's high of 18,896, led by resource stocks, banks and china-related stocks. The index finally ended the session a shade lower at 18,889, up 718 points, or 3.95%.
All the 42 index components, except five stocks, ended in positive territory. PetroChina advanced 5.62% and CNOOC, the largest offshore oil company in China, surged 8.82%, on higher crude oil prices.
China-related stocks advanced after Chinese manufacturing data expanded for the third consecutive month. China Mercantile Holdings soared 12.39%, China Resources added 5.04% and China Shenhua gained 6.02%.
Among the property stocks, New World Development surged up 9.32%, Henderson Land Development gained 3.12% and SHK Properties advanced 3.52%.
Among financial stocks, HSBC Holdings gained 3.36%, Bank of Communications added 5.18%. Bank of East Asia advanced 6.08% and BOC Hong Kong surged 7.29%.
Among china-related stocks,
In South Korea, the benchmark KOSPI Index ended in positive territory led by foreign institutional investors who continued to pick up select stocks. Resource, steel and automotive stocks led the gains.
After opening slightly weaker at 1,395 compared to its previous close at 1,396, the market slipped further to a low of 1,384 on profit taking by investors following recent gains. Positive manufacturing data and higher commodity prices lifted the market sentiment and the index moved above the unchanged line, led by foreign institutional investors. The benchmark KOSPI Index ended the session with a gain of 19.21 points, or 1.38%, at 1,415.
Financial stocks led the gains. KB Financial, which controls Kookmin Bank, gained 6.62%, Shinhan Financial advanced 3.82% and Woori Finance rose 6.33%.
Automotive stocks ended mixed after the market already discounted the prospects of General Motors filing for bankruptcy. Hyundai Motor gained 3.75% and Kia Motor advanced 2.09%. However, Ssangyong Motor shed 2.62% after announcing that it would close down its major factory located in the southern part of Seoul.
In India, the stock market ended in positive territory, continuing its northward march on expectations of further economic reforms by the Congress party under Dr. Manmohan Singh's stewardship which returned to power for the second time. Positive sentiment across the Asian markets and increasing hopes for recovery also propped up the market.
The BSE Sensex ended at 14,841 with a gain of 215.38 points, or 1.47%, and the Nifty gained 1.82% or 80.95 points, to close at 4530.
Among the other major markets in the region, China's Shanghai Composite Index added 88.35 points, or 3.36% to close at 2,721, Indonesia's Jakarta Composite Index gained 81.75 points or 4.26% to close at 1,999, the Strait Times Index in Singapore added 50.99 points, or 2.19% to close at 2,380, and the Taiwan Weighted Index ended at 6,954, up 63.66 points, or 0.92%.
For comments and feedback: contact firstname.lastname@example.org