RTTNews - The markets across the Asia-Pacific region ended in positive territory on Thursday on increasing confidence that the worst for the global economy is over. Positive earnings from companies lifted market sentiment.
In the U.S., stocks traded in negative territory throughout the session but rebounded off the lows and closed with moderate losses amid low volume trading as traders digested weak economic numbers and earnings with increasing hopes of recovery later in the year. A mixed durable goods report and weak demand for Treasury Department's auction for 5-year notes also impacted trader sentiment
On the economic front, the Commerce Department released a report showing a substantial decline in orders for manufactured durable goods for the month of June, primarily due to sharp decline in orders for transportation equipment. The report showed that durable goods orders fell 2.5% in June following a downwardly revised 1.3% increase in May. Economists had expected orders to fall 0.6% compared to the 1.8% increase originally reported for the previous month. Excluding a 12.8% decrease in orders for transportation equipment, orders for durable goods actually rose 1.1% in June compared to a 0.8% increase in May. The increase surprised economists, who had expected ex-transportation orders to come in unchanged.
The Treasury Department said its $39.0 billion sale of five-year notes drew a high yield of 2.625%. Demand was much weaker than expected, with the bid-to-cover ratio coming in at 1.92 compared to the 2.58 posted in the previous auction.
Traders largely shrugged off the Federal Reserve's Beige Book report which indicated that economic activity continued to be weak going into the summer, with most of the twelve Fed districts indicating that the pace of decline has moderated or that activity has begun to stabilize.
Traders also digested quarterly results from Time Warner (TWX), Qwest (Q) and ConocoPhillips (COP) that were largely ahead of expectations.
The Dow fell by 26 points or 0.3% to 9,071, the Nasdaq slipped by 7.75 points or 0.4% to 1,968 and the S&P 500 declined by 4.47 points or 0.5% to 975.
The Nikkei 225 Average opened higher at 10,156 compared to its previous close of 10,113 following satisfactory results from major companies including Honda Motor and Nissan Motor. and expectations of positive results from other major companies. After having drifted below the unchanged line of weak sentiment and lower commodity prices in mid-morning session, the market rallied on expectations of positive earnings from companies. Positive economic data on industrial output also lifted sentiment. The index ended with a gain of 51.97 points, or 0.51% at 10,165. The broader Topix Index of all first section issues ended in positive territory with a gain of 6.58 points, or 0.7%, to 937.
Light sweet crude oil for September delivery ended the Asian trading session at $63.23, down $0.12 from its previous close in New York at $63.35 a barrel on Wednesday.
Honda Motor gained 8.7% after reporting raising its forecast for the year ended March 2010. Brokerage Nomura Holdings lifted the rating of the carmaker to buy from neutral.
Nissan Motor surged up 9.98% after reported a lower-than-expected loss for the first quarter.
Mitsubishi Electric surged up 14.70% after having reported net loss for the first quarter which was less than half of the analysts' expectations.
Sumitomo Metal, the nation's No. 1 nickel producer, slid 3.87% after the company reported a 78% drop in net income for the first quarter, attributing lower prices of copper and nickel.
Nippon Oil Corp. lost 2.9% . The company revised its full year profit target downwards.
In Australia, All Ordinaries Index opened slightly lower at 4,145 compared to its previous close at 4,149 on weak Wall Street cues, but moved above the unchanged line and continued to march ahead on increasing optimism that the worst is over and future will not be as bad as earlier projected. Positive data on housing front and Citi analyst comments lifted market sentiment. The index finally ended the session in positive territory with a gain of 47.00 points, or 1.13% at 4,196. The benchmark S&P/ASX 200 Index also followed a similar trend and ended at 4,190, representing a gain of 47.60 points, or 1.15%.
On the economic front, The Australian Bureau of Statistics reported that the number of residential building approvals increased 9.3% in June compared to May. Residential approvals were down 14.3% compared to one year earlier. The Bureau said private sector building approvals increased 4.9 percent on month. The value of building approvals in June increased 35.9 percent compared to the month before.
Bank stocks advanced after Citi Group's analyst Craig Williams said he was more optimistic about the outlook of the banks because the economic downturn was likely to be less severe than previously thought, and raised his recommendations on all four banks to 'buy' from 'hold'.
ANZ Bank gained 3.62%, Commonwealth Bank of Australia rose 4.31%, National Australia Bank advanced 3.80% and Westpac Banking increased 2.69%.
Telecommunications major Telstra Corp gained 2.55% on increasing optimism about recovery.
Mixed trend was witnessed among metal stocks after commodity prices declined in the international market. BHP Billiton slipped 0.75%, and Iluka Resources shed 0.65%. However, Rio Tinto edged up 0.17%, Fortescue Metals surged up 6.49%, and Oz Minerals gained 1.37%.
Mixed trend was also witnessed among oil stocks. While Woodside Petroleum added 0.59%, Santos lost 0.76%, Oil Search fell 1.95%, and Origin Energy edged down 0.14%.
In Hong Kong, the Hang Seng Index ended in the positive territory on late buying interest on optimism about global recovery. The market opened slightly higher at 20,150 compared to its previous close at 20,135 and moved higher in initial trading. Profit taking and softer commodity prices dragged the index below the unchanged mark but buying interest re-emerged on earnings optimism. The market finally ended with a gain of 98.58 points, or 0.49% at 20,234.
Aluminum Corp. of China or CHALCO gained 1.05% and China Shenhua Energy soared 3.82%. Among other resource stocks, Petro China lost 0.66% and CNOOC fell 1.16%.
In telecom space, Tencent Holdings declined 0.87% and China Mobile fell 0.97% on profit taking. However, China Unicom edged up 0.54%
In South Korea, the benchmark KOSPI Index ended in positive territory on optimism about earnings and recovery. The market opened flat at 1,524 and drifted lower on lower commodity prices and concerns about valuations. However, buying interest in late session on earnings optimism lifted the index above the unchanged line. The KOSPI Index finally with a gain of 10.42 points or 0.68% at 1,535.
The Indian market bounced back sharply to end near the day's high on Thursday, tracking recovery in Asian stocks, the positive opening by the European markets and due to short covering on account of the expiry of monthly derivatives contracts.
The BSE Sensex finished at 15,388, up 215 points or 1.41% from its previous close, and the S&P CNX Nifty rose 58 points or 1.28% to 4,571.
Among the other major markets in the region, China's Shanghai Composite Index gained 55.13 points, or 1.69% to close at 3,322, Singapore's Strait Times Index advanced 32.13 points, or 1.23% to close at 2,636 and Indonesia's Jakarta Composite Index added 72.32 points, or 3.25% to close at 2,298. However, Taiwan's Weighted Index bucked the trend and slipped into red with a loss of 56.52 points, or 0.80% at 7,027.
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