RTTNews - Mixed trading was witnessed among the markets across Asia Pacific region as traders preferred to lock in gains following a recent rally that raised hopes of recovery. While the market in Japan gained on recovery optimism, the markets in Australia, South Korea, Taiwan and Indonesia managed to end in positive territory having trimmed most of the early gains on profit taking. The market in Hong Kong stalled at unchanged level, while the markets in China and India ended in negative territory.
In the U.S., stocks continued their northward march and ended sharply higher after reports suggested that lender CIT Group has succeeded in securing a $3 billion loan from a group of its major shareholders. The company confirmed the reports after the markets closed. Positive earnings results from Halliburton (HAL), M&T Bank Corp. (MTB), Hasbro (HAS), Eaton (ETN) and Johnson Controls (JCI), as well as better-than-expected economic numbers lifted trader sentiment.
A report released from the Conference Board revealed that that its index of leading economic indicators increased increased by 0.7% in June following an upwardly revised 1.3% increase in May. Economists had expected the index to increase by 0.5 percent compared to the 1.2 percent increase originally reported for the previous month.
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, in a speech, predicted modest growth starting in the second half of the year, though he said there is not likely to be a strong recovery in the medium term.
The Dow advanced by 104.21 points or 1.2% to 8,848, the Nasdaq climbed by 22.68 points or 1.2% to 1,909 and the S&P 500 rose by 10.74 points or 1.1% to 951.
The Nikkei 225 Average opened sharply higher at 9,513 compared to its previous close of 9,395 and continued to advance. The market consolidated the gains and moved sidewards before witnessing a spurt in buying activity in late trading. The Nikkei 225 Average ended up 256.70 points, or 2.73%, at 9,652. The broader Topix Index of all first section issues gained 23.26 points, or 2.65% , to close 902.
Light sweet crude oil for August delivery ended the Asian trading session at $63.83, down $0.15 from its previous close in New York at $63.98 on Monday.
Machinery stocks advanced after a brokerage house upgraded the outlook for Hitachi Construction Machinery Co. The stock soared 9.47%. The Japan Steel Works rose 7.19%, Komatsu Corp gained 5.38% and Daikin Industries advanced 2.33%.
Trading houses also advanced on optimism about a recovery in the global economy. Mitsubishi Corp advanced 5.47%, Toyota Tsusho Corp surged up 6.37%, Mitsui & Co. rose 4.94% and Sumitomo Corp. gained 4.67%.
Automotive stocks advanced on weaker yen and hopes of a revival in the U.S, the biggest export destination for its products. Toyota Motor Corp. gained 3.13%, Honda Motor rose 3.03% and Suzuki Motor advanced 2.36%.
Mitsubishi Chemical Holdings Corp., the largest petrochemical producer in the country, surged up 8.1% after Merrill Lynch initiated coverage of the company with a 'Buy' rating.
Banking stocks also ended in positive territory on prospects of a recovery in the global economy. Mitsubishi UFJ Financial gained 3.54%, Mizuho Financial advanced 1.55%, Resona Holdings rose 4.17% and Sumitomo Mitsui Financial Group added 1.60%.
In Australia, the All Ordinaries Index opened unchanged from its previous close at 4,044 and surged higher in early trading to a high of 4079, but drifted lower as traders preferred to take profits after five days of gains in the market. However, the market managed to end in the green with a gain of 4.10 points, or 0.10% at 4,048, with some support emerging from energy and material stocks. The benchmark S&P/ASX 200 Index ended literally flat with a marginal gain of 0.01% or 0.70 points at 4,051.
On the economic front, the minutes of the Reserve Bank of Australia monetary policy meeting on July 7 showed that economic activity was not as weak as expected. At the meeting, the Board decided to leave the cash rate unchanged at 3%, noting that the current stance of monetary policy supported sustainable growth and low inflation, leaving adequate flexibility to respond to developments as and when needed.
Almost all the sectors witnessed profit taking after the recent rally. Among metal and mining stocks, BHP Billiton gained 0.53% and Rio Tinto advanced 2.85%. However, Fortescue Metals slipped 1.64%, Gindalbie Metals lost 0.64%, Minara Resources shed 1.15% and Oz Minerals edged down 0.49%.
Uranium producer Energy Resources of Australia, however, continued its northward march and added another 3.17%. The company reported on Monday that it expects its profit for the first six months might triple from the same period last year.
Energy stocks also showed mixed trend. While Woodside Petroleum added 0.79% and Santos advanced 0.83, Oil Search bucked the trend and slipped 0.36%.
Retail stocks showed a mixed trend. Harvey Norman slumped 6.05% after reporting a sharp drop in quarterly sales. The company also noted that all of its 16 outlets maintained in Ireland are under-performing. David Jones fell 2.51%. However, Wesfarmers added 0.33% and Woolworths edged up 0.40%.
Mixed trend was also witnessed among gold stocks. Lihir Gold added 0.34% and Sino Gold Mining rose 1.35%. However, Newcrest Mining bucked the trend and shed 0.90%.
Banking stocks also ended on a mixed note. ANZ Bank slipped 0.59%, Commonwealth Bank Australia edged down 0.38% and National Australia Bank lost 1.36% . However, Westpac Banking bucked the trend and added 0.35%.
In Hong Kong, the Hang Seng Index ended nearly flat after having risen more than 2,000 points in the past five trading sessions. The market opened higher at 19,602 compared to its previous close at 19,502 following strong gains in Wall Street Monday, but drifted into negative territory amid profit taking. However, optimism about growth prospects witnessed renewed buying interest and the market finally ended with a marginal loss of 0.64 points, at 19,502.
Telecom stocks and china related stocks dragged the indices lower while banks, insurance firms and property stocks posted gains.
In telecom space, Tencent Holdings slumped 5.63%, China Unicom fell 2.94% and China Mobile lost 2.53%.
Among financials, HSBC Holdings gained 1.92%%, Hang Seng Bank added 0.45%, Bank of East Asia edged up 0.21%, and Bank of Communications rose 0.87%. Insurance stocks advanced. FIH soared 8.70%, Ping An added 0.99% and China Life rose 1.83%.
In property space, SHK Property gained 1.21%, New World Development rose 3.52%, Sino Land gained 1.94% and Wharf Holdings increased 2.88%.
In South Korea, the benchmark KOSPI Index ended in positive territory following positive closing on Wall Street on optimism about recovery later in the year. The market opened higher at 1,489 compared to previous close at 1,479 on Wall Street cues. However, profit taking at higher levels dragged the index lower. Foreign buying lifted the index back and the market ended with a gain of 10.48 points or 0.71% at 1,489.
Automotive stocks advanced led by Hyundai Motor, which reported a marginal rise in its market share in the U.S and Western Europe. The stock surged 3.59%. Kia Motors gained 2.26%.
Steel makers gained on prospects of higher prices for steel products. Hyundai Steel climbed 2.37%, and POSCO gained 1.44%,
Lotte Shopping, the operator of the biggest department chain, jumping 5.66% on expectations of rise in consumer demand.
The Indian market ended lower as cautious undertone following sharp gains in recent sessions led to some profit taking.
The BSE Sensex ended trading at 15,062, down 129 points or 0.85% from its previous close, and the S&P CNX Nifty fell 33 points or 0.74% to close at 4,469.
Among the other major markets in the region, China's Shanghai Composite Index declined 53.71 points or 1.64% amid profit taking to close at 3213, and Singapore's Strait Times Index edged down 1.82 points, or 0.07% to close at 2,454. However, Indonesia's Jakarta Composite Index ended in positive territory with a gain of 40.20 points, or 1.91% at 2,147 and Taiwan's Weighted Index ended at 6,953, representing a gai of 14.48 points, or 0.21%.
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