RTTNews - The markets across the Asia-pacific region ended in the positive territory Wednesday, ahead of the key Fed statement on interest rates from the U.S later in the day. Minor recovery in commodity and oil prices and underlying confidence about the global economic recovery helped markets recoup some of the losses in previous sessions. However, the volume is relatively lower as most investors preferred to adopt a wait-and-watch attitude looking for direction.
In the U.S., the major averages ended mixed on either side of unchanged line as traders preferred to stay in the sidelines ahead of the Fed meeting announcement regarding interest rates. While the Fed is expected to leave rates unchanged, traders will keep a close eye on the accompanying statement. On the economic front, traders digested a report from the National Association of Realtors, which showed that existing homes sales rose for the second consecutive month in May but still came in below economist estimates. The report showed that existing home sales rose 2.4% to an annual rate of 4.77 million units in May from a revised 4.66 million units in April. Economists had expected sales to rise 3% to 4.82 million units from the 4.68 million units originally reported for the previous month. Despite the downward revision to April sales, the annual rate of existing home sales for the month was still up 2.4% compared to March.
While the S&P 500 finished up by 2.06 points or 0.2% at 895, the Dow slipped by 16.10 points or 0.2% to 8,323, and the Nasdaq dropped by 1.27 points or 0.1% to 1,765.
The Nikkei 225 Average opened sharply higher at 9,597 compared to its previous close of 9,550, led by electronics makers on weaker yen. However, weakness in retail stocks and concerns about global recovery prospects limited the upside as investors preferred to stay on the side lines ahead of the FOMC announcement later in the day in the U.S. The index finally closed at 9,590, representing a gain of 40.71 points or 0.43%. The broader Topix Index of all first section issues ended at 902, up 0.77 points or 0.09%.
Light sweet crude oil futures for August delivery ended the Asian session at $68.55 a barrel, down $0.69 from previous close. Light sweet crude August delivery rose to $69.24 per barrel, up $1.74 on the session in New York ahead to the Energy Information Administration's weekly inventory report.
On the economic front, a report released by the Ministry of Finance revealed that Japan's trade surplus plunged to JPY 299.83 billion in May from JPY 341.1 billion recorded during the same period of the previous year. The report noted that Exports tumbled 40.9% on a yearly basis to JPY 4.02 trillion in May, while imports declined 42.4% to JPY 3.72 trillion.
Makers of electronics products gained as yen weakened and stayed about the 95 yen per US dollar level. Canon Inc., advanced 2.6%, Fanuc gained 4.75%, and Konica Minolta rose 3.29%.
Mobile phone carrier Softbank Corp. gained more than 6% following news that the company is planning to raise the dividend payment from the year beginning 2011.
Oil refiner Showa Shell Sekiyu KK gained more than 6% following news that the company will build solar power plants in Saudi Arabia. Among other oil stocks, Impex gained 0.98% and Nippon Oil Corp. advanced 2.61%
Among retailers, Seven & I Holdings Co., lost 2.2% after the company stated that it will bear part of the cost to throw away expired foods.
Financials ended in the negative territory on concerns about recovery. Mitsubishi UfJ declined 1.33%, Mizuho Financial edged down 0.42%, Resona Holdings fell 2.23% and Sumitomo Mitsui
Financial lost 1.47%.
In Australia, the All Ordinaries Index opened unchanged from its previous close at 3,793 and slipped below the unchanged line in early trading on concerns about recovery led by banks. Firming up of commodity prices and rally in resource stocks helped recover the losses and move above the unchanged line amid low volume as investors preferred to stay away from the markets. The index finally ended with a gain of 9.20 points, or 0.20%, at 3,802. The benchmark S&P/ASX 200 Index followed a similar trend and ended lower at 3,807, representing a gain of 10.2 points, or 0.27%.
On the economic front, the latest Hudson Report Employment Expectations Survey revealed that Confidence among Australian employers increased for the first time since March last year, after successively declining for five quarters. The survey showed that there was a clear shift away from reducing headcount towards holding the current levels steady. Many employers were now using indirect strategies such as natural attrition and hiring freezes to contain costs, rather than direct actions such as redundancies.
Mixed trend was witnessed among the resource stocks following modest rise in commodity prices in the international market. Rio Tinto gained 2.04%, Minara Resources advanced 3.23%, and Mincor Resources rose 4.17%. However, BHP Billiton shed 0.21%, and Felix Resources lost 4.16%.
Gold stocks also ended mixed, despite marginal rise in bullion prices. While Lihir Gold managed to end in the green with a gain of 0.35%, Newcrest Mining lost 1.73% and Sino Gold slipped 0.75%.
Financials ended weak on growth concerns. ANZ Bank slipped 0.19%, Commonwealth Bank Australia lost 0.51%, National Australia Bank fell 1.11% and Westpac Banking edged down 0.05%.
In Hong Kong, the Hang Seng Index opened higher at 17,583 compared to its previous close at 17,538 and continued to trade in positive territory on optimism about global recovery. However, the trading volume was relatively less as traders preferred to stay away ahead of Fed announcement. The market ended with a gain of 353.78 points, or 2.02%, to close at 17,892.
Resource, property and financial stocks advanced following sharp losses in recent sessions. Among resources, Aluminum Corp. of China, or CHALCO, gained 2.67%. PetroChina advanced 2.72% on higher oil prices, while CNOOC, the largest offshore oil company in China, gained 2.60%. Oil refiner Sinopec Corp added 1.06%.
Property stocks advanced on bargain hunting at lower prices. New World Development soared 5.86%, Sino Land gained 3.65%, SHK Property advanced 3.25% and Henderson Land Development added 1.21%,
Among the financials, Bank of Communications gained 3.69%, ICBC added 0.77%, BOC Hong Kong advanced 3.41%, China Commercial Bank rose 2.99% and HSBC Holdings increased 1.16%.
In South Korea, the benchmark KOSPI Index ended in positive territory led by technology stocks and bargain hunting amid recovery hopes. The market opened sharply higher at 1,366 compared to previous close at 1,361 on higher commodity prices. Volatile trading was witnessed during the session with alternate bouts of gains and losses. The index ended at 1,364, representing a gain of 3.25 points, or 0.25%.
Market-leader Samsung Electronics advanced 0.87% after reporting an alliance with U.S. chip-maker Numonyx B.V. to develop a shared standard for a next-generation memory chip. LG Display gained 2.72% following favorable comments from local brokerage house.
Bargain hunting at lower levels led shipbuilders to end in positive territory. Hyundai Heavy Industries climbed 1.08% and Samsung Heavy Industries gained 2.14%
In India, the stock market ended in the positive territory amid short covering ahead of the expiry of derivative contracts for June period on Thursday.
The BSE Sensex gained 98.72 points or 0.69% to close at 14,324, and the broader Nifty index ended higher with a gain of 45.95 points, or 1.08% at 4,293.
Among the other major markets in the region, China's Shanghai Composite Index advanced 29.60 points, or 1.02% to close at 2,922, Taiwan's Weighted Index gained 182.61 points, or 2.95% to close at 6,380, the Strait Times Index in Singapore added 52.86 points or 2.37% to close at 2,279 and Indonesia's Jakarta Composite Index rose 81.29 points, or 4.25% to close at 1,996.
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