RTTNews - The markets across the Asia-Pacific region ended in positive territory on Friday benefiting from higher commodity prices and a positive close on Wall Street. An announcement concerning Rio Tinto scrapping its deal with Chinalco and entering into an agreement with rival BHP Billiton for the iron-ore project in Western Australia helped metal stocks advance and lift the markets in the region. However, trading was cautious as traders preferred to stay on sidelines ahead of the key jobs report in the U.S.
In the U.S., traders digested the initial jobless claims for the week ended 30th May, which fell to 621,000 from the previous week's revised figure of 625,000. Economists had been expecting jobless claims to edge down to 620,000 from the 623,000 originally reported for the previous week. The report also showed that continuing claims fell to 6.735 million in the week ended May 23rd from the preceding week's revised level of 6.750 million.
In a separate report, the Labor Department revised its labor productivity figures for the first quarter, revealing a mild increase in the pace of growth. The report also showed that unit labor costs increased by less than previously estimated.
The Dow climbed 74.96 points or 0.9% to 8,750, the Nasdaq finished up 24.10 points or 1.3% at 1,850 and the S&P 500 closed up 10.70 points or 1.1% at 942.
Crude oil prices continued its northward march and ended higher with a gain of 54 cents at $69.35 a barrel in Asian trading. Light sweet crude for July delivery closed sharply higher at $68.81 in New York Mercantile Exchange on Thursday on hopes of increasing demand.
Japan's Nikkei 225 Average opened sharply higher at 9,753 compared to its previous close of 9,669, reflecting the gains on Wall Street and higher oil prices. The market held on to the gains and traded in a narrow range ahead of the U.S non-farm payrolls report. The index ended with a gain of 99.05 points, or 1.02% at 9,768. The broader Topix Index of all first section issues also edged higher to 917, a gain of 5.57 points, or 0.6%.
Financial stocks ended in positive territory, taking cues from its peers in the U.S, which advanced following RBC Capital's upgrade of the banking sector to Sector Perform from Overweight. Mitsubishi UFJ edged up 0.32%, Mizuho Financial added 1.26%, Resona Holdings advanced 1.42% and Sumitomo Mitsui surged up 4.81%.
Oil stocks advanced on higher crude oil prices. Inpex Corp surged up 4.80%, Nippon Oil gained 3.46% and Showa Shell added 1.82%.
Exporters advanced on a weaker local currency. Canon Inc. soared 4.17%, Nikon gained 4.31% and Sony Corp. added 2.08%.
In the automotive space, Mazda Motor Co surged more than 10% after Nikko Citigroup raised the automaker's target price by 36 percent to 350 yen, citing better earnings prospects in the second half of the business year. Among others in this space, Honda Motor edged up 0.35% and Toyota Motor gained 1.31%.
On the other hand, shipping stocks ended weaker following a drop in the Baltic Dry Index, which is used as a benchmark measure for shipping costs for commodities. Kawasaki Kisen lost 2.27%, and Mitsui OSK Lines fell 1.18%.
Australia's All Ordinaries Index opened at 3,933, unchanged from its previous close, and advanced higher, led by mining stocks on higher commodity prices and the announcement concerning Rio Tinto-BHP Billiton joint venture project. The market held on to the gains amid strength in the metals space and moved sideways for the rest of the trading session ahead of the release of the key non-farm payrolls report in the U.S. The index ended up at 3,969, representing a gain of 36.50 points or 0.93%. The benchmark S&P/ASX 200 Index followed a similar trend and ended higher at 3,971, a gain of 36.60 points or 0.93%.
On the economic front, survey results released by Australian Industry Group revealed that activity in the construction sector improved in May, although the sector remained in the contraction zone.. The AiG's Performance of Construction Index for May came in at 46.9, an increase of 10.4 points over April's reading.
Rio Tinto surged 8.36% and BHP Billiton advanced 8.74% after Rio Tinto announced that it has scrapped its deal with Aluminum Corp of China, or Chinalco. The company, in turn, entered into a joint venture with rival BHP Billiton to develop the Pilibara iron-ore project in Western Australia. BHP Billiton, in a separate statement, announced that it would invest $5.8 billion in the 50:50 joint venture project, and the two companies are likely to save more than $10 billion by combining their two iron-assets in the region.
Among others in the metal space, Fortesque Metals soared more than 13.5% following its announcement that it has signed a joint venture agreement with BC Iron for the development of a project in the Pilibara region in Western Australia.
Oil stocks were mixed. While Santos gained 3.66% and Oil Search advanced 3.09% on higher crude oil prices, Woodside Petroleum bucked the trend and ended lower by 1.34%.
Banking stocks ended lower. Commonwealth Bank edged down 0.76%, National Australia Bank lost 1.17% and ANZ Bank fell 3.21%. However, Westpac Banking bucked the trend and ended higher with a gain of 0.47%.
In Hong Kong, the Hang Seng Index opened higher at 18,674 compared to its previous close of 18,502. Rio Tinto's decision to scrap its deal with Chinalco drove the market below the unchanged line, but strength in banking and property stocks on renewed buying interest helped the index move above the unchanged line. The index finally ended with a gain of 176.76 points, or 0.96%, at 18,680.
Property stocks resumed their northward march after a brief pause on Thursday. Henderson Land gained 1.90%, Hang Lung Property added 1.17% and Sino Land advanced 1.95%. New World Development surged up 3.45% and Swire Pacific rose 3.29%
Among resource stocks, PetroChina gained 2.96% and CNOOC, the largest offshore oil company in China, soared 4.68%. Aluminum Corp. of China, or CHALCO, lost 2.07%.
China-related stocks ended in positive territory. China Mercantile Holdings added 0.94%, China Resources gained 1.85% and China Shenhua advanced 3.01%.
In South Korea, the benchmark KOSPI Index gained 1.2% following Wall Street's gains as financial institutions returned back to market on optimism about global recovery. After opening higher at 1393 compared to its previous close at 1,378, volatile trading prevailed with alternate bouts of buying and selling. The index ended with a gain of 16.57 points, or 1.27% at 1,395.
Among financials, KB Financial Group, the holding company of Kookmin Bank, gained 2.36%, following the news that it might attempt to buy Korea Exchange Bank after raising about 2 trillion won through issue of new shares. Woori Finance surged up 5.45% and Shinhan Financial edged up 1.17%.
Technology stocks advanced on hopes of global recovery. Hynix Semiconductor gained 4.07% and market heavyweight Samsung Electronics advanced 2.52%.
In India, the stock market ended in positive territory amid volatile trading on increasing optimism about the continuation of economic reforms at a faster pace. Cautious trading ahead of key economic data in the U.S and profit taking at higher levels limited the gains.
The BSE Sensex gained 94.87 points or 0.63% to close at 15,104, and the broader Nifty is up 0.31% or 14.25 points, at 4587.
Among the other major markets in the region, China's Shanghai Composite Index ended lower by 13.35 points or 0.48% at 2,754, and Taiwan's Weighted Index edged down 18.96 points or 0.28% to 6,767. However, Strait Times Index in Singapore gained 33.61 points or 1.42% to close at 2,396 and Indonesia's Jakarta Composite Index gained 46.21 points, or 2.27% to close at 2,079.
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