RTTNews - Major markets across the Asia-Pacific region ended in positive territory on Monday morning, led by resource stocks after the price of commodities in London Metals Exchange ended higher on Friday. Weak closing on Wall Street on Friday and successful nuclear test by North Korea had limited impact on the markets. The market in South Korea ended weaker and Australian market slipped led by financial after the market regulator unexpectedly lifted the ban on short sale of financial securities a week ahead of expectations. However, the volume was relatively thin with the markets in US and the UK closed for holiday.
There were no major economic data on Friday in the U.S. Traders hesitated to take positions ahead of the long Memorial Day weekend. Bargain hunting drove gains into the late afternoon, but the major averages fell uniformly heading down the home stretch. The dollar continued to take a brutal beating, as traders continued their exodus from the world's reserve currency amid speculation that the global economy is on the mend. While the broad outlook is one of optimism, lack of supporting data and mixed signals from the economy are weighing on the near-term outlook, forcing the major indices to end in negative territory.
The Dow closed lower by 14.81 points or 0.14% at 8277, the Nasdaq finished down by 3.24 points or 0.19% at 1692, and the S&P 500 slipped by 1.33 points, or 0.15%, to 887.
Commodity prices rose on Friday in the International market. A measure of six metals in London Metals Exchange gained 2.7% on Friday. Copper futures price gained 2.3% in New York trading while gold futures advanced 0.8%. Resource stocks across the markets ended higher lifting the overall indices and/or limiting the losses on higher commodity prices.
In Tokyo, the Nikkei Index opened higher at 9,246 compared to its previous close at 9,226, despite weaker cues from Wall Street, led by commodity related stocks, and advanced on early trading. News that North Korea did successfully conduct a nuclear test created jitters in the market sending the markets down momentarily but could not dent further and the markets recovered in afternoon session led by exporters after the dollar climbed about the key 95 yen level. The Nikkei Index ended higher by 1.3% or 121.19 points at 9,347, while the broader Topix Index of all first section issues rose 7.12 points, or 0.8%, to 883.
On the economic front, the Ministry of Economy, Trade and Industry revealed that an index measuring all industrial activity in Japan was down 2.4% in March compared to the previous month. That follows a revised 2.3% monthly decline in February - which was originally reported lower by 2%.
The Bank of Japan, in its latest Economic and Financial Developments Report, said that economic conditions in Japan have been deteriorating, but exports and productions are beginning to level out. BoJ Governor Masaaki Shirakawa said the sharp deterioration in economic and financial conditions in Japan and abroad is beginning to level out and he sees prospects of a mild recovery ahead.
Steel related stocks led the gains on speculation that alloy prices might stabilize in the near future. The second largest steelmaker in the country, JFE Holdings advanced 3.7% following reports in the press that Toyota Motor Corp, the major buyer, might not ask for more cuts in alloy prices. Among other steel stocks, Kobe Steel advanced 4.4%, and Nippon Steel added 2.7%.
Goldman Sachs revised the rating on Komatsu Engineering and Hitachi Construction Machinery to buy from neutral citing improving demands in emerging markets. The stock of Komatsu Engineering gained 2.6% and Hitachi Construction advanced 2.1%.
Exporters advanced after the US dollar rose past the 95-yen level. Canon advanced 1.58%, Casio Corp. rose 1.81% and Sony Corp gained 1.84%.
Among banking stocks, Mitsubishi UFJ added 0.33%. Mizuho Financial gained 2.22%, Resona Holdings advanced 1.41% and Sumitomo Mitsui rose 1.33%.
Oil stocks ended mixed. Inpex edged down 0.84%, but Showa Shell advanced 1.94%, and Nippon Oil rose 1.59%.
In Sydney, the All Ordinaries Index, after opening unchanged at 3,755, rose in early trading to as high as 3,778 led by mining and oil stocks. However, news about the successful nuclear test in North Korea and lifting of ban in short selling of financial stocks impacted the market, which drifted into negative territory led by financials. Attempts for recovery in late trading helped limit losses with the index finally ending down by 0.54% or 20.10 points, at 3,735. The benchmark S&P/ASX 200 Index followed a similar trend and ended lower by 23.70 points, or 0.60%, at 3,738.
No major economic reports were released during the day. In a surprise development, the Australian Securities and Investments Commission announced that it was lifting the ban on covered short selling of financials, effective at the opening of Monday's trade, citing improving economic conditions as the reason. The watchdog was expected to lift ban a week later.
Financial stocks led the decline following the lifting of ban by the market watchdog. Macquarie Group is the major loser shedding 6.57%. Westpac Banking lost 3.61%, National Australia Bank slipped 2.57%, Commonwealth Bank was down 2.00% and Australia & New Zealand Bank declined 1.4%.
Mining stocks advanced following rise in metal prices. BHP Billiton advanced 1.2% and Orica gained 4.33%. Rio Tinto, however, edged down 0.06% after announcing that it is taking off its borates business from the market stating that the sales process did not achieve values acceptable to the company in the prevailing economic conditions.
Energy stocks also advanced on higher crude oil prices in the international market. Crude oil prices for July delivery ended higher on Friday at $61.67 in New York. In Asian Trading, oil prices, however, slipped and ended at $61.36, down 31 cents. Woodside Petroleum edged up 0.26%, Santos advanced 0.99% and Oil Search gained 1.37%.
Mixed trend was witnessed among the gold stocks. Lihir Gold declined 0.62%, and New crest Mining slipped 1.57%, but Sino Gold advanced 2.16%.
Among the retailers, while David Jones advanced 1.68%, Harvey Norman slipped 1.35%, Woolworths lost 0.50% and Wesfarmers declined 2.50%.
In Hong Kong, the Hang Seng Index opened modestly lower at 16,999 compared to previous close at 17,063, and traded in the negative territory on weak cues from Wall Street and news about successful nuclear test by North Korea. However, higher commodity prices lifted the stocks in after-noon session and the index managed to close in positive territory with a gain of 59.30 points, or 0.35%, at 17,122.
Resource and china related stocks led the gains on higher commodity prices, while insurance stocks ended in negative territory.
PetroChina edged up 1.48% following news that the company agreed to pay about $2.2 billion to acquire Singapore Petroleum Company which would pave way for the oil company to gain a foothold in the Asian market. CNOOC advanced 3.27%.
Among china-related stocks, China Mercantile Holdings advanced 3.70%, China Resources added 2.70% and China Shenhua gained 3.38%.
Financial stocks ended mixed. While Bank of East Asia surged 6.68%. HSBC Holdings gained 1.85% and Hang Seng Bank gained 0.85%, ICBC lost 1.71%, Bank of China slipped 1.67% and BOC Hong Kong declined 0.53%. Insurance stocks ended weaker with Ping An and China Life slipping into negative territory.
In South Korea, the benchmark KOSPI Index ended at 1,401, down 2.85 points, or 0.20%. The market, after opening lower at 1,394 traded near the unchanged line during early trading before news trickled in neighboring North Korea successfully completed a nuclear test. The stock reacted sharply and shed more than 5% before recovering back smartly after assessing the threat from nuclear test to be not harmful.
Technology stocks were the major losers, with heavyweight Samsung Electronics down 0.91% and LG Electronics shedding 1.35%.
Automobile stocks ended in positive territory with Ssangyang Motor gaining more than 8.5% after a court instructed the company to submit a plan for revival. Kia Motors gained 5.4% after forecasting higher sales for the year.
In India, the stock market ended mixed. Lack of direction, lackluster trading across Asian markets and holiday in the US and UK markets weighed on the sentiment as investors preferred to take profits. The Sensex managed to ended in positive territory with a gain of 26.07 points at 13,913, while the broader Nifty index ended at 4237, down 0.95 points,
Among the other major markets in the region, China's Shanghai Composite Index gained 12.41 points, or 0.48% to close at 2,610, Indonesia's Jakarta Composite Index edged up 0.27% or 4.98 points to close at 1,887 and Singapore's Strait Times Index ended higher at 2,267 with a gain of 22.19 points or 0.99%. Taiwan's Weighted Index slipped into red with a loss of 2.83 points or 0.04% at 6,734.
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