RTTNews - The Asian markets ended in positive territory Thursday following cues from Wall Street where markets ended sharply higher. Profit taking at higher levels dragged the indices from the day's high as traders preferred to exercise caution ahead of earnings in the U.S.
In the U.S., stocks ended sharply higher, led by positive results from chipmaker Intel (INTC) and restaurant operator Yum! Brands (YUM) raising hopes of revival in consumer spending. A smaller-than-expected drop in industrial output and the minutes of the June FOMC meeting helped sustain the tempo of the rally throughout the session. The minutes of the June FOMC meeting showed that the GDP estimates were revised to show a smaller than expected decrease in 2009 and a bigger than expected increase in 2010. At the same time, the Fed said it expects the unemployment rate to come in higher than previously estimated based on the incoming employment data.
Earlier, a Labor Department report revealed that consumer prices saw a 0.7% increase in June compared to the previous month. Economists had projected an advance of about 0.6%. Compared to the same period last year, consumer prices were down 1.4 percent, the largest year-over-year decline since 1950. In a report, the New York Fed said that conditions for New York manufacturers were roughly flat in July, with the index of activity in the sector rising to a level close to zero.
A separate report from the Federal Reserve indicated a continued decrease in industrial production in the month of June, although the rate of decline slowed by more than economists had been anticipating. With the slowdown, industrial production fell at its slowest pace since the 1.3 percent jump that was seen in October of 2008.
The Dow closed up by 256.72 points or 3.1% at 8,616, the Nasdaq climbed 63.17 points or 3.5% to 1,863, and the S&P 500 rose 26.84 points or 3% to 933.
The Nikkei 225 Average opened sharply higher at 9,394 compared to its previous close of 9,269 and further moved higher to as high as 9,490 on positive cues from Wall Street. However, profit taking at higher levels amid stronger local currency and prospects of bankruptcy filing of CIT Group in the U.S, trimmed early gains. Traders also turned cautious ahead of earnings from JP Morgan, IBM and Google later in the day. The index managed to end in positive territory with a gain of 74.91 points, or 0.81% at 9,344. The broader Topix Index of all first section issues gained 5.88 points, or 0.7%, to 872.25.
Light sweet crude oil for August delivery ended the Asian trading session at $60.34, down 20 cents, after ending Wednesday's session in New York at $61.54, up $2.02 a barrel boosted by a larger-than-expected decline in crude oil inventories in the previous week.
Tiremaker Bridgestone Corp. gained 5.75% after Mizuho Securities Co. raised the company's earnings estimate.
Mitsubishi Corp., which gets more than half its sales from commodities, rose 4.63%. Marubeni Corp. gained 2.63%.
Komatsu gained 2.75% after strong GDP numbers for second quarter from China.
Auto-related stocks advanced following news that Toyota Motor and Mazda Motor are in talks over the supply of components of Toyota's hybrid system to Mazda. Honda Motor gained 1.02%, Mazda Motor surged up 6.19% and Toyota Motor added 0.86%.
Shipping stocks advanced following rise in Baltic Dry Index. Kawasaki Kisen gained 3.45%, Mitsui OSK Lines advanced 1.92% and Nippon Yusen edged up 0.25%
Financial stocks ended mixed amid profit taking. While Mitsubishi UFJ Financial slipped 0.93%, Mizuho Financial edged up 0.53%, Resona Holdings added 1.46% and Sumitomo Mitsui Financial advanced 0.81%.
In Australia, the All Ordinaries Index opened unchanged from its previous close at 3,918 and surged higher in early trading on positive cues from Wall Street, where the major indices posted sharp gains on Intel results. Following the initial spurt, the market held on to the gains and moved sideward for the rest of the session. The index ended the day with a gain of 70.3 points, or 1.79% at 3,988. The benchmark S&P/ASX 200 Index followed a similar trend and ended at 3,996, representing a gain of 1.81% or 71.10 points.
Energy stocks led the gains following the sharp rise in crude oil prices in the international market. Woodside Petroleum gained 1.25%, Santos advanced 2.58% and Oil Search rose 2.46%.
Metal stocks ended higher on higher commodity prices and expectations of higher demand. Rio Tinto surged up 4.63%, BHP Billiton advanced 1.78%, Fortescue Metals rose 4.44%, Iluka Resources gained 3.05%, and Mincor Resources increased 4.19%. Macarthur Coal surged 6.10%.
Gold stocks ended in positive territory following A rise in bullion prices. Lihir Gold advanced 1.04%, Newcrest Mining rose 2.45% and Sino Gold Mining surged up 4.60%. Sino Gold revealed that its production increased 51% in the recently concluded June quarter.
Banking stocks advanced on optimism about a recovery. ANZ Bank added 0.91%, Commonwealth Bank Australia advanced 1.52%, National Australia Bank rose 2.57%, and Westpac Bank increased 1.10%.
In Hong Kong, the Hang Seng Index opened sharply higher at 18,689 compared to its previous close at 18,259 following strong gains on Wall Street overnight led by Intel's results. However, profit taking at higher levels and caution ahead of more earning results from the U.S trimmed early gains and the market finally ended in positive territory with a gain of 103.21 points, or 0.57%, at 18,362.
Financial stocks ended mixed as traders locked in gains ahead of results from JP Morgan in the U.S. HSBC Holdings gained 1.91%, Hang Seng Bank edged up 0.56%, Bank of East Asia gained 2.00%, and Bank of Communications rose 2.49%. However, BOC Hong Kong ended in negative territory with a loss of 2.24% and Bank of China shed 1.12%
Property stocks also ended mixed. Among the property stocks, Sino Land gained 2.31%, New World Development advanced 1.90% and Henderson Land advanced 1.28%. However, SHK Property bucked the trend and ended in negative territory with a loss of 1.66%.
In South Korea, the benchmark KOSPI Index ended in positive territory following sharp gain on Wall Street where the major indices ended sharply higher on Intel results. The market opened sharply higher at 1,438 compared to previous close at 1,321, on positive cues from Wall Street . However, profit taking at higher prices trimmed the early gains partially and the index finally ended with a gain of 11.36 points, or 0.80% at 1,432.
Shipbuilders rallied advanced on expectation of revival in demand for new vessels in the thred quarter. Industry leader Hyundai Heavy Industries jumped 4.95% and Samsung Heavy Industries surged up 9.51%
Steel shares also advanced on expectations of higher earnings. Steel major POSCO gained 1.7% and Hyundai Steel rose 0.89%
Automobile shares also gained on expectation of better earnings for the second quarter. Hyundai Motor gained 2.12% and Kia Motors added 2% to their previous close.
In India, the stock market ended in flat paring all of the gains in the morning session on Wall Street cues as traders preferred to take profits amid concerns about monsoon.
The BSE Sensex finally ended the session at 14,250, down 3 points or a mere 0.02% from its previous close. the S&P CNX Nifty also closed mostly flat 4,231 compared to its previous close of 4,233.
Among the other major markets in the region, China's Shanghai Composite Index slipped 4.81 points, or 0.15% and ended lower at 3,184, and Indonesia's Jakarta Composite Index edged down 5.33 points, or 0.25% to close at 2,118.. However, Singapore's Strait Times Index added 11.60 points or 0.49% to close at 2,401 and Taiwan's Weighted Index advanced 41.70 points or 0.62% to close at 6,780.
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