RTTNews - Asian markets are exhibiting a mixed trend on Tuesday with participants looking to cash in on recent rallies and taking some profits. The lead from Wall Street was somewhat positive due largely to a better-than-expected surge in new home sales. Earnings announced were either in line with expectations or slightly above forecasts. It appears that a section of investors are indulging in some profit taking perhaps believing global markets have run up a bit too fast on hopes of an economic revival.
Most of the markets in the region are moving in a choppy fashion today with investors looking to exit counters at every noticeable rise in stock prices. Technology, industrials and energy stocks are seeing some sell-off. Automobile stocks are having a slippery ride in some markets. Energy related stocks are exhibiting a mixed trend while bank stocks are mostly trading higher.
In the Australian market, bank stocks are faring well. ANZ Bank is up with a modest gain, while Westpac Banking Corporation and National Australia Bank are up sharply in positive territory. Commonwealth Bank of Australia, however, is down in the red with a modest loss.
The Australian benchmark index S&P/ASX 200 is currently up by 13.9 points or 0.3% at 4,154. The broader All Ordinaries index is trading up 14.8 points or 0.4% at 4,163.
Among materials stocks, Rio Tinto, BHP Billiton, Fortescue Metals and Newcrest Mining are trading weak while Bluescope Steel and Orica are trading higher with notable gains.
Energy stocks Woodside Petroleum, Santos and Origin Energy are exhibiting weakness. On Monday, Newmont Mining Corporation extended its gas supply contract in Western Australia with Santos for four years. The gas will be supplied from the offshore John Brookes gas field. It will be processed at the East Spar gas processing facilities on Varanus Island and transported through the Goldfields pipeline.
Alesco has posted a full year net loss of almost A$13 million. The building materials and home products maker booked a net loss of A$12.8 million for the 12 months ended May 31, compared to a net profit of A$58 million in the previous financial year. The company's net profit before significant items was A$29.1 million, compared to A$65.5 million in the prior year. The stock, which moved up sharply in morning trades, is currently up with a modest gain.
In economic news, Australia's Conference Board's Leading Index fell for the first in four months in May, dropping -0.1%. April's reading was also revised downward to 0.3% from the originally reported 0.7% result. The metric tracks a number of leading indicators including rural goods exports, building approvals and stock prices to gauge the short- to medium-term trajectory of the overall economy. Perhaps the most important takeaway from the report is that the sales-to-inventory ratio, the largest component of the index, fell for the sixth consecutive month to reveal companies continue to suffer from lackluster demand.
In the currency market, the Australian dollar recorded its best open in ten months as rising equity markets boosted investor appetite for risk. In early trading this morning, the Aussie was quoting at US$0.8225/27, up from Monday's close of US$0.8220/24. The Australian dollar is currently trading at 0.8242 to the U.S. dollar.
In Tokyo, investors are taking a breather today after a nine-session rally. With more results and economic reports to hit the market over the next few days, the mood has turned somewhat cautious and profit taking appears to be the order of the day in today's session.
After spending a few minutes in positive territory, the Nikkei fell into the red this morning and despite staging a few rallies from lower levels, is currently down in the red at 10,060.2 with a modest loss of 28.4 points or 0.28%.
Buoyed by encouraging new home sales data from U.S., shares of automobile major Toyota Motor Corp. edged higher this morning. The stock gave up some gains due to profit taking at higher levels, but is still holding on in positive territory with a modest gain. Suzuki Motor, Nissan Motor, Isuzu Motors and Hino Motors also found support this morning.
In the banking space, Sumitomo Mitsui Financial, Chuo Mitsui Trust Holdings, Sumitomo Trust and Banking, Mitsubishi UFJ Financial and Mizuho Trust & Banking edged higher but most of them are trading flat now.
Steel stocks are mostly trading higher with JFE Holdings and Pacific Metals posting impressive gains. Non-ferrous metals Toyo Seikan Kaisha, Sumitomo Electric Industries, Toho Zinc, SUMCO and Fujikura are trading with notable gains. Construction, foods, chemicals and pharmaceuticals stocks exhibit a mixed trend.
Hitachi Construction Machinery Co. has lowered its net profit outlook to 5 billion yen for the year ending March, 73% smaller from a year earlier, down from the previous projection of a 7 billion yen profit. The stock, which plunged into the red after opening sharply higher this morning, was up in positive territory with a modest gain at the break.
The Federal Reserve Bank of New York said Monday it has named Nomura Securities International as a primary dealer, allowing it to trade Treasury securities directly with the U.S. Federal Reserve System. In Autumn 2007, the unit of Nomura Holdings Inc. voluntarily removed itself from the list as losses in its U.S. operations came to light. The Nomura Holdings stock was up by around 1.5% at the end of the morning session.
Shares of Sapporo Holdings Ltd. moved past the 600 yen mark for the first time in nearly nine months and hit year-to-date high at 648 yen after the company said it will likely book a group net loss of 700 million yen for the January-June period, down from 9.5 billion yen profit a year earlier. Despite the sharp decline, earnings were much better than the previous estimate of a 3.7 billion yen loss.
Citizen Holdings rose sharply today after a JP Morgan Securities Inc. report raised the firm's investment rating on the watchmaker one notch to the highest overweight on its three-grade scale.
In the currency market, the U.S. dollar traded in the lower 95-yen range early Tuesday in Tokyo, little changed from its late Monday quotes in New York. In early trading this morning, the dollar fetched 95.17-22 yen against Monday's close of 95.14-24 yen in New York and 95.00-03 yen in Tokyo. The yen is currently trading at 95.10 to the U.S. dollar.
The Korean stock market is exhibiting some weakness on Tuesday with investors indulging in profit taking in a few front line stocks after recent sharp rallies.
The benchmark index KOSPI, which edged up to 1,529 after initial weakness but drifted down to 1,518 around noon, is currently down by around 2 points or 0.13% at 1,522.
Technology stocks, which had a good run in recent sessions, are trading weak today. Hynix Semiconductor, Samsung Electronics and LG Display LCD are trading lower, while LG Electronics is up in positive territory with a modest gain.
Among bank stocks, KB Financial and Shinhan Financial are trading stronger by around 3%. Woori Finance is up by 1.2%, while Korea Exchange Bank is trading lower by nearly a percent.
In the automobile space, Kia Motor is down sharply, while Ssangyong Motors and Hyundai Motor are down with modest losses.
Shipbuilders Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding are trading lower. Bulk carrier STX Pan Ocean is trading with a 4% gain.
Oil stocks SK Holdings and S-Oil are trading weak. Energy major KEPCO is up by 0.7%. Among steel makers and Hyundai Steel is up by 0.5%, while POSCO is trading 1.5% down. Airliner Korea Airlines is trading with a strong 4.7% gain. Asiana Airlines is up nearly a percent. Telecom stocks are trading mixed.
Hong Kong, Indonesia, Singapore and Taiwan are trading higher with notable gains. The New Zealand market is also trading firm. Shanghai is exhibiting weakness. Stock markets across the Asia-Pacific region had finished on the upside on Monday.
On Wall Street, stocks rallied during the final hour on Monday after trading in the red for a considerable length of time.
According to a release from the commerce department, new home sales jumped 11% to an annual rate of 384,000 in June from the revised May rate of 346,000. The rise was much more than economists had been anticipating.
The Dow closed up by 15.27 points or 0.2% at 9,109, the Nasdaq climbed by 1.93 points or 0.1% to 1,968 and the S&P 500 edged up by 2.92 points or 0.3% to 982.
Major European markets ended the day higher after seeing some volatility. The German DAX index gained 0.4% while the U.K.'s FTSE 100 index and the French CAC 40 index both eked out 0.2% percent gains.
Crude oil finished a choppy session mildly higher on Monday after earlier challenging US$69 per barrel. Oil received a spark from encouraging housing data that led to believe better days may be ahead for energy demand. Light sweet crude oil for August delivery rose to US$68.38, up 33 cents on the session. Prices earlier touched as high as US$68.99 before hitting a low of US$67.60.
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