With overnight buoyant close on Wall Street setting up a strong platform for the bulls to launch yet another assault, Asian markets got off to a rousing start on Tuesday and are currently trading firm with stocks from banking, energy and materials sectors recording handsome gains.
Concerns over the outbreak of swine flu and the possible damage it could inflict on global economy have taken the back seat at least for the time being. The mood is extremely bullish across the globe on hopes global economy would bounce back on to the rails courtesy the stimulus plans from various central governments.
Economic data released over the past few days have been fairly encouraging. China revealed its industrial output had expanded for the first time in nine months.
The data from U.S. and Europe show a marked improvement in manufacturing activity in those regions. The Eurozone manufacturing purchasing managers' index came in at 36.8 in April, above 33.9 in March. The widely tracked ISM purchasing managers' index in the U.S. rose to 40.1 in April from 36.3 in March, its highest level since September 2008.
Among the markets in the Asia-Pacific region, New Zealand, Australia, Hong Kong, Shanghai, Taiwan, Indonesia and Singapore are trading firm. The Japanese and Korean markets are closed today on account of Children's Day.
The benchmark Australian index S&P/ASX 200, which drifted down into negative territory after an early surge to 3,940, is currently up 15.7 points at 3,899. The All Ordinaries index is up 20.5 points at 3,867.
The NZX 50 index of New Zealand is up 48.04 points or 1.74% at 2,814. Hong Kong's Hang Seng index is trading nearly 53.29 points or 0.33% up at 16,434. The benchmark indices of Singapore, Shanghai, Indonesia and Taiwan markets are up 0.4% - 2% over their previous closing levels.
Energy, financials, materials and industrials stocks are trading firm in the Australian market. Healthcare stocks, which had a few bright sessions last week, are exhibiting weakness. Telecommunications, information technology and consumer staples are also trading weak.
The stock markets across the Asia-Pacific region had closed considerably higher on Monday, with traders reacting positively to the report showing an expansion in Chinese manufacturing. The Japanese market remained closed for a national holiday.
The major European markets also turned in strong performances, although the market in London was closed due to a holiday. The French CAC 40 Index and the German DAX Index ended the session up 2.5 percent and 2.8, respectively.
On Wall Street, better than expected economic data kept the mood bullish on Monday. With stocks led by those from the banking space surging sharply on strong buying interest, the Dow closed up up 214.33 points or 2.6 percent at 8,426.74. The Nasdaq ended up 44.36 points or 2.6 percent at 1,763.56 and the S&P 500 closed up 29.72 points or 3.4 percent at 907.24.
With the gains, the Nasdaq ended the session at its best closing level in six-months, while the Dow and the S&P 500 set nearly four-month closing highs. The upward move also lifted the S&P 500 above the unchanged line for the year-to-date period.
A report from the National Association of Realtors showed a significant increase in pending home sales, an indicator of future housing market activity. The increase came as many first-time buyers are taking advantage of historically good housing affordability conditions.
The report showed that NAR's pending home sales index rose 3.2 percent in March following a revised 2.0 percent increase in February. Economists had expected the index to come in unchanged following the 2.1 percent increase originally reported for the previous month.
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