RTTNews - The Asian markets rallied Wednesday and ended in positive territory buoyed by positive earnings results from Intel Corp raising optimism about recovery prospects.
In the U.S., stocks ended in positive territory, led by some late buying activity, meandering back and forth across the unchanged line for most of the session. While the economic numbers were better than expected, the quality of growth raised apprehensions, more than offsetting the positive sentiment generated by better-than-expected results from Goldman Sachs (GS) and Johnson & Johnson (JNJ).
A report released by the Commerce Department revealed that retail sales increased by a little more than expected in June, although the sales growth was due in large part to higher gasoline prices. The report showed that retail sales rose 0.6% in June following an unrevised 0.5% increase in May. Economists had been expecting retail sales to increase by a modest 0.4%. Excluding increases in gas station and motor vehicle and parts sales, retail sales actually fell 0.2 percent for the month.
The U.S. Labor Department revealed that producer prices, a key measure of wholesale inflation, rose 1.8% in June, following a 0.2% increase in the previous month. Core producer prices, which exclude food and energy prices, climbed 0.5%.
Rail-road stocks, gold, oil service, natural gas, semiconductor and airline stocks posted gains, while the healthcare sector continued to be the laggard.
The Dow closed up by 27.81 points or 0.3% at 8,359, the Nasdaq advanced by 6.52 points or 0.4% to 1,800 and the S&P 500 rose by 4.79 points or 0.5% to 906.
The Nikkei 225 Average opened higher at 9,307 compared to its previous close of 9,262 following positive closing on Wall Street and better-than-expected results from Intel Corp. Following a brief upside led up technology stocks, the index drifted lower led by financial and real estate stocks. Traders also turned cautious ahead of earnings from major companies such as IBM later in the week to get cues about recovery prospects. The index managed to end in positive territory with a marginal gain of 7.44 points, or 0.08% at 9,269. The broader Topix Index of all first section issues, on the other hand, ended lower with a loss of 2.20 points, or 0.3%, at 866.
On the economic front, the Bank of Japan retained its key interest rate, and at the same time extended its special funding measures for three months to facilitate corporate financing. The Bank also lowered its growth forecast for the year 2010 to 1% from its earlier expectation of a 1.2% growth.
Light sweet crude oil for August delivery ended the Asian trading session at $60.29, up 77 cents, after ending Tuesday's session in New York at $59.52, down 17 cents amid volatile trading.
Technology related stocks posted gains following Intel's second quarter results. Tokyo Electron gained 0.9%, Nikon Corp. advanced 1.73%, and Advantest rose 1.52%.
Shipping stocks advanced following rise in Baltic Dry Index. Kawasaki Kisen gained 1.75%, Mitsui OSK Lines advanced 2.14% and Nippon Yusen rose 3.38%
Metal stocks ended mixed. Mitsui Mining rose 3.62%, and Sumitomo Metal Mining advanced 1.88%. However, Nippon Light Metal Co slipped 1.08% on profit taking.
Financial stocks ended weaker following downward revision in growth forecast for 2010 from BOJ, which also retained the overnight interest rates unchanged at 0.1%. Mitsubishi UFJ Financial lost 2.36%, Mizuho Financial shed 4.55%, and Resona Holdings declined 2.76%. However, Sumitomo Mitsui managed to end unchanged from previous close.
Real-estate stocks declined after a research report revealed that the number of new condomiums put up in Tokyo market declined 26% in the first half of 2009. Mitsui Fudosan declined 2.27% and Mitsubishi Estate declined 2.16%.
In Australia, the All Ordinaries Index opened slightly higher at 3,863 compared to its previous close at 3,859 on positive cues from Wall Street and moved northward, led by mining and infrastructure stocks. The index stayed in positive territory throughout the session and ended with a gain of 1.52% or 58.70 points at 3,918. The benchmark S&P/ASX 200 Index followed a similar trend and ended at 3,925, representing a gain of 1.5% or 57.40 points.
On the economic front, survey results released by the Westpac Bank and the Melbourne Institute revealed that the rate of contraction in the economy slowed down during May. According to the survey, Australia's leading economic index for May showed a 3.9% decline, compared to a revised year-on-year contraction of 4.1% in April.
Light sweet crude oil for August delivery ended the Asian trading session at $60.29, up 77 cents, after ending Tuesday's session in New York at $59.52, down 17 cents.
Metal stocks led the gains after commodity prices in the international market advanced for the second day. Also the third largest mining company in the world, Rio Tinto revealed an 8% rise in iron-ore output during the second quarter. The shares gained 2.00%. Among other mining stocks, BHP Billiton gained 1.51%, Fortescue Metals soared 6.39%, Gindalbe Metals rose 4.83% and Iluka Resources increased 4.24%.
Gold stocks ended in positive territory. Lihir Gold added 0.70%, Newcrest Mining advanced 0.73% and Sino Gold Mining rose 3.09%.
In the retail space, Wesfarmers, which owns Coles, added 0.61%, Woolworths gained 0.49%, David Jones gained 3.09% and Harvey Norman soared 5.19%
Banking stocks ended higher on optimism about a recovery. ANZ Bank gained 0.73%, Commonwealth Bank Australia advanced 1.36%, National Australia Bank rose 1.52%, and Westpac Bank increased 1.58%.
In Hong Kong, the Hang Seng Index opened sharply higher at 18,043 compared to its previous close at 17,886 following positive closing on Wall Street and positive results from Intel Corp. Positive trading across the region also lift market sentiment and the index finally ended the session in positive territory with a gain of 2.09% or 372.93 points, at 18,259.
All the 42 components of the index ended in the positive territory for the second consecutive day with notable gains as traders picked up stocks at lower levels on expectation of better earnings results from the major U.S corporates amid increasing hopes of recovery prospects.
Financial stocks led the gains after Goldman Sachs reported better-than-expected results for the second quarter. HSBC Holdings gained 2.42%, Hang Seng Bank added 0.75%, Bank of East Asia gained 1.59%, Bank of Communications rose 2.30% and BOC Hong Kong increased 0.85%.
Property stocks continued to move northward and ended in the green. Among the property stocks, Sino Land gained 2.20%, New World Development advanced 2.70% Henderson Land advanced 3.61% and SHK Property rose 3.97%.
Resource stocks also advanced on modest rise in commodity prices in the international market. Coal-miner China Shenhua gained 1.70%. Aluminum Corp of China, or CHALCO, rose 4.77%, PetroChina advanced 1.88%, and CNOOC added 2.67%.
In South Korea, the benchmark KOSPI Index ended in positive territory taking cues from Wall Street which ended in the positive territory. The market opened higher at 1,403 compared to previous close at 1,386, on positive cues from Wall Street and better than expected results from Intel Corp. after the markets closed in the U.S. Optimism about recovery and Intel results helped markets continue its northward march and the index ended in positive territory with a smart gain of 35.30 points, or 2.55% at 1,421.
Technology stocks led the gains. Samsung Electronics surged 5.05% following Intel results on expectations that demand for its products from the U.S. company could increase down the road. Hynix Semiconductor gained 5.08%
Financial stocks advanced following better-than-expected results from Goldman Sachs on expectation of turnaround in the financial sector. KB Financial Group, the parent for top lender Kookmin Bank, gained 6.99% Hana Financial Group, rose 4.29%, Woori Finance advanced 4.22% and Shinhan Financial Group surged 5.00%.
In India, the stock market ended in the positive territory for the third successive day, lifted by encouraging news flow on the earnings front, positive sentiment in Europe and finance minister Pranab Mukherjee's talk about disinvestment in public sector units.
The BSE Sensex finished at 14,253, up 399.54 points or 2.88% from its previous close, while the S&P CNX Nifty rose 122 points or 2.97% to 4,233.
All the other major markets open for trading across the region ended in the positive territory . China's Shanghai Composite Index gained 43.39 points or 1.38% at 3,189, Indonesia's Jakarta Composite Index rose 66.70 points, or 3.24% to close at 2,123, Singapore's Strait Times Index advanced 78.87 points or 3.41% to close at 2,389 and Taiwan's Weighted Index increased 99.19 points or 1.49% to close at 6,739.
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