RTTNews - Asian markets are trading firm on Monday with hopes of a global economic revival rising further following recent reports from across the globe suggesting the worst phase may already have ended. Most of the markets in the Asia-Pacific region are up sharply in positive territory on hectic buying across the board. Technology, financials and energy related stocks are among the prominent gainers across the region. Fairly heavy buying is seen in healthcare, industrials and automobile sectors as well. With more frontline companies slated to come out with results over the next few days and some key economic reports to follow, a little bit of caution is seen at higher levels but the overall mood remains quite bullish in almost all the markets today.
In the Australian market, materials and energy stocks are leading the rally today with heavyweight Rio Tinto gaining as much as 3.6%.
The Australian benchmark index S&P/ASX 200 is up by 53.6 points at 4,4143. The broader All Ordinaries index is trading at 4,151, up 53.6 points over its previous close.
BHP Billiton is up by a modest 0.8%. Incitec Pivot, Bluescope Steel, Fortescue Metals and Orica are up by 2% - 4%.
Woodside Petroleum and Santos are trading with modest gains. However, Origin Energy, Newcrest Mining and Lihir Gold are exhibiting some weakness.
In the banking space, ANZ Bank is up 1.4%, Commonwealth Bank of Australia is trading up by 1%, National Australia Bank is up by a modest 0.8% and Westpac Banking Corporation up nearly a percent. Diversified financial stock Macquarie Group is up by as much as 4.2%.
In company news, Avoca Resources Ltd has extended its unconditional hostile takeover offer for fellow gold miner Dioro Exploration NL for one week. The A$68.5 million all-scrip offer was scheduled to close on July 28 but will now close on August 4, unless further extended. Avoca said today that the bid has been extended to give shareholders time to consider all of the details that Dioro must immediately disclose regarding Northgate Minerals' proposal to buy Dioro's 49 per cent stake in the Frog's Leg mine near Kalgoorlie, Western Australia. The Avoca Resources stock is currently trading up by 0.3%.
Property developer Australand Property Group has posted a first half loss on property writedowns, downgraded its full year guidance and announced plans for a capital raising. The company has revealed a net loss of A$268.8 million for the first half ended June 30, compared to a profit of A$25.55 million in the same period last year. The result included $235.3 million in losses from property revaluations and $93.45 million in impairments of development and joint-venture inventories. Operating profit after tax was down 11 per cent at $59.98 million.
The company is raising A$475 million (US$389 million) in a fully underwritten share issue to strengthen its balance sheet and secure its funding needs for two years, the firm said on Monday. According to the release from the company, the offer comprises an institutional offer of up to about A$380 million and a retail issue of about A$95 million, with the group's majority security holder, Singapore's CapitaLand, committing to take up its full pro-rata entitlement of around A$282 million. The stock is in trading halt today.
Shares of Virgin Blue Holdings Ltd have also gone into a trading halt today. The company is seeking A$231 million of new capital through an equity raising, as it announced the departure of its chief executive and forecast a net loss for 2008/09. Virgin Blue's equity raising will consist of a placement of shares worth A$21 million, and a one-for-one non-renounceable rights offer seeking A$210.4 million.
The airline said its 25.5 per cent shareholder, Virgin Group, would support the capital raising. The company expects a full year group net loss of A$160 million to A$165 million in the year to June 30.
In the currency market, the Australian dollar was trading at US$0.8183/86, up from Friday's close of US$0.8162/65 on strong gains posted by the Australian stocks. The Aussie is currently trading at 0.8200 to the U.S. dollar.
In Tokyo, the Nikkei breached the 10,000 mark at the stroke of the opening bell and gained in strength as stocks across the board surged higher on hopes about the U.S. economic outlook following upbeat quarterly earnings and an impressive Wall Street rally last week. The Nikkei is currently up by 209.5 points or 2.12% at 10,154.
Bank stocks were among the most sought after ones in morning trade today. Sumitomo Mitsui, Resona Holdings, Chiba Bank, Mitsubishi UFJ and Sumitomo Trust and Banking gained 2% - 3% on strong buying support.
In the automobile space, Toyota Motor, Suzuki Motor and Honda Motor are seen trading with notable gains. Foods, chemicals and pharmaceuticals are mostly trading higher. Telecommunications, steel, machinery and electric machinery stocks are also seen trading in positive territory. Non-ferrous metals and insurance stocks are exhibiting a mixed trend.
Shares of Hitachi Ltd. soared on reports the company is planning to turn Hitachi Maxell Ltd. and four other listed group firms into wholly owned units. Investors bought on expectation that Hitachi's earnings for the year through March 2010 will come in better than the projected 270 billion yen net loss, as the move would allow the company to retain profits that are currently distributed to minority shareholders.
The company, however, has said that it has not officially announced it would make Hitachi Maxell Ltd. and four other affiliates its wholly owned units. The Hitachi stock shot up by over 5% this morning.
Softbank Corp. rebounded on reports that firm's group operating profit likely rose 20% year-on-year to more than 100 billion yen for the April-June quarter.
Sompo Japan Insurance Inc. moved up after details of the planned April 2010 merger with Nipponkoa Insurance Co. came to light. According to reports, the insurers are considering allocating 0.85-0.9 Nipponkoa share for each Sompo Japan share. However, the two firms have said they have not yet reached a decision that should be made public. The stock is currently trading up 3% on its previous close.
Shares of leading securities firm Nomura Holdings are up sharply on hopes the company is back in the black after suffering net losses for five consecutive quarters. The stock is gaining over 3% now. Shares of another leading securities firm Daiwa Securities Group are also gaining in strength on hopes of strong quarterly earnings.
In the currency market, the U.S. dollar traded in the upper 94-yen zone early Monday in Tokyo, slightly down from its late Friday quotes in New York. In early trading, the dollar fetched 94.70-75 yen against Friday's close of 94.78-88 yen in New York and 94.82-85 yen in Tokyo. The yen is currently trading at 94.78 to the U.S. dollar.
The Korean market too is up sharply on Monday on rising optimism about a global economic revival. The Korean benchmark index KOSPI, which opened over 8 points up at 1,511 and rose to 1,523, is currently trading at 1,521, up 18.9 points or 1.25% over its previous close. The KOSPI had ended up 6.10 points or 0.4% at 1,503 on Friday.
Technology and bank stocks are the top gainers in the Korean markets today. Frontline technology stocks Hynix Semiconductor, Samsung Electronics and LG Electronics are trading stronger by 2% - 5%.
Among bank stocks, KB Financial is up by about 3.5%, Shinhan Financial is trading 2.7% up, while Korea Exchange Bank and Woori Finance are trading higher by about 1.3%.
Among automobile stocks, Kia Motor and Hyundai Motor are trading sharply higher, while Ssangyong Motor is trading in negative territory with a 0.8% loss.
Oil stocks are trading mixed. Energy stock KEPCO is gaining about 3%. Steel stocks Hyundai Steel and POSCO are trading firm. In the shipbuilding space, Hyundai Heavy Industries is trading in the red with a sharp loss while Samsung Heavy Industries and Daewoo Shipbuilding are trading modestly higher. STX Pan Ocean is up by about 0.5%.
Telecom stocks are trading modestly higher. Among airliners, Korea Airlines is trading flat, while Asiana Airline is trading with a 2.8% gain.
Among other markets in the Asia-Pacific region, Hong Kong, Shanghai, Singapore and New Zealand are trading sharply higher with their benchmark indices rising by 1% - 2%. The Indonesian index Jakarta Composite is up by 0.75% and Taiwan's Taiwan Weighted Average is trading up by over 0.5%. Stock markets across the region had finished on the upside on Friday.
Wall Street rebounded from lower levels and ended around the unchanged the line on Friday, shrugging off some weak quarterly numbers and a mixed report from Reuters and the University of Michigan, which showed that their reading on consumer sentiment for the month of July was upwardly revised from the preliminary reading but still came in well below the previous month.
The Nasdaq ended in the red for the first time in nearly two weeks as it slipped by 7.64 points or 0.4% to 1,966, the Dow climbed 23.95 points or 0.3% to 9,093 and the S&P 500 rose by 2.97 points or 0.3% to 979.
Major European markets closed on a mixed note, with the German DAX index and the French CAC 40 index finishing down by 0.4% and 0.2% respectively. The FTSE 100 index of the U.K. edged up by 0.4%.
Oil finished a choppy session higher on Friday as traders continued to show optimism the global economy is on the mend, which would improve energy demand. Light sweet crude for September delivery moved up to US$68.05 per barrel, up 89 cents for the session. Prices touched as low as US$66.46, but later touched as high as US$68.18.
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