RTTNews - Asian markets are exhibiting a mixed trend on Thursday with investors staying wary of holding positions at higher levels in the midst of the reporting season. The overnight negative close on Wall Street has not hurt sentiment any significantly in the Asia-Pacific region. Still, buying is mostly stock specific in most of the markets. Though earnings reports from most of the top notch companies across the globe have beat market expectations, the better than expected numbers happened on the back of severe cost cutting measures rather than on any significant rise in revenues.
Even as hopes of a global economic revival keep rising on the back of some encouraging economic data, a section of economists and analysts are of the view that a full recovery may take a bit longer and this uncertainty has been pulling the market down from higher levels at times.
In the Australian market today, financials, healthcare and industrials stocks are trading firm. After a weak start, some energy-related stocks are gaining in strength. The benchmark index S&P/ASX 200 is currently up by 25 points or 0.7% at 4,168 while the broader All Ordinaries index is trading 24.6 points or 0.6% up at 4,173.5.
Bank majors Commonwealth Bank of Australia, ANZ Bank, National Australia Bank and Westpac Banking Corporation and diversified financials major Macquarie Group are all trading with notable gains.
Foster's Group Ltd has set up a $US500 million three-year syndicated loan facility involving Asian banks. The facility includes a fully drawn tranche and revolving facilities denominated in Australian and United States dollars. The initial facility was for a total of $US300 million but was increased to $US500 million after it was more than two times oversubscribed by the Asian banks. Shares of the food beverage and tobacco major are currently trading nearly a percent up. The stock is currently trading flat.
Elders Rural Bank Ltd, a joint venture between Elders Limited and Bendigo and Adelaide Bank Limited, has posted a 10% rise in annual profit and says retail deposits remain strong. Net profit for the year ended June 30 was A$45.1 million, up from A$41.1 million in the previous financial year. Loans under management at June 30 totaled A$3.679 billion, up slightly from A$3.650 billion. The bank's total deposits, at A$3.753 billion, were also higher than the prior year. The Elders Limited stock is moving up by over 10%.
Lihir Gold has achieved record production of 612,000 ounces in the first half of 2009, and the company says it remains on track to meet earlier full year production guidance. The company attributed the strong result to a record production at Lihir Island in PNG, increased output at Mt Rawdon in Queensland, and a full six-month contribution from the Bonikro operation in West Africa, to the strong result. The stock is up by over 1% now.
In economic news, Australian building approvals rose a seasonally adjusted 9.3% to 11,086 units in June, from an upwardly revised 10,144 units in May, the Australian Bureau of Statistics said today. The market forecast was for building approvals to have recorded a rise of eight per cent in June. In the year to June, building approvals fell 14.3%.
The latest Chamber of Commerce and Industry Queensland Pulse Survey, shows Queensland businesses are increasingly confident the national economy will recover over the coming year. More significantly, the survey also showed a drop in businesses expecting conditions to deteriorate - from 66 per cent in the March quarter to 27 per cent in June quarter.
The Australian dollar opened lower today with the sharp debacle in the Chinese market on Wednesday influencing investors. The Aussie was quoting at US$0.8176/79, down from Wednesday's close of US$0.8188/91. The Aussie is currently trading at 0.8174 to the U.S. dollar.
After a positive start on the back of a weaker yen and some encouraging results from leading corporate houses including Honda Motor Corp., the Japanese market fell sharply into the red this morning before rebounding on modest buying at lower levels.
The Nikkei, which fell to around 10,070 after a firm start, is currently trading at 10,997, down 16.6 points or 0.16% from its previous close.
According to a release from the Ministry of Economy, Trade and Industry, Japan's industrial output rose 2.4% from May to a seasonally adjusted 81 in June, the fourth straight month of increase. The figure, however, fell short of the average market prediction of a 2.5% rise.
The shipment index climbed 3.5% to 81.7 and the inventory gauge fell 1.0% to 95.4, sending the inventory to shipment index down 9.8% to 129.1. Looking ahead, the government forecast that the headline index would rise 1.6% in July, and 3.3% in August.
Shares of Honda Motor Co. and Nissan Motor Co. are up sharply this morning. While Honda, Japan's second biggest car maker by sales volume, said its net profit for the first quarter ended June 30 tumbled 96% on year to Y7.56 billion from Y173.4 billion, Nissan reported a net loss of Y16.53 billion in the three months ended June, reversing from a net profit of Y52.80 billion a year earlier.
However, drastic cost-cutting measures helped the two automakers to achieve remarkable turnarounds and report operating profits. With the results turning out to be better that what analysts had forecast and amid hopes the worst might be over for the two auto giants, investors are seen rushing to pick up their stocks today. The two stocks are currently trading higher by over 7%.
Nomura Holdings Inc. shares rose after a two-day retreat, inspired by the firm's Wednesday evening announcement that it posted a group net profit of 11.4 billion yen in the April-June period, the first positive figure in six quarters. However, after gaining over 3% in early trading, the stock has drifted lower and is currently up by just a modest margin.
Toshiba Corp. edged up for the twelfth straight day after the firm said Wednesday evening it booked a group operating loss of 37.5 billion yen in the April-June quarter, an improvement from the January-March red ink. In April-June 2008, the electrical appliance maker logged a 22.8 billion yen loss. The stock is up by about 3% now.
Chemicals and pharmaceuticals stocks are trading mixed. Construction and realty stocks are trading weak.
Among bank stocks, Sumitomo Mitsui, Chiba Bank, Mitsubishi UFJ, Mizuho Financial and Mizuho Trust & Banking are trading in positive territory.
In the currency market, the dollar traded in the lower 95-yen zone early Thursday in Tokyo, up slightly from its levels overnight in New York.
In early trading, the dollar fetched 95.08-13 yen versus Wednesday's closing quotes of 94.96-95.06 yen in New York and 94.41-43 yen in Tokyo. The yen is currently trading at 94.91 to the U.S. dollar.
After an initial fall, the Korean market regained some lost ground on fairly strong buying in some shipbuilding, steel and telecom stocks but faltered again due to weak support at higher levels. Technology and automobile stocks are exhibiting a mixed trend.
The KOSPI, which dropped down to 1,511 after opening near the unchanged line this morning, is currently down with a loss of 7.6 points or 0.5% at 1,517.
Technology stocks are seeing some profit taking today. Hynix Semiconductor, LG Display LCD and LG Electronics are trading lower by 1.5% - 2%, while market heavyweight Samsung Electronics is trading modestly higher.
In the automobile space, Ssangyong Motor is up by as much as 15%. Kia Motor and Hyundai Motor have drifted lower and are currently trading with notable losses.
Among steel stocks, POSCO is up by about 2% and Hyundai Steel is trading with a modest gain. Oil and energy stocks are trading flat.
In the banking space, Shinhan Financial and KB Financial are up with modest gains, while Korea Exchange Bank and Woori Finance are trading in the red with modest losses.
Shares of shipbuilders Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding are up by 1.7% - 3%. Bulk carrier STX Pan Ocean is down with a sharp 2.8% loss. Airlines are trading weak. Telecom stocks SK Telecom and KT Corp. are gaining 2% and 1.5% respectively.
Among other markets in the Asia-Pacific region, Shanghai, Hong Kong, Singapore and Taiwan are trading weak while New Zealand and Indonesia are trading modestly higher. Stock markets across the region had finished largely on the downside on Wednesday.
On Wall Street, stocks bounced around in negative territory throughout Wednesday's session in reaction to the day's slew of earnings and economic reports. On the economic front, the Commerce Department released a report showing that orders for transportation equipment declined sharply in June, contributing to a substantial decline in orders for manufactured durable goods.
Notwithstanding a late attempt at rebounding into positive territory, the Dow ended down 26 points or 0.3% at 9,071 and the Nasdaq closed lower by 7.75 points or 0.4% at 1,968. The S&P 500 declined by 4.47 points or 0.5% to 975.
Major European markets closed notably higher, with the German DAX index and the French CAC 40 index finishing up by 1.9% and 1%, respectively, while the U.K.'s FTSE 100 index edged up by 0.4%.
Crude oil dropped sharply on Wednesday after Energy Information Administration data revealed a sharp rise in weekly inventories. Oil closed at a 12-day low after reaching a three-week high earlier in the week.
Light sweet crude for September delivery dropped to US$62.85 per barrel on the New York Mercantile Exchange on Wednesday, down US$4.38 on the session. Prices dipped as low as US$62.70 earlier in the session after coming within a penny of US$69 on Tuesday.
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