RTTNews - Most markets in the Asia-Pacific region are trading in positive territory on Wednesday on hopes of a global economic revival and the overnight strong close on Wall Street, where some better-than-expected numbers from Merck, United Technologies and Coca-Cola and encouraging earnings guidance from Caterpillar triggered another impressive round of buying. With several top notch companies scheduled to release their quarterly earnings reports and future guidance over the next few days, a section of investors are wary of holding positions at higher levels and are seen indulging in some profit taking today.
However, with no negative news flow to hurt sentiment, the mood remains cautiously optimistic in most of the markets in the region. Even as markets in Indonesia and Korea are seen struggling a bit, the Australian, New Zealand, Taiwan and Shanghai markets are fairly well placed in positive territory today. Hong Kong is trading flat, while the Japanese market, which was up modestly at the end of the morning session, is moving up sharply on resumption of trading.
In the Australian market, stocks drifted lower after a positive start, but have rebounded again on strong buying at lower levels. The benchmark index S&P/ASX 200 is currently trading at 4,064, up 12.9 points or 0.3% over its previous close. Earlier, it had moved on to 4,075 after hitting a low of 4,051. The broader All Ordinaries index is up by 15.5 points or 0.4% at 4,064.
Energy, materials, utilities, industrials and consumer staples stocks figure among the prominent gainers. Financial and healthcare stocks are seen exhibiting some weakness.
National Australia Bank Ltd plans to raise A$2.75 billion in new capital and use the proceeds to maintain its balance sheet, pursue growth opportunities and improve its position in the small to medium sized enterprises market. The sale of new NAB shares announced on Wednesday comes after the bank raised a$3 billion in a similar rising in November 2008.
NAB also said its cash earnings totaled about A$900 million in the third quarter of its financial year, reflecting a solid performance under difficult economic conditions. Its bad and doubtful debt charge was A$1.064 billion for the June quarter, reflecting individual name exposures and downgrades in credit quality across all its businesses. But the bank said its provisioning ratios remained strong and customer deposit flows were continuing.
Shares offered under the placement will be priced at a minimum of A$21.20 each, with the final price to be determined by a bookbuild. The National Australia Bank stock is in a trading halt today.
Asciano Group subsidiary Pacific National has signed a new 10-year haulage contract with Xstrata Coal covering the New South Wales Hunter Valley and Port Kembla regions. The contract with Pacific National's largest coal customer replaces a number of existing contracts and commences from January 1, 2011. It is expected to generate total net revenue of more than $800 million for Asciano over the life of the contract. Asciano Group is currently trading flat.
In another news, Beach Petroleum has announced that it achieved record annual production and sales revenue for the 2008/09 financial year. In its quarterly report released to the stock exchange today, Beach Petroleum recorded total oil and gas production at 9.625 million barrels of oil equivalent (boe). This is up 3.2% on the 9.323 million boe recorded last financial year. The Beach Petroleum stock is currently up by 1.8%.
The Australian dollar opened higher this morning and was trading at US$0.8165/68 at noon, up from Tuesday's close of US$0.8112/15. The Aussie is currently trading at 0.8162 to the U.S. dollar.
In Tokyo, stocks dropped down to lower levels in morning trade despite an early surge. However, with investors rushing in to make fresh purchases at lower levels, the market has rebounded into positive territory once again.
Bank stocks are mostly trading weak. Sumitomo Mitsui Financial, Shizuoka Bank and Fukuoka Financial are down by 1% - 1.5%. Bank of Yokohama and Mitsubishi UFJ Financial are trading modestly higher.
Automobiles are trading mixed. While Suzuki Motor, Toyota Motor and Nissan Motor are trading in positive territory with modest gains, Hino Motors, Mazda Motor and Mitsubishi Motors are exhibiting weakness.
Chemicals, insurance and communications stocks are exhibiting a mixed trend. Non-ferrous metals and steel stocks are mostly down in the red. Machinery and electric machinery shares are also seen struggling this morning.
Shares of drug maker Shionogi & Co have advanced this morning following an announcement by the company that it had completed some of its phase II clinical trials on an HIV candidate drug being jointly developed in the U.S. with major British player GlaxoSmithkline. The stock is currently trading nearly 4% up on its previous close.
Shares of Electric Power Development Co. moved higher this morning after the company said the previous day it will build a natural gas-fired power plant in California. This will be the firm's first plant construction project in the U.S. The company will sell power to local utilities. After moving up by nearly 3% in early trading, the stock has pared most of the gains and is up just modestly at present.
The Japanese benchmark Nikkei, which was up just modestly at the end of the morning session, is currently trading 57 points or 0.6% up at 9,709.
In the currency market, the yen is trading at 93.53 to the U.S. dollar. In early trade this morning, the U.S. dollar traded in the mid-93 yen range, slightly down from its overnight levels in New York.
In Seoul, the KOSPI is having a choppy ride today with participants treading a cautious path and staying wary of holding stocks at higher levels. After an early surge into the positive territory, the KOSPI fell into the red in early morning trades and despite bouncing back sharply around mid morning, is currently seen struggling to hold gains due to fairly heavy selling in some technology and bank stocks.
At 1,488, the KOSPI is down marginally below the unchanged line. Earlier, after moving on to 1,496.5, the index had eased to 1,485.
Automobile stock Kia Motor is down by about 2%, while Ssangyong Motors and Hyundai Motors are trading higher by 0.6% and 1%, respectively.
In the technology space, Hynix Semiconductor and heavyweight Samsung Electronics are trading sharply lower. LG Electronics is up by 2.4%, while LG Display LCD is trading with a modest gain.
Bank stocks are trading mixed. While Shinhan Financial and Woori Finance are down in the red with sharp losses, KB Financial is trading flat and Korea Exchange Bank is up by 1.5%.
Steel stocks Hyundai Steel and POSCO are up with notable gains. Oil stocks SK Holdings and S-Oil are also trading firm. Energy stock KEPCO is up by around 2.5%.
Telecom stocks are trading modestly higher. In the shipbuilding space, Samsung Heavy Industries and Daewoo Shipbuilding are trading higher by 1.4% and 0.7%, respectively while Hyundai Heavy Industries is down by a percent. Hyundai Heavy Industries is reportedly planning to work with U.S.-based Lockheed Martin Corp to build and sell vessels with aegis system.
On Wall Street, stocks ended on a firm note on Tuesday with a slew of promising earnings reports keeping the mood positive. Testifying before the House Financial Services Committee, the U.S. Federal Reserve Chairman Bernanke stated that the U.S. economy is showing signs of stabilization and that the stimulus authorities pumped into the global economy late last year probably helped to avoid a collapse of the financial system. However, he has cautioned that the economy is still in a fragile state, with unemployment high and consumer spending shaky.
The Dow advanced 67.79 points or 0.8% to 8,916, the Nasdaq climbed 6.91 points or 0.4% to 1,916 and the S&P 500 rose 3.45 points or 0.4% to 955.
Major European markets all closed the day showing strong gains, with the German DAX index and the French CAC 40 index finishing up by 1.3% and 1%, respectively. U.K.'s FTSE 100 index saw a 0.9% surge.
Crude oil gained for the fifth session in a row and finished at its highest level in almost three weeks on Tuesday. Investors looked ahead to the government's inventory report on Wednesday. Light sweet crude for August delivery settled at US$64.72, up 74 cents on the session. The August contract closed at the end of the session.
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