RTTNews - After initial uncertainty, most markets in the Asia-Pacific region are trading firm on Wednesday with investors switching back to buying mode at lower levels. A fair amount of profit taking is still on but the mood remains cautiously positive in the region on hopes of a rapid economic recovery. While the Australian market has received some support from GDP data, the Japanese is receiving some support from buying at lower levels following some early weakness.
Buying was extremely selective in the Australian market earlier in the day. However, with the mood turning a bit upbeat following the release of GDP figures, stocks across various sectors are surging higher now.
Energy, materials, utilities and healthcare stocks are trading with sharp gains. Bank stocks have come back strongly and are trading firm. Heavy buying is seen at several counters in the industrials space as well.
The benchmark Australian index S&P/ASX 200 is trading 39.90 points up at 3,995. The broader All Ordinaries index is up 41 points at 3,989.
According to the report from the Australian Bureau of Statistics, the country has escaped a technical recession with real gross domestic product moving up by a seasonally adjusted 0.4 per cent in the first quarter of the year. This compared with a revised fall of 0.6 per cent in the December quarter.
In the September quarter of 2008, GDP rose at a revised 0.2% rate. GDP figures released in March recorded the economy's first backward step in eight years. Today's figures were widely tipped to send the country into its first recession since 1990. Market economists had previously forecast the economy to have contracted 0.2 per cent in the March quarter, but revised their predictions upward following the release of better-than-expected trade figures yesterday.
In the currency market, the Australian dollar advanced further against the euro and the US dollar following the release of the GDP data. At 9:40 pm ET, the Aussie jumped to new multi-month highs of 1.7349 against the euro and 0.8183 against the US dollar. Currently, the Australian dollar is trading at 0.8229 to the U.S. dollar.
In Tokyo, stocks fell after an early rise but forced their way up once again towards the end of morning session on strong buying at lower levels. Steel, non-ferrous metals, machinery and pharmaceuticals stocks were trading firm. Automobile and bank stocks edged off their lows while construction and food stocks were exhibiting a mixed trend.
Japan Airlines Corp. shares rose sharply after numerous sources reported that a syndicate of three mega-banks and the Development Bank of Japan will lend the firm about 100 billion yen. It is reported that a syndicate of Japan's three biggest banks and the state-backed Development Bank of Japan are planning to lend about 100 billion yen to Japan Airlines Corp. as early as this month. JAL will use the loan to shore up its short-term cash position, according to sources familiar with the matter.
Shares of machinery maker Komatsu Ltd. which had extended its winning streak to a sixth straight session on Tuesday on reports that the company will produce diesel-electric excavators in China, were in demand in morning trade today. The stock ended the morning session with a gain of 1.2%.
The Nikkei was up 34.95 points at 9,739 at the break. The index had ended at 9,704, up 26.56 points, on Tuesday.
In the South Korean market, bank stocks are seeing a sell-off of sorts. After an early struggle, oil, energy and steel stocks are off their lows thanks to renewed buying support. Fairly strong buying is seen in the shipbuilding space today.
The Korean benchmark index KOSPI, which is moving in a highly choppy fashion today, is currently up 3.08 points at 1,416. Earlier, after moving on to 1,427, it had drifted down to 1,403.
Among other markets in the Asia-Pacific region, Hong Kong is doing pretty well with its benchmark Hang Seng gaining 1.6% or nearly 300 points. New Zealand and Singapore markets are also trading firm. Shanghai and Indonesia are up modestly.
Price movements were quite choppy, but Wall Street still ended Tuesday's session on a firm note as investors reacted positively to the data on pending home sales which turned out to be better-than-expected with homebuyers responding to very favorable market conditions.
The major averages ended modestly higher, although well off their best levels of the day. The Dow finished up by 19.43 points or 0.2 percent at 8,741, the Nasdaq closed up 8.12 points or 0.4 percent, at 1,837 and the S&P 500 finished up by 1.87 points or 0.2 percent at 945.
In the Asia-Pacific region, stock markets had finished on a mixed note with profit taking wiping off early gains. Major European markets also turned in a mixed performance. The French CAC 40 Index slipped by less than a tenth of a percent, while the German DAX Index rose by a minute margin. The U.K.'s FTSE 100 Index dropped by 0.7 percent.
Oil prices were flat on Tuesday amid choppy trading as investors awaited the Energy Information Administration's weekly inventory report. Crude oil prices finished at US$68.55 per barrel, down US$0.03 on the choppy session. Prices touched as high as US$69.05 after hitting a low of US$67.50.
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