RTTNews - Asian markets are trading firm on Friday with participants rushing in to pick up stocks on strong overnight cues from Wall Street. Renewed optimism about an economic revival and bargain-hunting after the terrible setback in the previous session have also contributed to the sharp surge.
Better-than-expected March machinery orders data and Sony's brighter outlook for financial year 2009-10 aided sentiment in the Japanese market.
Machinery orders for March fell 22.2 percent year-on-year, but the fall was smaller than what was forecast earlier. In other economic news, Japan's corporate goods price index sank 3.8% year-on-year to 103.6 in April, marking the steepest fall since June 1987, reflecting slumping demand and plunging raw materials prices. On a month-on-month basis, the index dipped 0.4% for the eighth consecutive decline.
Stocks across various sectors moved up sharply and the benchmark Nikkei 225 index was up 151.24 points or 1.66% at 9,244.97 at the end of the morning session. The Nikkei had closed 247 points or 2.64% down at 9,094 on Thursday.
Bank, automobile, construction and real estate stocks attracted heavy buying. Insurance, textiles, machinery and pharma stocks were also trading firm this morning.
Shares of electronics maker Sony Corp. moved up sharply after the company forecast a small than expected loss for the current year. The stock was up nearly 6% at the break. For the year ending March 2010, Sony sees a 6% drop in group sales to 7.3 trillion yen and an operating loss of 110 billion yen. Its net loss will likely come to about 120 billion yen. The company has refrained from releasing dividend payout plans.
Sony suffered a group net loss of 98.9 billion yen in the year ended March 31, on falling prices of LCD televisions and other electronic products. A stronger yen and weaker-than-expected video game system sales also contributed to the loss. The firm had posted a profit of 369.4 billion yen a year earlier. With sales tumbling down by 13%, Sony posted an operating loss of 227.7 billion yen, a sharp reversal from a 475.2 billion yen operating profit a year earlier. The firm intends to close three domestic and two overseas production bases by December as part of its streamlining efforts.
In the Korean stock market, technology, steel and bank stocks are the prominent gainers. Automobile stocks are also trading firm. Shipbuilders, airliners and oil stocks are exhibiting a mixed trend. The Korean benchmark index KOSPI is up 16.06 points or 1.16% at 1,397.01.
Materials and energy stocks are on a roll in the Australian market this morning. Bank, consumer staples, industrials and healthcare stocks are also trading firm.
The Australian benchmark index S&P/ASX 200 is up 64.50 points at 3,787.90. The All Ordinaries index is trading at 3,773, gaining 62.20 points over its previous close.
Shares of miner Rio Tinto rose sharply following the U.S. committee on Foreign Investment clearing its proposed tie-up with the Aluminium Corporation of China. As per the deal proposed in February this year, Chinalco would provide funds to pay down some of Rio Tinto's US39 billion in debt besides increasing its stake in the miner from 9.3 per cent to 19 per cent. Rio Tinto is currently trading 8.5% up.
Among other stocks in the material space, BHP Billiton, Incitec Pivot, Newcrest and Orica are trading firm.
In the energy space, Santos and Worleyparsons are trading sharply higher. Origin Energy and Woodside Petroleum are also trading firm with notable gains.
Among other markets in the Asia-Pacific region, Hong Kong, Taiwan, Singapore, Indonesia and New Zealand are trading firm. Hong Kong's Hang Seng index is currently trading nearly 2% up. The major averages of Taiwan, Singapore and New Zealand are up by 1%-2.15%. The Jakarta Composite index of the Indonesian market is trading 0.6% up.
Bucking the trend, the Chinese market is trading weak with the Shanghai Composite average moving down by 4.36 points.
The stock markets across the Asia-Pacific region saw notable weakness on Thursday following the sell-off on Wall Street overnight. Most of the indices in the region ended sharply lower on widespread selling.
However, major European markets ended the day above the unchanged line, benefiting from some late-day strength. The U.K.'s FTSE 100 Index rose 0.7 percent, while the French CAC 40 Index and the German DAX Index edged up 0.1 percent and 0.2 percent, respectively.
On Wall Street, despite a bigger than expected increase in unemployment claims for the week ended May 9th, stocks surged higher on Thursday as traders went bargain hunting after recent setbacks.
Finishing off their highs, the Dow and Nasdaq gained 46.43 points and 25.02 points respectively and the S&P 500 closed up 9.15 points.
According to the data released by the Labor Department, initial jobless claims rose to 637,000 from the previous week's revised figure of 605,000. Economists had been expecting jobless claims to edge up to 610,000 from the 601,000 originally reported for the previous month.
Additionally, the report showed a continued increase in continuing claims, which rose to a new record high of 6.560 million in the week ended May 2nd from the preceding week's revised level of 6.358 million. The continued increase in continuing claims reflects an ongoing hiring freeze.
In other economic news, producer prices increased by a little more than expected in the month of April, according to a separate report released by the Labor Department, with the increase in prices partly due to a rebound in food prices.
A slew of economic data is scheduled to be released on Friday, including the Labor Department's report on consumer price inflation in the month of April. Economists expect consumer prices to come in unchanged after edging down 0.1 percent in March. Trading could also be impacted by the release of reports on industrial production, consumer sentiment, and regional manufacturing activity.
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