RTTNews - Asian markets are trading firm on Tuesday, with the strong overnight surge on Wall Street on the back of an analyst upgrade on U.S. banks and optimism about earnings bringing investors back into the buying mode. The strong earnings forecast by POSCO, Korea's largest steelmaker, and the forecast by the Singapore trade ministry that its economy will shrink less than an earlier projection of a 9% contraction are also seen aiding sentiment today.
In the Australian market, resource-related stocks are up with impressive gains. Financials, healthcare and industrial stocks are also trading firm. The benchmark index S&P/ASX 200 is up 101.2 points at 3,838.7 and the All Ordinaries index is gaining 94.7 points at 3,832.7.
The mood is so bullish in the Australian market that all the fifty components of the S&P/ASX 50 index are up in positive territory now.
According to the monthly survey by the National Australia Bank, business conditions rose 12 index points to minus-2 points in June, the highest ratings since September 2008. All components of the business conditions index improved in June. The improvement in business conditions is attributed to a more positive outlook by firms about the state of the domestic economy.
Shares of Southern Gold Limited have skyrocketed this morning on reports that the company has intercepted significant gold mineralization in its first RC drilling program on its projects in northeast Cambodia. The stock is currently up 20% over its previous close.
In Tokyo, stocks rose sharply today and snapped a nine-day losing streak, with participants rushing in to cover short positions and looking for some bargain hunting. Stocks across the board were seen moving higher in the morning session, lifting the benchmark Nikkei 225 index up sharply in the process. A stronger U.S. dollar is also contributing to the surge in the Japanese market.
At the end of the morning session, the Nikkei, which was up 201.05 points or 2.22% at 9,251.38 at the end of the morning session, is currently trading at 9,267, up by around 217 points or 2.4% over its previous close.
In the currency market, the U.S. dollar traded in the lower 93 yen range early Tuesday in Tokyo, up from its overnight levels in New York on expectations major U.S. financial institutions will show a healthy performance. The yen is currently trading at 93.05 to the U.S. dollar.
Steel stocks JFE Holdings, Pacific Metals, Nippon Steel, Sumitomo Metal Industries and Kobe Steel are up by 3%-5%. Oil stock Inpex Corp. moved up by around 2.5%. Other oil stocks Nippon Mining Holdings and Showa Shell Sekiyu K.K. are also trading firm.
Among non-ferrous metals, Sumitomo Metal Mining, SUMCO, Toyo Seikan Kaisha, Sumitomo Electric Industries, Fujikura, Furukawa Electric, DOWA Holdings, Toho Zinc, Mitsui Mining, Furukawa, Nippon Light Metal and Mitsubishi Materials are all trading sharply higher today.
Among bank stocks, Sumitomo Mitsui Financial, Sumitomo Trust and Banking, Mitsubishi UFJ Financial Group, Resona Holdings, Fukuoka Financial, Chiba Bank, Bank of Yokohama and Mizuho Financial are trading sharply higher. Other financial services stocks also trade firm.
In the automobile space, Toyota Motor, Honda Motor, Suzuki Motor, Nissan Motor, Mazda Motor, Isuzu Motors and Hino Motors have firmed up by 2%-6%.
Major Japanese automakers such as Nissan Motor Co. and Honda Motor Co. are reportedly stepping up production capacity in China as brisk local demand helps prop up their earnings at a time when sales virtually everywhere else are in a steep slump. Nissan is boosting its work force at Chinese joint venture Dongfeng Motor Co. group by 1,200. Nissan aims to lift its overall output capacity in China by roughly 20%.
Honda plans to make production-line changes and increase automation at a factory in Hubei Province operated by Chinese joint venture Dongfeng Honda Automobile Co. This summer, annual output capacity will be lifted from 120,000 units to 200,000 units, with an eye toward a subsequent increase to 240,000 units. And with sales of the Civic sedan proving brisk, Honda plans to boost dealerships by 12% to 760 by the end of the year.
Other major players in the sector, Toyota Motor Corp., Suzuki Motor Corp. and Mazda Motor Corp. are also planning to begin production in China.
Sanyo Electric moved up for the first time in four days, surging more than 6% in early trading on bargain-hunting. A report that the consumer electronics maker will increase output of portable car navigation systems through a group company also aroused interest at the Sanyo Electric counter today.
Shares of NEC Electronics Corp. vaulted on technical rebound and on reports that the firm will increase output of microcomputers at a factory in Kumamoto operated by its subsidiary.
Shares of department store operator Matsuya Co. fell sharply after the company lowered its earnings outlook for the year ending February, to a group net loss of 600 million yen from the earlier projection of a profit of 100 million yen.
In the currency market, the U.S. dollar traded in the lower 93 yen range early Tuesday in Tokyo, up from its overnight levels in New York on expectations major U.S. financial institutions will show a healthy performance. The yen is currently trading at 92.84 to the U.S. dollar.
The South Korean market, which slipped into the red after trading firm for around a couple of hours, has edged higher once again and is currently trading in positive territory with modest gains.
Bank and technology stocks are mostly trading higher. Steel stocks Hyundai Steel and POSCO are moving up sharply.
Among oil stocks, SK Holding is down by about a percent while S-Oil is up with a modest gain. Energy stock KEPCO is trading nearly a percent up.
Automobile stocks are trading mixed. Airliners Korea Airlines and Asiana Airlines are exhibiting weakness. Telecom stocks are also seen trading lower.
Shipbuilding stocks, which had gone down sharply in the previous session, are edging higher today. Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding are up in positive territory with notable gains. Bulk carrier STX Pan Ocean is also trading higher.
The Korean benchmark index KOSPI, which had slipped to 1,377.60 after moving on to 1,402 in early trading, is currently up by around 9 points or 0.66% at 1.387.
Other markets in the Asia-Pacific region are also trading firm today. Hong Kong, Singapore and Shanghai are up sharply with their benchmarks gaining 1.25%-2.3%. Indonesia and Taiwan are up with notable gains, while the New Zealand market is trading modestly higher.
Amid positive analyst comments on the financial sector, Wall Street surged higher on Monday with bank stocks leading the way. The major averages saw some further upside going into the close, ending the session at their best levels of the day. The Dow closed up by 185.16 points or 2.3% at 8,331.68, the Nasdaq moved up by 37.18 points or 2.1% percent to 1,793.21 and the S&P 500 rose by 21.92 points or 2.5% to 901.05.
Major European markets closed firmly on the upside, with the German DAX Index and the French CAC 40 Index finishing up by 2.9 percent and 2.3 percent, respectively. The U.K.'s FTSE 100 Index also rose, posting a gain of 1.7 percent.
Crude oil prices drifted lower on Monday on concerns that a gloomy economic outlook could curb energy demand. On the New York Mercantile Exchange, light crude for August delivery slipped 20 cents from Friday's market close to end at US$59.69 a barrel.
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