RTTNews - Buoyed by strong earnings reports and home sales data from the U.S., the impressive surge on Wall Street overnight and growing optimism about the global economy, Asian markets are trading higher on Friday, with a few of them extending their winning streak to seven or eight sessions.
Stimulus plans worked out and implemented by various governments across the globe over the past few months have started fetching results and the number of top notch companies coming out with better-than-expected earnings reports has been increasing by the day. With investor sentiment hitting a new high in recent months, markets across the region have been gaining in strength almost consistently and so positive has been the mood on the Asian bourses over the past few days that the MSCI Asia Pacific Index is on its longest winning streak in five years.
Despite trading off its morning high, the Australian market remains fairly up in positive territory now. Energy, materials and financials stocks led the charge in early trading there. Though a few stocks from the banking space have drifted down subsequently, energy and materials stocks are still in focus.
The benchmark index S&P/ASX 200, which had surged to 4,122.1 this morning, is currently up by 35.6 points or 0.9% at 4,099.7. The broader All Ordinaries index is up 37.2 points or 0.9% at 4,109.8, well off the day's high of 4,130.4.
Consumer staples, industrial and telecommunication stocks are mostly trading higher, while healthcare and information technology stocks are exhibiting some weakness.
Hurt by falling crude oil prices, Woodside Petroleum's bottom line took a hit with revenues declining sharply in the second quarter. Australia's second-biggest oil and gas producer said revenue for the June quarter was A$938 million, down 36% from the prior-year corresponding period. Production at Woodside was up 1% in the quarter on a year-for-year basis, and sales rose 2%, the company said in a report to the stock exchange today. The energy stock is currently up with a gain of 1.5%.
In the currency market, the Australian dollar was weaker at noon, as speculation over future monetary policy stymied risk appetite. The Aussie was trading at US$0.8140/43 at noon, down from Thursday's close of US$0.8191/97. Currently, the Australian dollar is trading at 0.8144 to the U.S. dollar.
In Tokyo, stocks surged higher on strong cues from Wall Street and a weaker yen. Extending its gains to an eight successive session, the Nikkei rose to 9,943 this morning and is currently trading at 9,931, up 138.1 points or 1.42% over its previous close.
Shares of automobile majors Toyota Motor Corp., Honda Motor and Suzuki Motor Corp. rose sharply amid fading uncertainty over the global economy and corporate earnings. Hino Motors, Isuzu Motors and Mitsubishi Motors also surged higher this morning.
Shares of electrical machinery makers Meidensha Corp. and GS Yuasa Corp. are gaining ground following the launch of the i-MiEV electric car by Mitsubishi Motors. Meidensha supplies motors and inverters for the car while GS Yuasa supplies batteries.
In the banking space, Sumitomo Mitsui Financial, Resona Holdings, Chiba Bank, Sumitomo Trust and Banking and Shizuoka Bank and Bank of Yokohama are trading with notable gains.
Steel stocks JFE Holdings, Pacific Metals, Kobe Steel, Sumitomo Metal Industries and Nippon Steel are up by 2%-4%.
Sumitomo Metal Mining, Toho Zinc, Mitsubishi Materials are the prominent gainers in the non-ferrous metals space.
Pharmaceuticals and chemicals stocks are mostly trading higher. Construction and textiles stocks are also up in positive territory. Foods stocks are trading mixed.
Shares of Fast Retailing Co. drifted down into the red after opening sharply higher this morning. The stock has tumbled as investors seemed to brush aside reports that the company will open its Uniqlo outlets inside major department stores, including Seibu.
Nippon Steel Corp. and JFE Holdings Inc. are trading higher despite reports that the two steelmakers both likely posted group pretax losses of some 60 billion yen in the April-June quarter. Investors were little fazed by the red ink as the figures were largely in line with market predictions. A production recovery in the July-September period is also seen as likely.
In the currency market, the U.S. dollar stayed in the upper 94 yen range early Friday in Tokyo, almost unchanged from its overnight levels in New York. The dollar fetched 94.93-98 yen, compared with Thursday's closing quotes of 94.87-97 yen in New York and 94.35-36 yen in Tokyo. Currently, the yen is trading at 94.62 to the U.S. dollar.
After opening modestly higher and edging up a bit in early trading, the Korean market has pared some of its gains due to profit taking in a few technology and automobile stocks.
The benchmark index KOSPI, which moved on to 1,511 in early trading today, is currently up by 8 points or 0.52% at 1504.53.
Hynix Semiconductor rose by around 2.5% as the company's net loss for the second quarter narrowed to KRW58 billion from KRW711 billion a year ago. Though the result was worse than what was expected, Hynix said it expected better earnings in the second half of the year, largely because of strong seasonal demand. The stock is currently trading with a modest gain of 0.7%.
Among other technology stocks, Samsung Electronics and LG Electronics are up by 0.3% and 0.8% respectively while LG Display LCD is down by 0.9%.
Among automobile stocks, Hyundai Motor is up by about a percent. Hyundai posted a net profit of 811.9 billion won in the second quarter, strongly beating a forecast of a 456 billion won net profit by analysts. The company's operating profit during the quarter ended on June 30 was 657.3 billion won, better than what was expected. At 8%, the company's operating profit margin was the highest in the last five years. Kia Motor is trading 1.7% up while Ssangyong Motors is trading with a modest 0.6% gain.
In the shipbuilding space, Hyundai Heavy Industries and Daewoo shipbuilding are up modestly while Samsung Heavy Industries is down by 1.3%. Bulk carrier STX Pan Ocean is trading up by over 1%.
Among bank stocks, Korea Exchange Bank is down with a modest loss. Woori Finance is gaining over 4% while KB Financial and Shinhan Financial are up by 1.4% and 0.5% respectively.
Oil stocks are trading flat. Energy major KEPCO is also trading weak. Steel stocks Hyundai Steel and POSCO are up by 3.2% and 1.7% respectively.
Airliners Korea Airlines and Asiana Airlines are trading firm while telecom stocks exhibit a mixed trend.
In economic news, South Korea's GDP grew a seasonally adjusted 2.3% from a 0.1% on-quarter gain in the first quarter, for the fasted growth since the fourth quarter of 2003. However, the market is not seeing any significant reaction to the second quarter GDP data as the figures are in line with expectations.
Among other markets in the region, Shanghai, Indonesia, Singapore and New Zealand are trading higher, with their benchmark indices gaining 1.25%-1.5%. The Hong Kong market, which has recovered after a fall from higher levels, is trading modestly higher at present. Taiwan is also up in positive territory with modest gains. Stock markets across the region had finished on the upside on Thursday.
On Wall Street, stocks surged higher and ended on a firm note on Thursday on encouraging reports from the National Association of Realtors and the Labor Department. While existing home sales rose by a better-than-expected 3.6% in June, jobless claims rose by slightly less than economists had expected. Better-than-expected results from a few top firms including 3M, Ford and Wyeth also aided sentiment to a notable extent.
The Dow closed up by 188.03 points or 2.1% at 9,069.29 while the Nasdaq extended its winning streak to a twelfth successive session and settled 47.22 points or 2.5% up at 1,973.60. The S&P 500 moved up by 22.22 points or 2.3% to 976.29.
Major European markets also closed notably higher. While the German DAX index and the French CAC 40 index finished up by 2.5% and 2.1% respectively, the U.K.'s FTSE 100 index posted a 1.5% gain.
Crude oil prices turned sharply higher on Thursday as an encouraging housing report provided a boost for the prospects of energy demand. The rally took prices to a three-week high. Light sweet crude oil for September delivery closed at US$67.16, up US$1.76 on the session. Prices touched as high as US$67.49 after hitting as low as US$64.40 earlier in the session.
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