RTTNews - Better than expected results from Goldman Sachs and Intel Corp. as well as fairly decent growth in retail sales kept Wall Street in positive territory on Tuesday. Taking cues, Asian markets are trading firm on Wednesday, with investors picking up stocks on renewed hopes about a global economic recovery.
The Australian market, which drifted lower after a sharp surge, has rallied once again on strong buying in energy, materials, consumer staples and industrials stocks. Bank stocks are also mostly trading higher.
Materials stocks Rio Tinto, Bluescope Steel, Fortescue Metals, Orica and Onesteel are trading with notable gains. BHP Billiton and Newcrest Mining are trading modestly higher.
According to reports, mining majors BHP Billiton and Rio Tinto are not keen on commenting on claims they have halted spot iron ore shipments to China. Spot prices for iron ore shipments to China have jumped in recent weeks to almost US$90 per tonne, well above the contract sale price settled with major steelworks in Japan and South Korea.
In other news, Dioro Exploration NL says it is in talks with third parties regarding a potential takeover bid to rival Avoca Resources Ltd's improved hostile offer, which it has rejected. The Dioro Exploration stock is up 8.25%. Avoca Resources is currently trading 2.5% up over its previous close.
Energy stocks Woodside Petroleum, Santos and Origin Energy are trading up by 1.2%-1.5%. In the banking space, National Australia Bank, Westpac and Commonwealth Bank of Australia are trading higher, while ANZ Bank is down with a modest loss.
Information technology firm Data 3 expects an annual net profit growth of about eight per cent despite difficult conditions in the second half of the financial year. The company said total revenue for the 2008-09 financial year was expected to be approximately A$530 million, compared to A$363.7 million in fiscal 2008. Earnings before interest and tax for the year to June 30 are expected to be around A$13.2 million, up 9% from A$12.1 million in 2007/08. The company's stock is currently trading up 3.5% over its previous close.
The Australian benchmark index S&P/ASX 200 is up nearly 54 points at 3,921 and the broader All Ordinaries index is trading 54 points up at 3,912.8.
In the currency market, the Australian dollar opened higher this morning, as better-than-expected results from Goldman Sachs boosted higher risk assets such as equities and commodity-based currencies. In early trading today, the Aussie was quoting at US$0.7926/32, up 0.99% over Tuesday's close of US$0.7849/52. The Australian dollar is currently trading at 0.7938 to the U.S. dollar.
The Japanese market opened on a firm note on strong Wall Street cues and despite paring early gains, was trading in positive territory at the end of the morning session today. While strong cues from Wall Street triggered some hectic buying in early trading, stock prices drifted lower subsequently amid concerns over political uncertainty and caution ahead of domestic earnings.
The Nikkei is currently trading at 9,312, up by around 50 points or 0.52% over its previous close.
Iron & steel, non-ferrous metals and sea transport stocks rose sharply in early trading in Tokyo, while bank, technology and rubber products stocks drifted lower.
Shares of steel major Nippon Steel Corp. gained in strength after the company said it will restart one of two blast furnaces that have been idle since February. The company plans to do this in August in order to meet increasing demand. However, due to selling at higher levels, the stock has pared its gains and is trading just modestly higher now.
Asahi Glass Co. surged higher on a likely group operating profit of 2 billion-4 billion yen for the January-June period. Previously, the company said it likely broke even for the period. Asahi Glass posted a profit of 109.5 billion yen for the first six months last year. The stock is up by over 3% this morning.
Shares of electronics major Panasonic Corp. rose sharply on reports the company will mass-produce a new type of battery for cars loaded with an idling-stop function. The company is reportedly aiming to make batteries for 1 million cars by fiscal 2015. However, after an early surge, the stock has drifted lower, paring most of the gains in the process. The stock is currently up just modestly over its previous closing price.
According to a release from the Real Estate Economic Institute, the number of new condominiums put on the market in the Tokyo region sank 26% on the year to 15,898 in the January-June half year. New-condo numbers have now fallen for five years straight in the first half, tumbling to the lowest level since the bursting of the bubble economy in 1992. For the full year, new condos are seen at just shy of 35,000, down 9,000 compared with a year earlier.
The South Korean market opened on a rousing note on Wednesday, with investors picking up technology, shipbuilding and automobile stocks in early trading. The overnight surge on Wall Street on good results from Goldman Sachs and the firm trend in other markets in the Asia-Pacific region are aiding sentiment to a significant extent.
The Korean benchmark index KOSPI is currently trading at 1,418, up by around 32.5 points or 2.34% over its previous close.
Technology heavyweight Samsung Electronics is up 3.7%. Hynix Semiconductor and LG Display LCD are also trading with sharp gains. LG Electronics is up with a modest gain.
Shipbuilders Hyundai Heavy Industries, Daewoo Shipbuilding and Samsung Heavy Industries are trading with notable gains. Shares of bulk carrier STX Pan Ocean are moving up by around 5%.
In the banking space, Korea Exchange Bank is up by 2.2% and Woori Finance is up by a modest 0.5%, while Shinhan Group and KB Financial are trading flat. Among automobile stocks Kia Motor, Hyundai Motors and Ssangyong Motors are trading firm. Airliners Korea Airlines and Asiana Airlines are also trading higher.
Oil stocks SK Holdings and S-Oil and energy major KEPCO are in demand. Steel stocks Hyundai Steel and POSCO are also trading higher.
In the currency market, the Korean won was trading at 917.1 to the U.S. dollar, up 1.5 won from Tuesday's close.
The People's Bank of China has announced that Chinese foreign reserves rose 17.8% year on year to 2.1316 trillion dollars as of the end of June, topping 2 trillion dollars for the first time ever.
Among other markets in the Asia-Pacific region, Hong Kong, Taiwan and Shanghai are trading with sharp gains. Markets in Indonesia and Singapore are also trading firm. The New Zealand market, however, is trading flat amid lackluster movements. The stock markets across the region had ended Tuesday's session notably higher, with Japan's benchmark Nikkei 225 Index and Hong Kong's Hang Seng Index gaining 2.3% and 3.7% respectively.
Amid a spate of earnings reports and economic data, stocks moved in a choppy way on Wall Street on Tuesday. The major averages all finished in the green by moderate margins, extending their gains for a second straight session.
On the economic front, a report released by the Commerce Department revealed that retail sales increased by a little more than expected in the month of June, although the sales growth was due in large part to higher gasoline prices.
According to the U.S. Labor Department, producer prices rose 1.8% in June following a 0.2% increase in the previous month. Core producer prices, which exclude food and energy prices, climbed 0.5%.
The Dow closed up by 27.81 points or 0.3% at 8,359.49, the Nasdaq advanced by 6.52 points or 0.4% to 1,799.73 and the S&P 500 rose by 4.79 or 0.5% to 905.84.
Major European markets also moved to the upside, with the German DAX Index and the French CAC 40 Index finishing up by 1.3% and 1% respectively. The U.K.'s FTSE 100 Index also rose, posting a gain of 0.9% on the day.
Crude oil finished lower for the ninth time in ten sessions and below US$60 on Tuesday. Light sweet crude for August delivery fell to US$59.52 per barrel, down 17 cents on the session. Prices touched as high as US$61.46 earlier in the session, but later hit as low as US$59.15.
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