RTTNews - Encouraging economic data and the overnight sharp surge on Wall Street buoyed up Asian markets once again and lifted most of the key indices in the region to new multi-month highs on Tuesday. Some of the markets in the region have come off their morning highs due to profit taking but the mood remains quite bullish on rising hopes of a swift economic revival. With report cards for the April - June quarter throwing in some positive surprises, investors across the globe appear to be moving to the equity markets once again resulting in several stocks vaulting to their new year-to-date highs.
In the Australian market, resources and bank stocks are on a roll. The benchmark index S&P/ASX 200 is trading at 4,327, up 63.3 points or 1.5% over its previous close. The broader All Ordinaries index is up by 61.1 points or 1.4% at 4,332.
Key miners BHP Billiton and Rio Tinto are trading stronger by 3.5% and 5.5% respectively, contributing substantially to the market's sharp rise today. Newcrest Mining, Fortescue Metals and Bluescope Steel are also trading firm. Woodside Petroleum, Santos and Origin Energy are trading notably higher.
ANZ Banking Group Ltd has agreed to buy some of Royal Bank of Scotland Plc's Asian businesses for about US$550 million ($A687 million), as it pursues its strategy to become a super regional bank. The bank will buy the retail, wealth management and commercial businesses in Taiwan Singapore, Indonesia and Hong Kong, as well as RBS's institutional banking businesses in Taiwan, the Philippines and Vietnam.
The businesses are expected to add to earnings per share within two years of completing their takeover, Melbourne-based ANZ said in a statement on Tuesday. The ANZ Bank stock is trading up by 2.75% now. Among other key stocks in the banking space, Commonwealth Bank of Australia is up by 2.3%, National Australia Bank is gaining 1.3% and Westpac Banking Corporation is trading 1.2% up. Diversified financials stock Macquarie Group is up by about 1.5%.
Shares of Navitas Ltd are surging higher today on strong results. The company increased full-year profit 31.4% and said it is well placed to deliver double-digit earnings growth in 2009/10. Net profit of the company rose to A$49.2 million for the 12 months to June 30 compared with A$37.2 million in the year to June 30, 2008. Revenue rose 36% to A$470.7 million. The stock is currently trading higher by about 3%.
Starpharma Holdings Ltd expects a net loss after tax of about A$4.1 million for the 2009 financial year, a 45% improvement on the prior year. The company said on Tuesday that the result compared with a net loss of A$7.5 million in 2007/08. The company said factors contributing to the 2009 result included an increase in royalty and licence income from partners, lower operating costs, and favorable exchange rate movements. The stock is down in negative territory with a sharp 4.4% loss.
In economic news, the Australian house price index rose 4.2% in the June quarter, the Australian Bureau of Statistics said today. This compares with an upwardly revised 1.5% fall in the March quarter. In the year to June, the house price index fell 1.4%. The median market forecast was for the house price index to have risen 2.0 per cent in the June quarter and to have fallen 4.9 per cent in the year to the June quarter.
In the currency market, the Australian dollar rose on better-than-expected housing data and hopes of an interest rate hike by the end of the year. The Aussie, which was trading at US$0.8456/58 at noon, is currently trading at 0.8451 to the U.S. dollar.
In Tokyo, stocks opened on a firm note on Wall Street cues and recovery hopes but have drifted down a bit in the afternoon session due to profit taking. The Nikkei, which rose to a new 10-month intra-day high this morning as it hit 10,479, is currently trading at 10,410, up 57.8 points or 0.56% over its previous close.
Bank stocks are trading mostly higher with investors going in for some buying following an overnight rally in the sector in the European and U.S. markets. Mitsubishi UFJ Financial is trading higher for the third straight day. The stock, which rose to a new year-to-date high this morning, subsequently gave up some gains on profit taking.
In the automobile space, Toyota Motor, Honda Motor, Hino Motors, Mazda Motor, Nissan Motor and Isuzu Motors are up by 1% - 3%.
Yamaha Motor Co. said that it fell into the red for the first half ended June 30 and expects even deeper losses for the full year 2009, revealing pessimism about the global economic outlook as it scales back production. The motorcycle maker suffered a net loss of Y74.71 billion for the January-June period, compared with a year-earlier profit of Y25.85 billion. In the second quarter ended June, the company made a net loss of Y58.95 billion, but didn't provide the year-earlier comparison. After a positive start, the stock has drifted lower and is trading in negative territory now.
Shares of trading firms Mitsubishi Corp., Mitsui & Co. and Toyota Tsusho Corp are trading higher. Nomura Holdings, Matsui Securities, Daiwa Securities and Mizuho Securities are also up with notable gains.
Panasonic Corp. hit a new year-to-date high of 1,541 yen this morning following the company raising its April - September earnings outlook. However, after the heady start, the stock has pared most of the gains and is currently trading just modestly higher than its previous closing price.
In the currency market, the U.S. dollar traded at the lower 95-yen level early Tuesday in Tokyo. The yen is currently trading at 95.29 to the U.S. dollar.
The Korean market too has pared early gains due to profit taking. Bank, telecom and shipbuilding stocks are off their highs while automobile, technology and steel stocks are mostly trading firm.
The Korean benchmark index KOSPI, which rallied to 1,586 earlier in the day, is currently trading at 1,574, up 9 points or 0.55% over its previous close.
Automobile stocks Kia Motor and Hyundai Motor are trading sharply higher. Ssangyong Motor, which had gone down sharply in the previous session, is trading flat.
In the technology space, Hynix Semiconductor is up by about 3%, heavyweight Samsung Electronics is trading up by over 1% and LG Electronics is trading higher by 1.2%.
Bank stocks Woori Finance and Shinhan Financial are down with sharp losses. Korea Exchange Bank is trading lower by 0.8%, while KB Financial is up with a modest gain.
Oil stocks SK Holdings and S-Oil are up by 2.8% and 1%, respectively. Energy major KEPCO is down by nearly 1%. Among steel stocks, Hyundai Steel is trading 1.2% up, while POSCO is gaining 1.5%.
Among shipbuilders, Hyundai Heavy Industries and Samsung Heavy Industries are trading weak while Daewoo Shipbuilding is up by 2.7%. Bulk carrier STX Pan Ocean is down by 1.2%.
Airliners Korea Airlines and Asiana Airlines are trading up by 2.2% and 1.2%, respectively. Telecom stocks exhibit weakness.
Among other markets in the Asia-Pacific region, Hong Kong, Indonesia and New Zealand are trading notably higher while Taiwan and Singapore are up with modest gains. The Shanghai market is exhibiting weakness. Stock markets across the region had finished Monday's trading mostly higher.
Fueled by better-than-expected economic data, stocks surged higher on Wall Street on Monday. The Nasdaq and the S&P 500 moved past the key technical levels of 2,000 and 1,000, respectively.
A report from the Institute for Supply Management showed a much slower than expected pace of contraction in manufacturing activity in July and significant improvements in new orders and production. Data from the U.S. Commerce Department revealed that construction spending rose 0.3% percent in June following a revised 0.8% slide in May. Economists were expecting a decline of 0.5% for the month.
The Dow closed up by 114.95 points or 1.3% at 9,287, the Nasdaq ended up 30.11 points or 1.5% at 2,009 and the S&P 500 moved up by 15.15 points or 1.5% to 1,003.
Major European markets closed notably higher, with the French CAC 40 index and the German DAX index posting gains of 1.5% and 1.8%, respectively, while U.K.'s FTSE 100 index gained 1.6%.
Crude oil continued its upward surge on Monday, extending a seven-week high. Encouraging economic data improved the prospect of energy demand. Light sweet crude for September delivery rallied to US$71.58, up US$2.13 on the session. Prices reached as high as US$72.10 earlier in the day.
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