RTTNews - Asian markets are exhibiting a mixed trend on Thursday with some of the markets in the region giving up early gains amid a cautious mood. Aided by a strong rally overnight on Wall Street and a sharp surge in crude oil prices on hopes of a surge in demand, most of the markets in the Asia-Pacific region got off to a bright start today.
However, with doubts about the pace of economic recovery still weighing in to a notable extent, some of the markets in the region struggled to hold at higher levels and drifted down sharply in subsequent trades.
The Australian market got off to a rousing start with energy, materials and bank stocks garnering attention. Besides the positive close on Wall Street and rising crude oil prices, a slew of better-than-expected earnings reports also contributed to the early surge.
However, after rising to 4,425 in early trading, the Australian benchmark index S&P/ASX 200 has drifted lower and is currently up by just 1.4 points at 4,375 due to fairly heavy selling in healthcare, property and utilities stocks. Financials, consumer staples and materials are off their highs. Select energy stocks are trading firm. The All Ordinaries index is up 1.5 points at 4,389.
Woodside Petroleum is trading nearly 5.5%. Among other energy stocks, Oil Search is up by 2.7%, while Origin Energy and Santos are trading with modest gains.
In the materials space, Rio Tinto is down by 1.2%, BHP Billiton is trading with a modest gain, Orica is gaining 2.6%. Bluescope Steel, Fortescue Metals and Newcrest Mining are trading with modest gains.
Among key bank stocks, ANZ Bank and Westpac Banking Corporation are trading weak while Commonwealth Bank of Australia and National Australia Bank are up with modest gains. Macquarie Group has pared gains and is trading flat.
Wesfarmers Ltd has posted a 44% rise in annual profit and says it is cautiously optimistic about the economic outlook although retail-trading conditions are hard to predict. Wesfarmers net profits rose to A$1.535 billion in the year ended June 30, from A$1.063 billion in the previous year. The stock, however, is down in the red with a sharp loss of 4.8%.
Adelaide Brighton Ltd says it has avoided the worst of the global economic crisis, after recording an eight per cent drop in first half profit. The South Australian cement and lime supplier said net profit after tax was A$43.9 million in the first half of fiscal 2009, to June 30, a fall of A$3.8 million, or 8%, on the corresponding period last year. The stock is currently trading down by about 2.2%.
QBE Insurance Group reported a 19% rise in net profit for the six months to June 30 to A$1.018 billion despite volatile conditions. QBE attributed the profit jump to strong premium growth, a weaker Australian dollar, the impact of its 2008 acquisitions and profits on the repurchase of QBE debt securities. The insurance stock is trading nearly 7% up now.
Brambles Ltd has posted a 30% drop in annual net profit and forecast a return to its traditional sales revenue strength as the global economy recovers. The logistics group posted net profit for the year to June 30 of US$452.6 million (A$545.89 million), down from US$648.7 million in the previous corresponding period. Brambles reported underlying profit of US$900.6 million (A$1.09 billion), down 8% on the previous year on a constant currency basis. The stock is up by about 6%.
According to a report from the Reserve Bank of Australia, Australians spent A$19.365 billion on their credit and charge cards in June, an increase of 9.19% from the previous month and the highest monthly total in 2009. The value of all purchases rose 8.94% to A$18.397 billion - the highest monthly total this year - while cash advances were up 14.19% at A$998 million.
In the currency market, the Australian dollar opened higher today following a rally in equity markets and higher commodity prices. In early trading this morning, the Aussie was quoting at US$0.8287/89, up from Tuesday's close of US$0.8207/09. The Australian dollar is currently trading at 0.8299 to the U.S. dollar.
In Tokyo, stocks rallied after a fall from higher levels following a rebound in the Chinese markets. The Nikkei ended the morning session at 10,279.2, up by around 75 points or 0.74%.
Oil-related shares in were among the major gainers, with investors taking a cue from the overnight Wall Street gain on a surge in crude oil prices. Inpex Corp. and Japan Petroleum Exploration Co. rallied higher in morning trading on a sharp overnight rise in crude oil futures in New York and London, which boosted investor expectations for higher profits. Nippon Mining Holdings, Nippon Oil Corporation and Showa Shell Sekiyu also traded firm.
Chemicals and pharmaceuticals stocks traded exhibited a mixed trend. Machinery and electric machinery stocks were also seen trading mixed this morning. Foods stocks were mostly up in positive territory. Automobile and banking sectors witnessed stock specific action. Select non-ferrous metals stocks surged higher.
Kobe Steel opened on a strong note today on reports that the government will provide subsidies to the steel maker and four other firms to help them develop parts and materials used in nuclear reactors, in a bid to boost exports of nuclear power plants. However, after early buoyancy, the stock drifted lower.
Shares in Sumitomo Metal Mining Co. moved up sharply after the firm said Wednesday evening that it has taken an equity stake in Nickel Asia Corp., the largest miner in the Philippines.
According to the data released by the Ministry of Finance today, overseas investors were net buyers of Japanese stocks to the tune of 274.1 billion yen during the week of August 9-15, marking the fifth straight week of capital inflow. Foreign investors bought 2.99 trillion yen in Japanese stocks and sold 2.71 trillion yen worth. The net figure was close to the previous week's 293.1 billion yen. Japanese investors were net sellers of foreign stocks for the second straight week, unloading a net 87.2 billion yen worth of shares.
The Korean market has bounced back sharply after a fall from higher levels. Despite a solid start, the Korean market briefly slipped into the red today as traders turned a bit cautious at higher levels. However, on spirited buying in bank, steel and energy stocks, the benchmark index KOSPI is currently trading up by 9.6 points or 0.62% at 1,555.6.
Among key bank stocks, Shinhan Financial and KB Financial are up by nearly 4% each. Woori Finance is trading higher by close to 3% while Korea Exchange Bank is up by about 2%.
Steel stocks Hyundai Steel and POSCO are trading higher by over 2.5%. Oil stocks SK Holdings and S-Oil are up with modest gains while KEPCO is down with a modest loss.
Among automobiles, Hyundai Motor is up with a sharp gain, Ssangyong Motor is trading modestly higher and Kia Motor is trading flat. In the technology space, Hynix Semiconductor and Samsung Electronics are trading flat, while LG Display LCD and LG Electronics are down with modest losses.
Shipbuilding stocks Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding are down by 1% - 3%, while bulk carrier STX Pan Ocean is down with a modest loss. Telecom stocks are trading flat. Airliners Korea Airlines and Asiana Airlines are down by 3.4% and 2.2% respectively.
Among other markets in the Asia-Pacific region, Shanghai has rebounded strongly after previous session's sharp decline. The benchmark index Shanghai Composite Average is up by over 2% now. Hong Kong, Indonesia and Singapore are also trading firm with notable gains. Taiwan and New Zealand are trading in the red with notable losses. Stock markets across the region had finished notably lower on Wednesday.
On Wall Street, stocks recovered from early weakness and finished notably higher on Wednesday, due largely to a jump in oil demand. Despite moving in a choppy fashion during the later part of the session, the major averages finished near their best levels of the day. The Dow closed up by 61.22 points or 0.7% at 9,279, the Nasdaq moved up by 13.32 points or 0.7% to 1,969 and the S&P 500 ended up by 6.79 points or 0.7% at 997.
Major European markets ended the day little changed, with the French CAC 40 index and the U.K.'s FTSE 100 index finishing just below the unchanged mark, while the German DAX index fell by 0.4%.
Crude oil soared to its best close in more than two months on Wednesday after an Energy Information Administration report showed that crude inventories unexpectedly fell sharply in the recent week. Light sweet crude for September settlement rallied to US$72.42 a barrel, up US$3.23 on the session. Prices reached as high as US$72.80 earlier in the day.
The EIA said crude oil inventories decreased by 8.4 million barrels, while analysts expected to see an increase of about 1.1 million barrels for the week. At 343.6 million barrels, however, crude oil inventories remain above the upper boundary of the average range for this time of year.
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