RTTNews - Shrugging off some early weakness, most of the markets in the Asia-Pacific region have edged higher on Thursday with participants going in for bargain hunting after previous session's setback. While a stronger yen and some weak economic reports from the U.S. contributed to the early decline in the region, heavy buying in mining stocks following gold's solid surge buoyed up sentiment to an extent as the day progressed.
In the Australian market, mining stocks are trading firm. Consumer discretionary, healthcare and technology stocks are also exhibiting some strength. Financials have edged higher after a weak start. Energy stocks are trading mixed.
The Australian benchmark index S&P/ASX 200, which had drifted down to 4,410 earlier in the day, is currently trading at 4,445, up 6.8 points, or 0.1%, over its previous close. The broader All Ordinaries index is up by 8.7 points, or 0.2%, at 4,445.
Australia's biggest lender, Commonwealth Bank of Australia, has launched a four-year, Australian dollar denominated non-government guaranteed bond. The bank expects to price the bonds on September 3 at a yield of 89 basis points above the three-month bank bill swap rate, which will be paid on a quarterly basis, Sydney-based CBA said in a statement today. After initial weakness, the Commonwealth Bank of Australia stock has recovered a bit and is currently down with a modest loss.
Among other bank stocks, ANZ Bank is up by about 1.5%, Westpac Banking Corporation is trading modestly higher and National Australia Bank is down with a modest loss. Diversified financials stock Macquarie Group is up by about 0.3%.
Key materials stocks BHP Billiton and Rio Tinto are trading lower by 0.4% and 0.7%. respectively. Bluescope Steel and Fortescue Metals are also trading weak. Among other stocks in the materials space, Newcrest Mining is up by as much as 7% and Lihir Gold is gaining about 6.5%. Incitec Pivot and Orica are also trading with notable gains.
In the energy space, Woodside Petroleum, Santos and Origin Energy are trading weak, while Oil Search is trading modestly higher.
Virgin Blue Holdings Ltd has raised A$98.3 million through the retail component of a new share sale, allowing the discount carrier to survive the downturn and look for expansion opportunities. The fully underwritten retail offer had experienced overwhelming demand, meaning the airline would scale back applications made by shareholders in excess of their entitlements, Brisbane-based Virgin Blue said in a statement on Thursday. Virgin Blue said it had raised a total of $231.4 million from retail and institutional shareholders by selling 1.16 billion new shares. The newly issued shares will open for trading next Wednesday.
In economic news, figures released by the Australian Bureau of Statistics showed the Australian balance of goods and services was a deficit of A$1.556 billion in July, seasonally adjusted, from a downwardly revised deficit of A$538 million in June. During the month, exports were down 1% in adjusted terms, while imports were up 4%. Economists were expecting a deficit of A$880 million in July.
In another news, a survey from the Australian Industry Group and Commonwealth Bank says the pace of contraction in the services sector slowed in August as firms benefited from a more optimistic view of the economy. The Australian Industry Group-Commonwealth Bank performance of services index (PSI) rose 3.9 index points in August to 48.0, edging closer to the key 50 level that separates expansion from contraction.
In the currency market, the Australian dollar opened flat this morning after strong domestic economic growth figures published on Wednesday supported the currency during the offshore trading session, which featured weak US economic data and a pullback by equity markets. The Australian dollar is currently trading at 0.8357 to the U.S. dollar.
In Tokyo, the Nikkei declined by nearly 100 points to 10,185 in early trading today on negative cues from Wall Street and a stronger yen. However, with a few frontline stocks finding support at lower levels, the Nikkei cut down losses to an extent and ended the morning session at 10,238, down 41 points, or, 0.41% from Wednesday's close.
In early trading this morning, insurance, real estate and securities stocks tumbled, while select non-ferrous metal, technology and communications stocks edged higher.
Automobile and bank stocks were mostly down in negative territory. Machinery and electric machinery stocks also traded weak. Communications stocks edged higher, while chemicals stocks exhibited a mixed trend.
Earth Chemical Co. shares rose sharply, briefly climbing 13.2% to 3,000 yen to surpass the previous year-to-date high set on January 27. The maker of home-use insecticides attracted heavy buying in response to its announcement the previous day that it will procure high-quality masks from a U.S. company and sell them under its own brand. The move is likely to bolster the firm, as domestic demand for masks is surging amid growing fears over the new flu. The stock was up by about 12% at the end of the morning session.
Fast Retailing rebounded and climbed nearly 5% this morning following an announcement from the company that its Uniqlo unit saw same-store sales increase 5.6% on the year in August, a turnaround from the 4.2% decline logged in July.
Shares of Omron Corp. declined on profit taking by overseas investors. The stock has been struggling over the past few sessions amid worsened overall market sentiment.
In the currency market, the U.S. dollar traded in the lower 92-yen zone early this morning. In early trading, the dollar fetched 92.22-23 yen against Wednesday's close of 92.17-27 yen in New York and 92.65-66 yen in Tokyo. The yen is currently trading at 92.27 to the U.S. dollar.
Bank and steel stocks are stealing the spotlight in the Korean market. The KOSPI, which had slipped in early trading today, has edged higher subsequently and is currently trading at 1,617, up nearly 4 points or 0.23%, over its previous close.
Among key bank stocks, Woori Finance is gaining over 6%, Korea Exchange Bank and KB Financial are trading higher by about 4.5% each, while Shinhan Financial is up by around 3.5%.
Steel stocks Hyundai Steel and POSCO are trading with sharp gains. Telecom stocks SK Telecom and KT Corp. are also trading with notable gains.
In the technology space, Hynix Semiconductor and Samsung Electronics are trading modestly lower, while LG Electronics is down by about 2.3%. However, LG Display LCD is bucking the trend and gaining 0.3%.
Automobile stocks Kia Motor and Hyundai Motor are declining by 2.4% and 4%, respectively. Ssangyong Motors is down by as much as 6%. Oil stocks SK Holdings and S-Oil are exhibiting some weakness. KEPCO is trading up by about 1%. Shipbuilders are trading mixed. Airliners are trading modestly higher. Telecom stocks SK Telecom and KT Corp are also trading firm.
Among other markets in the Asia-Pacific region, Shanghai is gaining significant ground today with its benchmark index moving up by 2.2%. Indonesia, Hong Kong, Taiwan, Singapore and New Zealand are also trading with notable gains. Stock markets across the region had closed mostly lower on Wednesday.
On Wall Street, a late session sell-off resulted in a lower close for stocks on Wednesday. The Federal Reserve released the minutes of its August meeting, indicating that the members of the Federal Open Market Committee are more confident that the economic downturn is ending and that growth is likely to resume in the second half of the year. According to a release from the Commerce Department, factory orders increased by less than economists had been expecting in July.
The Dow closed down 29.93 points, or 0.3%, at 9,281, the Nasdaq fell by 1.82 points, or 0.1%, to 1,967 and the S&P 500 declined by 3.29 points, or 0.3% to close at 995.
Major European markets posted modest losses, with the French CAC 40 index and the German DAX index falling by 0.3% and 0.1%, respectively, while the U.K.'s FTSE 100 slipped by less than a tenth of a percent.
Crude oil prices finished unchanged on Wednesday after posting sharp declines in the last two sessions. Investors mulled over an Energy Information Administration report that revealed inventories fell last week, but not as much as expected. Light sweet crude oil for October delivery finished at US$68.05 per barrel for a second straight session.
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