RTTNews - After trading choppily in early trading, the Asian markets, with the exception of New Zealand, closed higher for a second day on Tuesday amid optimism about a global economic recovery. An upward revision to the Asian economic growth forecast for the year by Goldman Sachs and relief that Chinese economic recovery was on track also helped lift market sentiment.
Crude oil prices hovered below $71 a barrel Tuesday in Asia amid caution ahead of a U.S. central bank meeting, beginning Tuesday. Traders also awaited U.S. oil inventory data from the American Petroleum Institute and Energy Administration Administration.
The Japanese market closed higher at a new 10- month high on optimism about a global economic recovery. The benchmark Nikkei 225 index closed at 10,585, up 61 points or 0.58% and the broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 4 points or 0.44% to 974.
Insurer Mitsui Sumitomo Insurance rose 1.95% on robust first-quarter earnings, Sompo Japan Insurance surged up 5.25% and T&D Holdings advanced 3.91%. Aioi Insurance rose 4.2% after its net income more than quadrupled for the June quarter.
However, automaker Honda Motor fell 1.25%, Suzuki eased 0.43%, Toyota edged down 0.48% and Mazda ended down 0.76% after the yen strengthened against the U.S. dollar.
Constructions stocks rose in anticipation of reconstruction demand after a strong earthquake of magnitude -6.5 struck off the coast south-west of Tokyo on Tuesday morning, injuring 82 people, damaging buildings and a four-lane expressway.
On the economic front, the Bank of Japan retained its key interest rate as expected and also maintained its cautious assessment about the economy. The Policy Board of the BoJ unanimously decided to retain the uncollateralized overnight call rate at 0.1%. The last change in rate was a 0.10% cut in interest rates in the December 2008 meeting.
After some shaky moves in early trading, the Australian market closed higher near its recent high, as improving optimism about the domestic economy and a strong performance by heavyweight banks more than offset weakness in major resources stocks.
Survey results released by National Australia Bank showed that Australian business confidence index rose 6 points to 10 and the business conditions index rose 3 points to 1 in July, suggesting that the economic recovery is gathering momentum. The benchmark S&P/ASX 200 closed at 4,332, up 28 points or 0.65% and the All Ordinaries index rose 0.58% to 4,334.
Miner BHP Billiton edged down 0.42%, while Commonwealth Bank of Australia rose 0.21% ahead of its full year earnings announcements on Wednesday. Rio Tinto ended down 1.11%, but Iluka Resources advanced 3.24%.
National Australia Bank, ANZ and investment bank Macquarie Group rallied over 2% each and Westpac Banking added 1.59%. Coal stocks such as Felix and MacArthur Coal advanced amid reports that China's Yanzhou had made a takeover bid for Felix Resources.
Among energy stocks, Woodside Petroleum and Origin Energy closed firm, while Santos and Oil Search exhibited weakness. Qantas Airways jumped 4.17% after Flight Centre agreed on reasonable commercial terms to retain its partnership with Qantas in fiscal 2010. Gold miners ended mixed after the precious metal lost one per cent overnight.
The South Korean market ended firm, as foreign funds continued their buying spree and the central bank left its key policy rate steady at 2.0%. However, the gains were modest as traders expressed caution ahead of the U.S. Federal Reserve's rate-setting meeting, beginning Tuesday. After trading in a narrow range, the benchmark KOSPI rose 3 points or 0.2% to 1,579, with gainers outnumbering losers by 455 to 334.
Exporters L G Electronics and Hundai Motor advanced , while airline stocks declined after the Korean won fell sharply against the U.S. dollar. Banking stocks fell mostly on profit taking. Ssangyong Motor hit the 15% upper circuit limit for the fourth day in a row after the creditors of the company withdrew a liquidation petition.
The New Zealand market ended lower on concerns about stretched valuations after rising 18% in the last four months. The benchmark NZX fell 25 points or 0.8% to 3,055 and losers outnumbered gainers by 24 to 15, while 11 stocks closed unchanged.
Contact Energy fell 2.31% ahead of the announcement of its earnings on Friday and Fletcher Building ended down 2.23%. Retailer Hallenstein Glasson rose 2.52%, Michael Hill International gained 2.94% and the Warehouse Group advanced 1%, but Pumpkin Patch ended down 0.56% after recent data suggested that a modest recovery in retail spending is now underway.
Fisher & Paykel Healthcare fell 2.38% after the kiwi dollar strengthened against the U.S. dollar. Among other notable stocks, Infratel ended up 1.09%, Nuplex Industries advanced 2.42%, Freightways added 2.13% and Vector rose 0.48%, while TrustPower eased 0.13%
Hong Kong's Hang Seng index rose 145 points or 0.69% to a 12- month high of 21,074 on return of risk appetite after data from China met market expectations.
China's Shanghai Composite index, which tracks both A and B shares, closed at 3,265, up 15 points or 0.46%, shrugging off the lower-than-expected July's lending and industrial output data. Bottom fishing following a 6% recent loss and expectations that the People's Bank of China would maintain its moderately loose monetary policy over the weekend offered support.
Data released by the National Bureau of Statistics said industrial output climbed 10.8% year-over-year in July, faster than the 10.7% growth in June, but lower than economists' expectations for a 11.7% rise. For the first seven months of the year, industrial output climbed 7.5% year-over-year, down 8.6 percentage points from the same period last year, but up 0.5 percentage points from the first six months
On Wall Street, stocks posted modest losses on Monday, as traders cashed in on recent gains ahead of some key economic reports on tap for this week, including data on retail sales, industrial production and weekly jobless claims. Further, the Federal Open Market Committee will make its interest rate announcement on Wednesday, with the key fed funds rate expected to remain unchanged amid a challenging economic environment. The Dow Jones Industrial Average eased 0.34%, the Nasdaq Composite slipped 0.4% and the S&P 500 index drifted down 0.33%.
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