RTTNews - Bargain hunting helped Asian stocks recover on Friday following sharp losses in the previous session. Better-than-expected March machinery orders in Japan, strong cues from Wall Street overnight and renewed optimism about an early economic revival offered some support. However, the gains were modest as investors looked forward to a slew of economic data, including U.S. industrial output data and euro-zone gross domestic product data due out later in the day, as well as Japan GDP figures and U.S. housing data due next week.
Overnight, the major averages on Wall Street ended the session firmly in positive territory, as investors went bargain hunting following some recent weakness, shrugging off a report from the Labor Department showing a bigger than expected increase in first-time claims for unemployment benefits in the week ended May 9th. The Dow Jones Industrial Average closed up 0.56%, the Nasdaq Composite rose 1.5% and the S&P 500 index gained 1.04%.
The Labor Department said initial jobless claims rose to 637,000 from the previous week's revised figure of 605,000. Economists had been expecting jobless claims to edge up to 610,000 from the 601,000 originally reported for the previous month. A separate report released by the Labor Department showed that producer prices increased by a little more than expected in the month of April, partly due to a rebound in food prices.
The rebound on Wall Street overnight helped crude oil futures end higher on Thursday, but the gains were limited as a gloomy forecast for energy demand from Paris-based International Energy Agency weighed on sentiment. It said the rise in oil prices to a six-month high above $60 this week was due to sentiment rather than fundamentals. Crude oil settled at $58.62 a barrel in New York trading on Thursday and was largely unchanged in Asian trading on Friday.
The Japanese market rose sharply, boosted by a stable yen and better-than-expected machinery order data for March. The Nikkei 225 index closed near the day's high at 9,265, up 171 points or 1.88% and the broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 19 points or 2.22% to 882. Turnover was moderate at about 2.4 billion shares.
Financials closed stronger following gains among their U.S. peers overnight. In the banking sector, Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Resona Holdings closed higher by more than 4% each.
Mizuho Financial Group closed up 2.16%, shrugging off concerns about equity dilution. According to reports, Mizuho would sell new shares worth up to 600 billion yen to bolster its finances, as it reported a big net loss of 588.8 billion yen for the year to March
Insurer Mitsui Sumitomo Insurance rallied 4.42%, Sompo Japan Insurance jumped 5.37% and T&D Holdings soared 5.10%. Among brokerages, Nomura Holdings climbed 5.27% and Daiwa Securities Group surged up 6.06%.
Among technology stocks, Sony rallied 5.11% on forecasting a smaller-than-expected loss for the year ending March 2010. Advantest closed up 0.38%, Tokyo Electron surged up 7.84%, Fanuc rose 2.11%, Fujitsu edged up 0.41% and Canon soared 5.08%. Tokyo Electron expects its orders in April-June to improve by 30-50% from the previous quarter.
Shipping stock Nippon Yusen KK rose 2.16%, Kawasaki Kisen Kaisha surged up 6.79% and Mitsui O.S.K. Lines advanced 2.67% after the Baltic Dry Index, a measure of raw-material maritime shipping rates, jumped by 100 points to a new calendar- year high in London overnight.
Machinery maker Komatsu advanced 3.14% and its rival Hitachi Construction Machinery rose 1.29% following the release of the better-than-expected machinery data.
Core machinery orders in Japan were down 1.3 percent to 727.9 billion yen in March compared to the previous month, the Cabinet Office said on Friday, significantly better than forecasts for a 4.6 percent decline after the revised 0.6 percent gain in February and the 3.8 percent fall in January. On an annual basis, core machinery orders dropped 22.2 percent - but that was also better than forecasts for a 27.7 percent contraction after the 30.1 percent fall in the previous month.
The Australian market closed sharply higher, led by big miners and cyclical stocks. The benchmark S&P/ASX200 index closed at 3,773, up 50 points or 1.34% and the broader All Ordinaries index rose 48 points or 1.3% to 3,759.
Big-miner Rio Tinto surged up 7.43% on reiterating its commitment to a planned $19.5 billion tie-up with Chinese metals firm Chinalco. Its rival BHP Billiton also advanced 3.22%, but Iluka Resources ended down 1.85%
Retailer Woolworths said that it is acquiring a 25 percent stake in Western Australian-based brewer Gage Roads for about A$1.9 million. The stock closed up 1.45%. David Jones rose 1.37% and Wesfarmers, which owns Coles, closed up 1.54%, while Harvey Norman closed unchanged.
Mining contractor Macmahon Holdings plunged 11.25% after raising A$0.37 in a share placement to new and existing shareholders. Engineering firm WorleyParsons rallied 5.11% on reports that it has won a nuclear power plant consultancy contract worth 900 million Egyptian pounds.
Farm chemicals maker Nufarm was in a trading halt as it seeks to raise about $300 million through an institutional share placement.
Banking stocks closed mostly higher. Commonwealth Bank closed up 0.99%, National Australia Bank rose 1.37%, Westpac Banking added 1.24% and investment bank Macquarie Group gained 3.25%, but ANZ slipped 0.65%
Insurer AMP moved up 1.17% on saying that it expects tough market conditions to continue into 2010 and possibly even beyond. QBE Insurance advanced 2.79% and AXA Asia Pacific rallied 4.84%, but Henderson Group slipped 0.31%.
Housing developer Stockland plunged nearly 9% after announcing a share placement to retail investors. Construction company Leighton Holdings rose 1.24% after it cut its full-year profit guidance by 10 percent to A$430 million on write downs and tough conditions.
Oil & gas stocks closed stronger. Oil Search rose 0.79%, Santos rallied 4.82% and Woodside Petroleum closed up 0.79%. Media stock News Corp rose 1.95% and Fairfax Media gained 2.45%, but Consolidated Media fell 1.33% and Seven Network closed down 0.88%.
The South Korean market closed modestly higher on bargain hunting following a steep loss in the previous session. The benchmark KOSPI closed at 1,392, up 11 points or 0.78%. Volume was significant at 677.5 million shares worth 6.64 trillion won and gainers outnumbered losers by 474 to 341.
Banks led the gainers after correcting sharply in the previous session. Korea Exchange Bank moved up 1.57%, Woori Finance surged up 6.73% and KB Financial, the holding firm of Kookmin Bank rallied 4.24%.
Shipbuilder Hyundai Heavy Industries closed up 0.65% after creditors of Hyundai Corp. rejected a bid by Hyundai Heavy to buy the local trading company after the bidding price fell short of creditors' expectations. However, Samsung Heavy Industries slipped 0.69% and Daewoo Shipbuilding fell 3.21%.
Technology stocks closed mixed. LG Electronics moved up 1.84% and market heavyweight Samsung Electronics closed up 0.54%, but Hynix Semiconductor tumbled 3.97% and LG Display LCD slipped 0.84%. Automaker Kia Motors ended up 0.81% and Ssangyong Motor advanced 2.76%, but Hyundai Motor closed down 0.78%.
Among other notable stocks, Korean Air Line advanced 3.17%, Asiana Air Line added 3.15%, oil stock S-Oil rose 1%, energy stock KEPCO moved up 3.30% and telecom stock SK Telecom closed up 0.56%, while KT shed 0.94% and steel maker POSCO slipped 0.12%.
The New Zealand market closed modestly higher following a disappointing performance in the previous session. The NZX-50 index closed off the day's high at 2,791, up 15 points or 0.53%. Turnover was worth $98.87 million and gainers outnumbered losers by 41 to 36.
Among top stocks, Telecom rose 0.39%, Fletcher Building gained 1.07%, Steel & Tube added 1.69%, Sky City added 0.70%, Fisher & Paykel Appliances moved up 3.33% and Jeweler Michael Hill rallied 4.84%, while Nuplex closed unchanged.
Electricity company Contact Energy closed flat amid reports that it is delaying investment plans of a 220-megawatt plant at the Te Mihi geothermal steam field near Jonathan Hill due to inadequate demand and increased funding costs.
Retailer Hallenstein Glasson fell 3.47%, Pumpkin Patch declined 1.53% and Warehouse Group lost 1.60% on the back of worse-than-expected retail sales data. Energy stock TrustPower rose 0.53% after reporting an increase in annual profit and the payment of a special dividend. However, Vector closed down 0.47%.
Property company Kiwi Income Property Trust gained 1.08% despite reporting a net loss of NZ$169 million (including revaluation losses) for the 12 months to March due to a fall in the value of its investments. Goodman Property Trust added 1.22% after the company hinted at selling more properties due to the recession.
Diversified investment group Guinness Peat Group surged up 6.67% after showing NZ$825 million in cash in a simplified balance sheet as at May 4. New Zealand Oil & Gas ended down 2% even as the price of crude oil rose modestly on Thursday.
Among other notable stocks, Infratil moved up 1.80% and Tower rose 1.89%, but Rakon fell 3.85%, Auckland Airport slipped 0.59% and Mainfreight ended down 0.84%.
In economic news, retail sales volumes in New Zealand plunged by a record 2.9 percent for the March quarter, according to data released Friday by Statistics NZ. Core retail sales values, however, posted a modest advance. The statistics bureau said the volume decline was twice as large as the then-record decline of 1.4 percent seen in June 2008 and in March 1997.
Meanwhile, the benchmark for the Indian market, the Sensex was last trading near the day's high at 12,143, up 270 points or 2.28% over the previous close.
Among the other markets in the region, China's Shanghai Composite index closed up 0.20%, Hong Kong's Hang Seng index rose 1.51%, Singapore's STI Straits Times index edged up 0.83% and Taiwan's TWII Weighed index moved up 1.96%.
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