RTTNews - Stock prices moved up sharply in early trading in the Japanese stock market on Tuesday with investors taking positions on strong cues from Wall Street.
The benchmark Japanese index Nikkei, is currently trading at 9,777, up 99.19 points over its previous close.
With hopes of a global economic revival rising further on the back of some better-than-expected economic data from the U.S. and some leading Asian countries including China, Japan and India, markets across the Asia-Pacific region are trading firm today.
Iron & steel, mining and trading stocks were among the prominent gainers in early trading today. On the other hand, gas and electricity stocks declined.
Automobile stocks are trading mostly firm, with Toyota Motor and Honda Motor posting sharp gains. Non-ferrous metals and machinery stocks are up with notable gains.
Construction, textiles, telecommunications, real estate, insurance and chemicals stocks are also trading firm. Pharma stocks are exhibiting a mixed trend. Foods trade weak.
Supply in the Japanese economy outstripped demand by 8.5% in the three months ended March 31, according to Cabinet Office figures revealed Monday.
The supply-demand gap reflects the difference between actual gross domestic product and the theoretical supply from labor and factories working at average capacity. Real GDP in the January-March quarter contracted at an annualized rate of 15.2%, the steepest decline since the end of World War II. Exports plunged, and capital investments and consumer spending retrenched.
The gap, equivalent to an annual demand shortfall of about 45 trillion yen, was the worst since 1980, when records began to be kept. Supply had topped demand by 4.5% in the October-December quarter, with the previous largest gap of 5% marked in January-March 1999.
Suzuki Motor Corp. said Tuesday it is owed 71.6 billion yen by General Motors Corp., which filed for chapter 11 bankruptcy protection Monday. Of that amount, 29.4 billion yen may be uncollectible or late in being repaid.
According to the statement from the company, it holds 29.4 billion yen in accounts receivable from CAMI Automotive Inc., a GM Canadian joint venture and GM Espana, as well as loans extended to GM affiliates. Of that amount, 22.8 billion yen is collateralized. In addition to those debts, Suzuki has supplied 4.1 billion yen in capital to the Canadian venture as well as extended the firm credit totaling 38.1 billion yen. Suzuki has no credit obligations to GM or its U.S. affiliates. Suzuki Motor fell after a positive start today and is currently trading with a modest gain.
Tracking overnight rally in crude oil prices on the New York Mercantile Exchange, shares of crude oil-related firms moved higher in the Japanese market. Inpex Corp. rose sharply at the start and is trading firm with a 2% gain now despite having come off its high. Japan Petroleum Exploration, which also edged higher earlier this morning, has slipped into the red and is down with a modest loss at present.
The U.S. dollar traded in the lower 96 yen range early Tuesday in Tokyo, down slightly from its levels overnight in New York. Currently, the Yen is trading at 96.27 to the U.S. dollar.
Other markets in the Asia-Pacific region are also trading firm today. The Australian benchmark indices S&P/ASX 200 and All Ordinaries are up by about 1.5%. The Strait Times of the Singapore market is up by over 1%. South Korea's KOSPI and Taiwan's index Taiwan Weighted Average are trading higher by 1.21% and 1.53% respectively. The Shanghai Composite Average is up by a modest 0.68%.
General Motors filed for bankruptcy but the impact of the auto giant's fall from grace did not cast a shadow on Wall Street on Monday as investors rode on promising economic figures and stayed tuned to the market.
The Dow closed up 221.11 points or 2.6 percent, at 8,721, the Nasdaq finished up by 54.35 points or 3.1 percent, at 1,829, and the S&P 500 rose 23.73 points or 2.6 percent to 943.
The stock markets across the Asia-Pacific region soared on Monday. Japan's benchmark Nikkei 225 Index rose by 1.6 percent, while China's Hang Seng climbed 3.4 percent.
Major European markets also closed considerably higher. The French CAC 40 Index and the German DAX Index finished up by 3.1 percent and 4.1 percent, respectively, while the U.K.'s FTSE 100 Index also enjoyed notable strength, closing up by 2.0 percent.
Fuelled by expectations of increased demand, crude oil prices hit a seven-month high above $68 a barrel and appear poised to test higher levels.
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