The Japanese stock market opened on a rousing note on Thursday with strong cues from Wall Street setting up a strong platform for the bulls to go on a rampage in early trading. The market, which remained closed for three days for national holidays, got off to a buoyant start with leading bank stocks vaulting higher following a good show by U.S. bank stocks which jumped sharply on Wednesday on hopes the health of U.S. financial systems may not be as bad as was earlier feared.
The benchmark index Nikkei 225 rose to 9,374, a 6-month high, and is currently trading at 9,373, up 395.93 points or 4.41% from its previous close.
Bank stocks Resona Holdings Inc., Fukuoka Financial Group, Shensei Bank and Mizuho Trust & Banking Co. are trading firm with sharp gains.
Construction stocks are trading firm. with JGC Corp., Sekisui House, Comsys Holdings and Taisei Corp. posting strong gains.
Steel, Shipbuilding and automotive shares are trading firm. Among automotives, Nissan Motor, Fuji Heavy Industries, Isuzu Motors, Mazda Motor, Hino Motors and Mitsubishi Motors Corp. are up with sharp gains.
Transport, electric power, communications and services stocks are also trading firm.
In the currency market, the Yen is trading at 98.63 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Australia, Singapore and Korea are trading firm with strong gains. The Australian benchmark index S&P/ASX 200 is up 85.3 points at 3952. The All Ordinaries index is up 83.40 points or 2.17%.
The stock markets across the Asia-Pacific region had closed mostly higher on Wednesday, although the Japanese market remained closed for the third straight day. Hong Kong's Hang Seng Index jumped 2.5 percent.
The European markets also moved higher, benefiting from the U.S. employment data. The U.K.'s FTSE 100 Index rose 1.4 percent, while the French CAC 40 Index and the German DAX Index advanced 1.8 percent and 0.6 percent, respectively.
Wall Street had a pretty good session on Wednesday despite some profit taking during the course of the day. Market sentiment was fairly upbeat thanks to better-than-expected economic data. Market also reacted positively to reports suggesting that several of the financial companies examined by the government don't need additional capital.
According to the latest ADP Employment Report, 491,000 jobs were cut from private payrolls in April, but it turned out to be better than the 645,000 job cuts economists were expecting. And, the figure is substantially down from the 708,000 job losses recorded for March. While the data points to continued weakness in the labor market, it presents another sign that the economy is stabilizing and generated some optimism about the Labor Department's monthly employment report due to be released on Friday.
In an interview with RTT News, Peter Cardillo, chief market economist at Avalon Partners, said that the ADP employment data signals that the Labor Department's monthly employment report will probably show a decrease of less than 500,000 jobs.
According to media reports, the government stress tests of the nation's leading financial firms have determined that JP Morgan, Goldman Sachs, American Express and Bank of New York Mellon will not need additional capital. At the same time, reports have suggested that Bank of America, Citigroup and Wells Fargo will be asked to raise additional capital.
While the official results are not due to be released until after the close of trading on Thursday, the leaks generated some optimism about the outlook for the financial sector.
With the economy showing signs of a speedy recovery, investors are turning to stocks once again. Recent data shows that sequential inflow of funds into mutual fund assets on a percentage basis was the biggest in absolute terms in almost a year.
While the Nasdaq underperformed the Dow and the S&P 500 by a wide margin, the major averages all closed firmly positive. The Dow closed up 101.63 points or 1.2 percent at 8,512.28, the Nasdaq closed up 4.98 points or 0.3 percent at 1,759.10 and the S&P 500 closed up 15.73 points or 1.7 percent at 919.53.
Crude oil prices advanced 4.6% to settle at a five-month closing high of $56.34 per barrel.
While some traders are likely to stay on the sidelines Thursday ahead of the release of the results of the government's stress tests, trading could be impacted by the release of Labor Department reports on weekly jobless claims and first-quarter labor productivity and costs.
Traders will also be digesting the quarterly results from Cisco, News Corp. and Prudential after the close of trading Wednesday. Additionally, General Motors is due to release its quarterly results before the start of trading on Thursday.
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