RTTNews - The stock market in Japan ended in positive territory on Wednesday despite weak global cues, on bargain hunting by traders after the stocks declined more than 3%. Optimistic view about the local economy in Bank of Japan's latest Monthly report also lifted sentiment.
In the U.S., stocks finished Tuesday's session firmly in the negative despite positive housing starts data. Weaker-than-expected producer price index and industrial production numbers, however, dampened the early euphoria and disappointing sales numbers from Best Buy and comments from President Barak Obama impacted the sentiment amid fresh concerns about global recovery.
A report released by the Commerce Department revealed that housing starts rose sharply by 17.2% during May to an annual rate of 532,000 units from the revised estimate of 454,000 units in April. Economists had expected starts to rise to 485,000 from the 458,000 originally reported for the previous month. While single-family starts showed a notable 7.5% rise in May, the jump in housing starts was due in large part to a 77.1% surge in buildings with five units or more.
In a separate report, the Labor Department revealed that producer prices rose 0.2% in May, following a 0.3% percent increase for April. Economists expected the prices to rise 0.6% during the month. Core producer prices, which leave out the impact of volatile food and energy prices, edged down by 0.1% for May. In April, the figure was up by 0.1 percent.
The Federal Reserve, in a separate report, revealed that industrial production fell by 1.1% in May following a revised 0.7% decrease in April. Economists had been expecting production to fall 1.0%. The report also showed that capacity utilization fell to 68.3% in May from a revised 69.0% in the previous month. The capacity utilization rate had been expected to slip to 68.4% from the 69.1% originally reported for April.
The Dow closed down by 107.46 points or 1.3% at 8,505, the Nasdaq closed down by 20.20 points or 1.1% at 1,796 and the S&P 500 closed down by 11.75 points or 1.3% at 912.
The Nikkei 225 Average opened at 9,706 compared to its previous close of 9,753. However, Bank of Japan's positive economic assessment and bargain hunting by investors after two days of losses helped the index move above the unchanged line and end in positive territory. The index finally closed at 9,841, representing a gain of 87.97 points or 0.90%. The broader Topix Index of all first section issues ended at 923, up 8.27 points or 0.90%.
After two days of declines, crude oil prices ended higher by 52 cents at $70.99 a barrel in Asian trading. Light sweet crude oil finished Tuesday's New York session at $70.47, down $0.15, amid volatile trading
In its latest monthly assessment of recent economic and financial condition, the Bank of Japan, raised its view on the broad economy as well as key sectors of the economy, including exports and industrial production.
Most stocks advanced as investors went on bargain hunting, picking up stocks at lower prices amid underlying optimism about a global recovery. Specifically, green technology related stocks led the gains after Nomura Holdings has started a new global fund exclusively for the sector that implements the environment-friendly technology.
Sanyo Electric Co., engaged in the manufacture of rechargeable batteries, soared 13.93%, and GB Yuasa Corp. gained 12.49%.
Among financial stocks, Mitsubishi UFJ edged up 0.50%, Mizuho Financial added 1.62% and Resona Holdings added 0.22%. Among brokerages, Nomura Holdings added 0.49%.
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