RTTNews - The markets across the Asia-Pacific region that were opened today ended in positive territory, led by resource stocks on higher commodity prices. A positive closing on Wall Street on easing concerns about rising bond yields, higher oil prices, and surprisingly strong industrial output data from Japan helped the markets advance as hopes of recovery resurfaced yet again.
In the U.S., easing concerns about rising bond yields, the $26.0 billion seven-year note auction conducted by the Treasury Department in the U.S. attracted a high-yield of 3.30% while seeing modestly strong demand, with the bid-to-cover ratio coming in at 2.26. A report from the Commerce Department showed that orders for durable goods jumped 1.9% in April following a downwardly revised 2.1% decrease in March. Another report from the Commerce Department revealed that new homes sales edged up 0.3% to an annual rate of 352,000 in April from a downwardly revised 351,000 in March.
A separate report from the Labor Department showed that initial jobless claims in the week ended May 23rd came in at 623,000. This was down 13,000 from a revised mark of 636,000 in the previous week. However, continuing claims, which measure the number of people receiving ongoing unemployment help, climbed 110,000 to 6.788 million.
The Dow closed up 103.78 points or 1.3% at 8,404, the Nasdaq closed up 20.71 points or 1.2% at 1,752 and the S&P 500 closed up 13.77 points or 1.5% at 907.
The Nikkei 225 Average opened higher at 9,472 compared to its previous close at 9,451, mirroring the gains on Wall Street. However, weak economic data related to consumer prices raised fears that the country might move into deflation. After moving near the unchanged line amid volatile trading in the forenoon session, the index advanced following the release of better-than-expected industrial output data, raising hopes that export revival might help the country come out of recession.
Rising commodity prices also supported the upside, with the index finally ending at the day's high of 9,522, representing a gain of 71.11 points, or 0.75%. The broader Topix Index of all first section issues edged up 2.32 points, or 0.26%, to close at 898.
On the economic front, the Ministry of Finance revealed that joblessness in Japan rose to a five year high of 5.0% in April. Month-over-month, the rate increased 0.2% from March, the report noted. In a separate report, the Ministry stated that household spending declined 1.3% in April, the 14th consecutive monthly fall. In a separate report, the Ministry of Economy, Trade and Industry stated that Industrial output in the country rose by a record 5.2% in April, led by a 15.2% hike in production of electronic parts and devices as well as a 13.8% rise in production of chemicals.
Oil stocks advanced on higher oil prices. Crude oil prices ended 21 cents higher at $65.29 in Asian trading. Light crude oil price for July delivery closed at $65.08 in New York Mercantile Exchange, following an unexpected drop in weekly inventory data in the U.S. and a decision by OPEC not to tinker with output rates.
Inpex, the leading oil exporter in the country, soared 6.34%, Showa Shell advanced 3.97% and Nippon Oil added 0.35%.
The shares of Kumiai Chemical Industry surged more than 22% after brokerage Nomura Securities upgraded the credit rating of the company by one notch to 3 out of 3.
Shipping stocks advanced following a sharp rise in sea cargo rates. Kawasaki Kishen gained 6.42%, Mitsui OSK Lines advanced 5.42% and Nippon Yusen rose 5.31%.
On the other hand, financial stocks ended weaker. Mitsuibishi UFJ shed 4.12%, Mizuho Financial lost 1.30%, Resona Holdings edged down 0.35% and Sumitomo Mitsui declined 1.34%.
Retail stocks ended mixed after the release of a weaker household spending report. Seven & I Holdings slipped 1.71%, and J Front Retailing lost 0.76%. Fast Retailing, however, bucked the trend and advanced 2.92%.
After opening unchanged from its previous close at 3,754, Australia's All Ordinaries Index surged sharply higher to 3,780 in initial trading, led by banks. The index continued its northward march following the release of better-than-expected industrial production data from Japan before closing at 3813, with a gain of 59.40 points, or 1.58%. The benchmark S&P/ASX 200 Index followed a similar trend and ended up at 3,818, with a gain of 62 points, or 1.65%.
On the economic front, the Reserve Bank of Australia revealed that credit issued to private borrowers in the country increased a seasonally adjusted 0.1% in April month-over-month. Year-over-year, private sector credit rose 4.6% in April, the bank noted.
Commodity stocks led the market advance. A measure of six commodities traded in London Metals Exchange rose 1.3% on Thursday. Among the commodities, copper prices advanced 1.8%, while nickel and zinc added 0.8% and 1%, respectively.
Resource stocks advanced on higher metal prices. BHP Billiton rose 1.88%, Iluka Resources added 1.60%, Orica gained 1.41%, Oz Minerals surged 4.17% and Rio Tinto edged up 0.86%.
Woodside Petroleum added 0.84%, Santos advanced 1.46% and Oil Search gained 2.06%.
Banking stocks advanced as concerns about high yields eased. ANZ Bank gained 3.38%, Commonwealth Bank advanced 3.51%, National Australia Bank rose 1.81% and Westpac Banking increased 2.23%. Macquarie Group surged 3.63% after stating that it is planning to acquire an energy advisory firm based in Canada for about US$132 million in cash and stock transaction to boost its operations in the energy sector.
Gold stocks also moved higher, helped by higher bullion prices. Lihir Gold advanced 1.55%, New crest Mining added 1.85% and Sino Gold rose 2.19%.
In Hong Kong, the Hang Seng Index ended in positive territory led by property and resource stocks.
The market opened higher at 18,028 compared to its previous close at 17,885, and after a brief retreat below the unchanged line on short covering, reversed back above the unchanged line and continued to move northward to the day's high of 18,271. Profit taking late in the session trimmed some of the gains, with the index ending at 18,171, up 286 points, or 2.60%.
PetroChina advanced 2.07% and CNOOC, the largest offshore oil company in China, gained 4.19%.
Among financial stocks, Hang Seng Bank gained 6.94% and Bank of Communications added 1.13%. Bank of China advanced 7.74% on huge volumes after Deutsche Bank AG, in a note to investors, advised to buy Bank of China on expectations that the bank's entry into international yuan settlement business will increase the earnings potential. BOC Hong Kong soared more than 10%. All other major financials, except HSBC Holdings, ended in positive territory. HSBC Holdings ended weaker by 0.36%.
Among china-related stocks, China Mercantile Holdings advanced 7.69%, China Resources added 1.19% and China Shenhua gained 1.38%.
In South Korea, the benchmark KOSPI Index ended in positive territory amid volatile trading, as foreign institutional investors picked up select stocks. Resource, steel and automotive stocks posted gains.
After opening slightly higher at 1,393 compared to its previous close at 1,392, the market traded in a narrow range on geopolitical concerns. Foreign investor appetite for stocks and reduced selling by institutional investors helped the index end above the unchanged line at 1,396, up 3.72 points, or 0.27%.
Automotive stocks advanced on hopes of gaining more market share should GM file for bankruptcy. Hyundai Motor gained 2.21% and Ssangyong Motor added 1.33%. KiaMotor, however, lost 2.05%.
Steel stocks ended mixed. While POSCO, the numero uno steel manufacturer in the country, advanced 3.45%, Hyundai Steel shed 2.60%
The markets in China and Taiwan are closed for public holidays.
In India, the stock market ended in positive territory following better than expected GDP numbers for the fourth quarter and fiscal year 2008-09. Buying interest in heavily weighted stocks at the start of a new derivative series and continued surge in mid cap and small cap stocks imparted buoyancy to the markets.
The BSE Sensex closed at 14,625, up 329.34 points, while the Nifty gained 111.85 points, to close at 4,449.
Among the other major markets open for trading in the region, Indonesia's Jakarta Composite Index gained 13.95 points or 0.73% to close at 1,917, while the Strait Times Index in Singapore added 36.11 points, or 1.57% to close at 2,329.
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