Weekly Roundup: Asian Stock Markets Advance On Buoyant US Data

  on October 19 2012 11:55 PM
A man is reflected on a stock quotation board showing Japanese companies' stock prices outside a brokerage in Tokyo
A man is reflected on a stock quotation board showing Japanese companies' stock prices outside a brokerage in Tokyo Dec. 1, 2011. REUTERS

Asian markets gained in the week with investor sentiment turning positive as a rise in the U.S. retail sales and industrial production indicated an improvement in the growth prospects of the world’s largest economy.

Japan's Nikkei 225 Stock Average climbed 5.5 percent and closed at 9002.68. South Korea's Kospi Index gained 0.6 percent and closed at 1943.84.

Market confidence went up after the U.S. Commerce Department's retail sales report Monday showed an upswing in the consumer confidence. The report, measuring the change in the total value of inflation-adjusted sales at the retail level, rose 1.1 percent in September, up from the 0.9 percent rise in August. Meanwhile, the core retail sales excluding autos grew 1.1 percent in September, compared to the 0.8 percent rise in August.

Investor confidence rose after the U.S. Federal Reserve’s Industrial Production and Capacity Utilization report Tuesday showed an upswing in the manufacturing output. The report, measuring the change in the total inflation-adjusted value of output produced by manufacturers, mines and utilities, rose 0.4 percent in September, up from the 1.2 percent fall in August.

Hong Kong's Hang Seng Index rose 2 percent and closed at 21551.76. China's Shanghai Composite Index climbed 1.1 percent and closed at 2128.30.

The rate of inflation in China slowed down in September from the previous month, showing signs of a gradual decline in the price pressure to make room for monetary easing.

The data from the National Bureau of Statistics released Monday showed that the consumer price index of China rose 1.9 percent in September from a year earlier, down from 2 percent in August. The diminishing inflation should be good news because it can help the government invigorate growth without much concern about the rising prices.

China's gross domestic product growth slowed to the lowest rate in three years to 7.4 percent in the third quarter compared to the same period last year due to the soft global demand and reduced real estate investment in the country, the official data released Thursday show.

Despite the slowdown, the numbers from China's National Bureau of Statistics could be far from the hard landing of the economy that many investors have feared. Investors expect that with Chinese authorities still loosening the monetary policy, the current data may represent the trough of a cycle.

The data released by the National Bureau of Statistics of China showed that the country’s industrial production rose to 9.2 percent in September, up from 8.9 percent in August and also more than the analysts’ expectation of 9 percent.

India's BSE Sensex marginally rose 0.04 percent and closed at 18682.31.

India’s headline inflation in September rose to 7.8 percent, up from the 7.55 percent increase recorded in August, according to the data released by the Ministry of Commerce & Industry. With the government cutting he fuel subsidies in September, the Wholesale Price Index rose to its highest since November 2011.

Investor sentiment was reinforced after German Chancellor Angela Merkel said that Germany wanted Greece to stay in the euro zone. Merkel added that the work was not finished and there was a whole lot to do in the coming weeks.

On Friday, investor sentiment turned negative as the quarterly results reported by Google and Microsoft missed the analysts’ expectation, deepening the fear that the sluggish global economic growth would affect the corporate earnings.

Market confidence was weighed down after Google reported Thursday that the company’s third quarter profit fell compared to the same period last year as its Motorola business continued to incur operating loss.

Investor confidence was further afflicted as Microsoft reported Thursday that the company’s first quarter profit declined 22 percent compared to the same period last year as its personal computer business was affected by the soft market demand.

Major gainers: Shares of Li & Fung gained 8.5 percent. Shares of Toyota Motor Corp rose 7 percent and those of China Overseas Land & Investment Ltd advanced 4.6 percent.

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