Asian shares made modest gains yesterday Friday July 13 after China said its economy slowed in line with expectations, quashing fears data would show a “doomsday” scenario of the country heading for a hard landing.
The economy expanded 7.6 per cent in the second quarter of this year, the slowest pace for more than three years, but investors were relieved the figure was not worse.
“Chinese GDP data came in broadly in line with official consensus numbers, but well ahead of the feared doomsday whisper numbers that had been circulating of something sub-7.0 per cent,” said Cameron Peacock at IG Markets in Australia.
Shares in Tokyo closed mixed. The Nikkei 225 Index rose 0.05 per cent, or 4.11 points, to 8,724.12, but the broader Topix index of first-section shares fell 0.15 per cent, or 1.15 points, to 746.34.
“Doubts about the general strength of equities markets still linger, while the yen remains stubbornly strong,” said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.
In Shanghai, shares closed flat, little affected by the widely expected growth figure. The benchmark composite index edged up 0.02 pe rcent, or 0.41 points, at 2,185.90, but it fell 1.69 per cent over the week.
Seoul jumped 1.54 per cent, or 27.50 points, to finish at 1,812.89, while Sydney finished 0.35 per cent, or 14.2 points, higher at 4,082.2.
HONG KONG: STOCKS closed higher yesterday, clawing back heavy losses from a bad week after news China’s economic growth did not slow as much as feared in the second quarter.
The benchmark Hang Seng Index rose 0.35 per cent, or 67.52 points, to 19,092.63, but it still finished down 3.57 per cent for the week.
“The fact the numbers are not as bad as people had feared gives the market a boost,” Francis Lun, managing director at Lyncean Securities here, told Dow Jones Newswires.
SINGAPORE: SOUTHEAST Asian stock markets rose yesterday amid optimism over China’s second-quarter gross domestic product data, with stronger oil prices lifting commodities and energy-linked counters.
In Singapore, the benchmark Straits Times Index ended up 0.8 per cent, or 23.52 points, at 2,995.56, edging up 0.6 per cent on the week, its fifth consecutive week of gain.
Among the actives, Fraser and Neave gained 5.27 per cent to S$7.79 and Singapore Telecommunications rose 2.97 per cent to S$3.47.
KUALA LUMPUR: SHARE prices on Bursa Malaysia ended slightly higher yesterday after see-saw trading throughout the day, lifted by gains in select heavyweight counters, dealers said.
At the close, the benchmark FTSE Bursa Malaysia KLCI showed a gain of 0.89 point to 1,626.38, after trading between 1,621.37 and 1,628.09.
Dealers said regional market sentiment improved after China’s second-quarter growth report met market expectations. The Chinese economy grew 7.6 per cent in the April-June quarter from a year earlier, its slowest pace in three years.
On the home front, the market showed some continued sell-off in plantation counters with KL Kepong, Tradewinds Plantation and BLD Plantations among the top losers.
In other markets:
* Taipei fell 0.37 per cent, or 26.66 points, to 7,104.27.
* Manila closed 0.18 per cent, or 9.33 points, higher at 5,214.52.
* Jakarta closed 0.89 per cent, or 35.55 points, higher at 4,019.67.
* Bangkok added 1.44 per cent, or 17.16 points, to 1,210.29.
* Mumbai slid 0.11 per cent or 18.85 points to 17,213.7 in cautious trade.
VIETNAM: Vietnamese shares extended gain today as local investors bought hunted bargain after recent deep falls and ahead of Q2 earnings.
The benchmark VN Index added 8.26 points or 2.02% to 416.98. Volume rose 28% to 55.7 million shares worth of VND763.7 billion. Put through trading contributed 3.7 million shares worth of VND122.7 billion.
The market breadth was positive on the primary bourse where 220 stocks advanced, 50 declined, 37 closed unchanged.
The VN30 added 9.24 points or 1.91%, to 492.36. Amongst its 30 members, 27 gained, 2 lost and 1 unchanged.
On the Hanoi Stock Exchange, the HNX gained 1.25 points or 1.8% to 70.57. Trading volume rose 65.3% to 57 million shares worth VND493.1 billion.
HNX30 gained 3.61 points or 2.76% to 134.53.
EUROPE: European shares yesterday took back the previous day’s losses as China growth data proved better than had been feared although the overall mood among investors remained cautious as the second quarter earnings season crept into focus.
“It looks like most had positioned themselves for worse, so … it is a positive,” one trader said, referring to the 7.6 per cent growth reported by China.
The FTSEurofirst 300 rose 6.62 points or 0.7 per cent to 1035.44 by 1035 GMT, having shed 1 per cent on Thursday.
Near mid-day, London’s FTSE 100 index gained 0.67 per cent to 5,645.65, Frankfurt’s DAX 30 index added 0.88 per cent to 6,475.72 and Paris’ CAC 40 won 0.50 per cent to 3,150.79.
Rome’s FTSE MIB stood down 0.18 per cent at 13,559.63 but Madrid’s IBEX 35 index added 0.04 per cent to 6,632.80.
AMERICA: Stronger earnings from JPMorgan Chase and other big banks launched a stock market rally Friday.
JPMorgan surged 6 percent, by far the biggest gain in the Dow Jones industrial average. The Dow jumped 174 points to 12,748 at 2 p.m. Eastern. The Dow is coming off a six-day slump, the longest losing streak since mid-May.
JPMorgan, the country’s biggest bank, earned $5 billion in the most recent quarter, easily beating Wall Street’s forecasts. That came as a relief to investors who had been worrying about weaker earnings at major U.S. companies.
Investors were also relieved that JPMorgan’s trading loss wasn’t as bad as the most dire predictions. JPMorgan revealed that the loss from a derivative trade it first disclosed in May had grown to $5.8 billion, nearly triple the original estimate. The bank’s stock shot up $2 to $36.05.
JPMorgan’s underwriting business also fared better than many expected. Those results rubbed off on the investment banks Goldman Sachs and Morgan Stanley, driving both up more than 3 percent. Goldman jumped $3.45 to $97.47. Morgan Stanley rose 46 cents to $14.01.
Wells Fargo, the other major bank reporting results Friday, said a rise in lending drove its net income up 18 percent. Wells Fargo has managed to avoid problems plaguing other big banks and is now the country’s largest mortgage lender. The bank’s stock gained 3 percent, or $1.07, to $33.92.
In other trading, the Standard & Poor’s 500 index rose 19 points to 1,353 and the Nasdaq composite gained 38 points to 2,904.
The rally swept across the stock market. Five stocks rose for every one that fell on the New York Stock Exchange, and only 35 companies in the S&P 500 were lower. All 10 industry groups within the S&P 500 rose, led by financial stocks.
Even with the surge Friday, major market indexes are still on their way to weekly losses. The Dow is down 0.2 for the week, and the S&P 500 is off by 0.1 percent. The technology-heavy Nasdaq, which is more sensitive to swings in the economy, has slumped 1.2 percent.
The stock market took a beating this week as the U.S. corporate earnings season got off to a weak start and Europe stumbled along in its latest attempts to resolve the region’s debt crisis.
Among other stocks making big moves:
— Procter & Gamble rose 2 percent after reports emerged that board members of the consumer products giant are considering the removal of Chief Executive Officer Robert McDonald. On Thursday the Federal Trade Commission cleared activist investor William Ackman’s hedge fund to make an investment in the company, whose many products include Tide, Bounce and Duracell. P&G rose $1.34 to $65.05 and is up 6 percent for the week.
— Lexmark International plunged 15 percent. The printer maker warned late Thursday that it fared worse during the second quarter than expected, a result of slowing business spending. Its stock fell $3.55 to $20.76.
— Phillips 66 jumped 5 percent, following news that Warren Buffett said Berkshire Hathaway has invested in the refining company. The stock rose $1.66 to $34.68.
Benchmark Currency Rates. (Bloomberg)