Asia: Wave of optimism

Asian shares were widely up yesterday Tuesday July 17, led by a sharp rise in Hong Kong, amid hopes of Chinese and US stimulus measures ahead of Federal Reserve chairman Ben Bernanke’s appearing before Congress.

Barclays Bank chief currency strategist Masafumi Yamamoto in Tokyo warned: “If there is no indication (for more easing) from him, stocks and long-term US Treasury yields will fall on disappointment.”

Japanese shares gained on bargain-hunting following a three-day weekend, but buying was limited with the dollar under selling pressure. Tokyo’s benchmark Nikkei 225 Index rose 0.35 per cent, or 30.88 points, to 8,755.00.

The upside may be limited, with an under-pressure dollar discouraging investors from buying shares in Japanese exporters, said Securities Japan chief market analyst Masayuki Otani.

Chinese shares climbed on bargain-hunting after hitting a three-year low on Monday, with the Shanghai Composite Index adding 0.62 per cent, or 13.23 points, to 2,161.19.

Tang Yonggang, an analyst at Hong Yuan Securities, told Dow Jones Newswires that Shanghai’s rise was “just a technical rebound and the downtrend for the market remains intact”.

Sydney’s ASX 200 rose 0.87 per cent, or 35.7 points, to 4,140.8, and the Kospi in Seoul was up 0.23 per cent, or 4.17 points, at 1,821.96.

HONG KONG: STOCKS powered up yesterday, driven by short-covering and investor hopes of stimulus measures in China and the United States.
The benchmark Hang Seng Index rose 1.75 per cent , or 333.99 points, to 19,455.33.
There were several factors behind the surprise rise, said Jackson Wong, an investment manager at Tanrich Securities, including investor hopes of new quantitative easing in the US.

SINGAPORE: SOUTHEAST Asian stock markets, except for Manila’s, rose yesterday, extending their gains for a third day on hopes of a further stimulus from the US Federal Reserve.
In Singapore, the benchmark Straits Times Index was up 0.54 per cent, or 16.05 points, at 3,014.80, its highest since April 2. Trading volume was higher than the 30-day average due to bargain hunting.
Of the actives, vehicle distributor Jardine Cycle and Carriage rose 2.30 per cent to S$47.06, while DBS Bank was down 0.42 per cent to S$14.22.

KUALA LUMPUR: SHARE prices closed higher for the second consecutive day with buying interest seen in telecommunication blue chips, dealers said.
The FTSE Bursa Malaysia KLCI (FBM KLCI) ended up 3.19 points at 1,639.15, a fresh all-time high.
A dealer said the market was riding on a stronger ringgit and optimism on China’s economic growth, but the uptrend was limited by profit-taking activities.
The Finance Index dropped 30.7 points to 14,623.5, Plantation Index declined 27.58 points to 8,821.56, while the Industrial Index increased 2.55 points to 2,865.08.
The FBM Emas Index rose 24.43 points to 11,217.10, FBM ACE Index was 1.97 points higher at 4,358.59 and the FBMT100 increased 25.5 points to 11,034.51.

In other markets:

* Taipei rose 0.52 per cent, or 36.96 points, to 7,127.00.

* Bangkok added 0.82 per cent, or 9.96 points, to 1,224.21.

* Manila fell 0.24 per cent, or 12.87 points, to 5,285.12.

* Jakarta closed 33.20 points higher, or 0.82 per cent, to 4,080.67.

* Mumbai ended flat, up 0.01 per cent or 1.99 points to 17,105.3.

VIETNAM: Vietnamese shares bounced back strongly today led by securities stocks, volume rose thanks to heavy CTG put through.
The benchmark VN Index rose 3.57 points or 0.86% to 417.55. Volume rose 15.34% to 48.1 million shares worth of VND782.7 billion. Put through trading contributed 12.4 million shares worth of VND275.16 billion.
The VN30 gained 4.41 points or 0.9%, to 493.04. Amongst its 30 members, 21 gained, 0 lost and 9 unchanged.
On the Hanoi Stock Exchange, the HNX advanced 1.62 points or 2.32% to 71.4. Trading volume rose 17.5% to 40.5 million shares worth VND369.9 billion.
HNX30 added 4.8 points or 3.66% to 136.23.

EUROPE: European equities trod water yesterday as investors awaited testimoney from US Federal Reserve chairman Ben Bernanke they hope will point to further stock-boosting monetary stimulus.
The FTSEurofirst was down 0.76 points, or 0.1 per cent at 1,042.95 by 1028 GMT.
London’s FTSE 100 index fell 0.39 per cent to 5,640.91 points, but Frankfurt’s DAX 30 index added 0.34 per cent to 6,587.84 and in Paris the CAC 40 won 0.36 per cent to 3,191.27.
Madrid rallied by 0.94 per cent and Rome added 0.17 per cent, despite news that Moody’s ratings agency has downgraded 13 Italian lenders.
“Equities are … carrying on the positive tone from Asian Pacific markets overnight,” said GFT Markets analyst Fawad Razaqzada.

AMERICA: Stronger earnings from Mattel, Coca-Cola and other big companies lifted the Standard & Poor’s 500 index on Tuesday for only the fourth day this month.

Mattel jumped 9 percent, more than any other company in the S&P. The country’s biggest toy maker said net income rose because of better sales of Barbie dolls and lower advertising costs. Its stock climbed $3.01 to $34.05.

Coca-Cola posted higher income and revenue than Wall Street had expected, thanks in part to booming business overseas. Coke rose $1.21, or 1.6 percent, to $77.69.

The S&P rose 10.03 points to 1,363.67. The Dow Jones industrial average gained 78.33 points to 12,805.54, only its third increase of the month. Concern about corporate earnings and slower economic growth have weighed on the market.

As the earnings season got under way last week, analysts had expected quarterly profits for companies in the Standard & Poor’s 500 index to fall 1 percent compared with the year before, according to S&P Capital IQ, the research arm of S&P. That would break a streak of higher earnings that started in the last quarter of 2009.

Goldman Sachs also reported earnings and revenue that beat Wall Street’s forecasts. The bank said it bundled more mortgages into bonds, leading to a 37 percent increase in sales from mortgage and commodity trading. Its stock gained 30 cents to $97.98.

The gains were broad. All 10 industries in the S&P 500 rose, led by health care companies. The Nasdaq composite index gained 13.10 points to 2,910.04.

Among other stocks making big moves:

- Mosaic jumped 5 percent. The fertilizer maker’s net income beat Wall Street’s forecasts, with the help of stronger phosphate sales and higher prices for potash. Mosaic also doubled its quarterly dividend to 25 cents per share. The stock gained $2.84 to $58.21.

- Reports that HSBC allowed Mexican drug cartels to launder billions through its U.S. banks helped push the bank’s stock down. A Senate investigation also said some HSBC bank affiliates ignored U.S. government bans against financial transactions with Iran and other countries. HSBC fell 20 cents to $43.28.

- Walt Disney led the Dow, gaining $1.49, or 3.1 percent, to $49.35 after getting an upgrade by analysts at Bank of America.

Benchmark Currency Rates (Bloomberg)

	USD	EUR	JPY	GBP	CHF	CAD	AUD	HKD
USD	–	1.2300	0.0126	1.5660	1.0238	0.9882	1.0318	0.1289
EUR	0.8132	–	0.0103	1.2734	0.8326	0.8035	0.8391	0.1049
JPY	79.0800	97.2400	–	123.8380	80.9570	78.1400	81.6040	10.1960
GBP	0.6386	0.7853	0.0081	–	0.6538	0.6310	0.6589	0.0823
CHF	0.9768	1.2010	0.0124	1.5296	–	0.9651	1.0077	0.1259
CAD	1.0120	1.2445	0.0128	1.5848	1.0362	–	1.0442	0.1305
AUD	0.9693	1.1917	0.0123	1.5177	0.9924	0.9576	–	0.1250
HKD	7.7560	9.5381	0.0981	12.1444	7.9406	7.6643	8.0037	–

 

Category: FinanceAsia