Asia Roundup: Higher ahead of Yellen’s testimony

12-Feb-2014 Intellasia | Business Times | Reuters | AFP | Bloomberg | AP | 7:54 AM Print This Post

Asia’s markets edged up yesterday Tuesday February 11 with investors sitting on the sidelines as they await the first testimony by the Federal Reserve’s new head to discover her plans for its stimulus programme.

Janet Yellen, who took over as the bank’s chair at the start of the month, will testify to a House of Representatives committee later in the day on the state of the economy and the course of monetary policy.

Sydney rose 0.62 per cent, or 32.4 points, to close at 5,254.5 and Seoul added 0.46 per cent, or 8.76 points, to 1,932.06.

Shanghai rose 0.84 per cent, or 17.60 points, to 2,103.67.

Tokyo was closed for a public holiday.

HONGKONG: SHARES rose 1.78 per cent yesterday, following a positive lead from Wall Street as investors await the new Federal Reserve chief’s first testimony to Congress.
The benchmark Hang Seng Index added 383.72 points to end at 21,962.98 on turnover of HK$66.69 billion, its biggest rise in nearly three months as investors looked to snap up beaten down Chinese stocks.
Heavily-weighted bank shares rallied. China Construction Bank jumped 3.1 per cent to HK$5.34, Bank of China rose 2.2 per cent to HK$3.25 and Ping An Insurance rose 5.12 per cent to HK$63.65.

SINGAPORE: THE Straits Times Index ended 11.9 points, or 0.39 per cent, higher at 3029.1 points.
The FTSE ST Mid Cap Index gained 0.57 per cent while the FTSE ST Small Cap Index rose 0.55 per cent.
Of the active stocks, DBS was unchanged, OCBC added 0.32 per cent, UOB rose 0.20 per cent, SingTel unchanged and Genting SP slipped 0.71 per cent.
The outperforming sector, the FTSE ST Basic Materials Index, appreciated by 2.19 per cent. Midas Holdings advanced 1.12 per cent, and Geo Energy Resources rose 1.59 per cent.

KUALA LUMPUR: THE FTSE Bursa Malaysia KLCI (FBM KLCI) closed higher yesterday in sync with regional peers as selected heavyweights helped the local benchmark to maintain above the 1,800-point level.
The FBM KLCI rose by 8.03 points to close at 1,824.17 after moving between 1,815.88 and 1,824.2 points throughout the day.
Heavyweight DiGi.com gained 16 sen, or 3.2 per cent, to RM5.16, followed by CIMB and Axiata, which added eight sen and six sen to close at RM7.23 and RM6.56, respectively.
On the scoreboard, the Finance Index soared 34.99 points to 16,664.34, the Plantation Index jumped 86.84 points to 8,516.71 and the Industrial Index increased 3.38 points to 3,089.54.
The FBM Emas Index rose 54.76 points to 12,593.14 points, FBMT100 Index garnered 50.59 points to 12,290.84 and the FBM 70 advanced 43.14 points to 13,809.32.
The FBM ACE Index, however, eased 18.1 points to 6,132.61.
Market breadth was positive as gainers led losers by 494 to 314, while 302 counters were unchanged, 483 untraded and 17 others suspended.
Volume rose to 2.71 billion shares worth RM2.34 billion from 1.94 billion shares worth RM1.87 billion yesterday.
Meanwhile, FBM KLCI futures contract on Bursa Malaysia Derivatives closed higher, tracking the cash market performance.
Spot month February 2014 rose 4.5 points to 1,820, March 2014 gained four points to 1,819.5, June 2014 inched 6.5 points to 1,817 points, and September 2014 added six points to 1,815.5.
Turnover dipped to 5,197 lots from Monday’s 5,301 lots, while open interest widened to 41,872 contracts.

In other markets:

* Mumbai rose 0.14 per cent, or 29.10 points, to end at 20,363.37 points. Bharat Forge rose 5.85 per cent to 367.55 rupees a shares and Jaiprakash Power Ventures rose 5.54 per cent to 14.48 rupees.

* Bangkok added 0.43 per cent or 5.59 points to 1,296.25. Oil company Bangchak Petroleum gained 2.70 per cent to 28.50 baht, while Bangkok Bank rose 2.02 per cent to 176.50 baht.

* Jakarta closed up 0.44 per cent, or 19.44 points, at 4,470.19.Miner Aneka Tambang rose 2.46 per cent to 1,040 rupiah, while telecommunications provider Telekomunikasi Indonesia fell 0.87 per cent to 2,275 rupiah.

* Taipei rose 0.46 per cent, or 38.61 points, to 8,430.56. Taiwan Semiconductor Manufacturing Co added 1.46 per cent to T$104.5 while chip design house MediaTek was 2.20 per cent higher at T$419.0.

* Wellington rose 0.33 per cent, or 15.83 points, to 4,848.88. Fletcher Building was up 1.89 per cent at NZ$9.15 and Telecom gained 0.63 per cent to NZ$2.39.

* Manila was 1.06 per cent higher, adding 63.78 points to 6,106.03. Bank of the Philippine Islands rose 0.23 per cent to 87.60 pesos and SM Investments added 0.79 per cent to 700.50 pesos.

VIETNAM: Vietnamese stocks ended lower as investors rushed to take quick profit in late trading when the market showed signs of weakening, boosting liquidity higher.
The benchmark VN Index lost 2 points or 0.36% to 553.9. Volume rose 59% to 175 million shares worth of VND2.853 trillion. Put-through trading contributed 3.97 million shares worth of VND203.36 billion.
We saw 0.72 million VNM shares changed hands at the ceiling level of VND149,000 each, and 1.3 million FDC shares changed hands at VND26,500 each.
The market breadth turned negative with 98 gainers, 130 losers and 70 unchanged.
The VN30 lost 4.02 points or 0.64% to 627.4. Among 30 constituents, 4 gained, 20 fell, 6 stood still.
Market opened in the green with 3.7 million shares changed hands. Trading moved fast as both buyers and sellers were active. Most of the trading time, the index stayed in the positive ground thanks to broad-based gain. However, when the market heat was higher in the afternoon session, strong selling forces appeared and sent the market down to the negative territory with massive losses.
The top market caps were firms were mixed, VNM, BID lost, VIC, MSN gained, VCB, GAS stood still.
Banking shares were weak, CTG, VCB stood still, EIB, MBB, STB, BID lost.
Blue chips were mostly lower on profit taking.
On the Hanoi Stock Exchange, the HNX lost 0.01 point or 0.01% to 75.55. Trading volume rose 30.4% to 90.52 million shares worth VND838.5 billion.
The breadth was narrow with 116 gainers, 116 losers, 63 unchanged and the rest untraded.
The HNX30 lost 0.94 point or 0.63% to 148.39.

EUROPE: European stock markets rose solidly yesterday as traders looked ahead to the first testimony by the Federal Reserve’s new head for clues over US stimulus plans.
Ahead of Janet Yellen’s appearance before the House of Representatives committee on Tuesday, share prices were mostly higher despite some heavy falls for blue-chip companies, including British bank Barclays and French cosmetics giant L’Oreal.
London’s benchmark FTSE 100 index climbed 0.71 per cent to stand at 6,638.69 points in midday deals.
Frankfurt’s DAX 30 jumped 1.25 per cent to 9,406.28 points and Paris’s CAC 40 advanced 0.56 per cent to 4,260.80 compared with Monday’s closing values.
“Traders are pricing in Yellen’s dovish outlook, as she is likely to keep the stimulus package unchanged for the foreseeable future,” said David Madden, market analyst at traders IG.

AMERICA:  Reassuring words from the new head of the Federal Reserve sent stocks soaring on Tuesday and gave the market its longest winning streak this year.

The Dow Jones industrial average jumped nearly 200 points after Fed Chair Janet Yellen said she would continue the central bank’s market-friendly, low-interest rate policies.

Investors also welcomed news that Congress appeared poised to raise the U.S. borrowing limit without the political drama that happened late last year. That would avert the threat of a disastrous default on the U.S. government’s debt.

“Many of the risks everyone had their eyes on for 2014 are quickly being cleared away,” said Kristina Hooper, head of U.S. investment strategies for Allianz Global Investors.

On Tuesday, the Dow Jones industrial average rose 192.98 points, or 1.2 percent, to 15,994.77. It was the Dow’s third triple-digit advance in four days.

The Standard & Poor’s 500 index rose 19.91 points, or 1.1 percent, to 1,819.75 and the Nasdaq composite rose 42.87 points, or 1 percent, to 4,191.04. The Nasdaq is now in positive territory for 2014, while the S&P 500 and Dow are down 1.5 percent and 3.5 percent the year, respectively.

The Dow and the S&P have risen four straight days, their longest stretch of gains this year.

It’s a positive shift for the stock market, which had its worst January since 2010 as concerns about growth in China and the U.S. sent investors shifting from stocks to bonds. The first month was so rough, with frequent triple-digit swoons in the Dow, that it raised worries of a “correction,” a decline of 10 percent or more from a peak. That kind of slump hasn’t hit the stock market in more than two years.

But this week, investors had two worries resolved, analysts say.

Yellen, in her first public comments since taking over for Ben Bernanke at the Fed last week, told Congress that she expects a “great deal of continuity” with her predecessor.

Yellen said she supports Bernanke’s view that the economy is strengthening enough to withstand a pullback in the Fed’s stimulus, but that interest rates should stay low to encourage more growth. Last week, the Fed announced it would reduce its bond purchases by $10 billion to $65 billion a month.

“She’s being well received (by investors),” said Rob Stein, CEO of Astor Investment Management in Chicago.

Politicians also appear to have reached an agreement over raising the nation’s borrowing limit, also called the “debt ceiling.”

House Speaker John Boehner said Tuesday that he would allow a vote to raise the borrowing limit without any conditions attached. The announcement came a few days after Treasury Secretary Jack Lew said the federal government would exhaust its ability to borrow money by Feb. 27. Lew urged Congress to pass a bill to raise the limit as soon as possible.

The approaching deadline had been a lingering source of worry for investors, who still bear scars from the last two debt debates.

The political tussle over raising the borrowing limit in August 2011 eventually led Standard & Poor’s to downgrade the United States’ credit rating, which in turn caused the stock market to go through three months of nauseating swings. During the October 2013 debate, the United States came within days of running out of cash, causing investors to flee some parts of the U.S. Treasury market out of fear that the federal government could not pay its debts.

“Investors were preparing for the debt ceiling negotiations to become a disaster,” said Brian Reynolds, market strategist with Rosenblatt Securities.

The surge in the last four days has helped the market avoid its first correction since 2011.

The S&P 500′s recent decline brought the index down as much as 5.8 percent from its peak of 1,848 reached on Jan. 15.

With the recent surge and signs of volatility fading, the market’s “mini” correction may have been just enough for investors. The CBOE Volatility Index, known better as the “VIX” and an often-quoted sign of fear among investors, dropped by 5 percent Tuesday. The VIX is at its lowest level in three weeks.

“So many people expected a significant correction that it seemed like it was almost pre-destined to happen,” Allianz’s Hooper said. “Even though it was a ‘mini-correction,’ investors were able to check the box and now there’s a greater comfort to move back into stocks.”

Benchmark Currency Rates

USD EUR JPY GBP CHF CAD AUD HKD

USD

1.3633 0.0098 1.6445 1.1129 0.9078 0.9016 0.1289

EUR

0.7335 0.0072 1.2063 0.8163 0.6659 0.6614 0.0946

JPY

102.5300 139.7600 168.5750 114.1000 93.0810 92.4430 13.2181

GBP

0.6081 0.8290 0.0059 0.6767 0.5520 0.5483 0.0784

CHF

0.8986 1.2250 0.0088 1.4777 0.8157 0.8101 0.1159

CAD

1.1016 1.5018 0.0108 1.8116 1.2260 0.9932 0.1420

AUD

1.1092 1.5119 0.0108 1.8236 1.2342 1.0069 0.1430

HKD

7.7562 10.5738 0.0756 12.7541 8.6315 7.0406 6.9939

Source: Bloomberg

 


Category: FinanceAsia

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