Asian markets wrap up Wednesday with gains

Sydney, Nikkei, Hang Seng contributes to the regional rally while Seoul, Sensex bucks the trend

Stock market in Asian region pushed up for a second day on Wednesday, 7 October 2009, as gold’s surge to record highs and the dollar's tumble boosted resource shares.

On Wall Street, stocks marched higher as the dollar weakened and gold hit a new high. The Dow Jones Industrial Average finished higher by 132 points, or 1.4% to at 9731, while the S&P 500 advanced 14 points, also 1.4%, to 1055. The Nasdaq Composite ran up 35 points, or 1.7%, to 2104.

In the commodity market, crude oil rose for a third day in New York after an industry report showed a decline in fuel and crude stockpiles in the U.S., the biggest energy-consuming nation.

Crude oil for November delivery rose as much as 88 cents, or 1.2 percent, to $71.76 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.40 at 2:55 p.m. Singapore time.

Brent crude oil for November settlement rose as much as 89 cents, or 1.3%, to $69.45 a barrel on the London-based ICE Futures Europe exchange. It was at $69.17 at 2:55 p.m. Singapore time.

Gold traded near its record and oil advanced for a third day as investors bought commodities to protect their wealth on speculation the dollar will extend its decline and inflation accelerate. Gold for immediate delivery traded at $1,038.50 an ounce at 11:51 a.m. in Singapore compared to yesterday’s record of $1,043.78. Crude oil for November delivery rose 63 cents, or 0.9%, to $71.51 a barrel, in electronic trading on the New York Mercantile Exchange.

In the currency market, US dollar remains pressured against commodity currencies.

The Japanese yen strengthened against major currencies. The Japanese yen was quoted at 88.61 against the greenback.

The Hong Kong dollar was trading at HK$ 7.7500 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In Sydney trade, the Australian dollar held near 14-month highs as investors bet on further interest rate rises later this year, with strong economic data further boosting the case for the currency. The Aussie rose as far as 89.10 US cents, just a whisker below a 14-month high of 89.20 US cents hit on Tuesday. It was steady against the yen, however, at 78.96. At the local close, the dollar was buying 88.96-89.01 US cents

In Wellington trade, the New Zealand dollar held near highs it reached in offshore trading on Tuesday night today with the help of a weak US dollar. The NZ dollar was US73.40c at 5 pm from US73.24c at 8am and US73.35c at 5pm yesterday. It rose to US73.80c on Tuesday night; it’s highest since July 2008.

The South Korean currency closed at 1,170.5 won to the greenback, down 0.2 won from Tuesday's close, as suspected intervention outweighed stock buying by foreign investors.

The Taiwan dollar was unchanged against the greenback. The Taiwan dollar was closed at NT$ 32.1800, unaltered from Tuesday’s close of NT$32.1800.

In the Asian equity market, most of the regional stocks ended higher, with resource stocks rallying on the back of strong commodity prices as gold hovered near its record.

In Japan, shares market spurted higher, as investors bet on the global recovery gaining traction following the first rate hike by a G20 nation. Banks and commodities registered the strong gains on bargain hunting and due to rising prices for their products. At the closing bell, the Nikkei 225 Stock Average index rose 107.80 points or 1.11%, to 9,799.60, while the broader Topix was up 14.06 points, or 1.61%, to 885.69.

On the economic front, the Cabinet Office said Japan leading index climbed to 83.3 in August from 82.5 in previous month. The coincident index increased to 91.4 in August from 89.8 in July. Further, the lagging index increased to 83.8 from 82.8 in the previous month.

Stock markets in China have been shut since 1 October 2009 for National day and autumn festival celebrations. Trading will resume on 9 October 2009.

In Hong Kong, the stock market surged with broad based gains across the sector on renewed faith a recovery in the global economy was sustainable. Resource-related shares outperformed, benefited by higher commodity prices amid global economic optimism. The Hang Seng Index jumped 430.06 points, or 2.07%, to 21241.59, while the Hang Seng China Enterprise added 333.31 points, or 2.78%, to 12,319.42.

In Australia, the shares market bounced with broad based gains across the sector as investors bet that yesterday’s interest rate hike is a strong sign the global economy is on the road to recovery. Shares of materials and recourses and energy issues led the rally on the back of sharp gains in base metal and crude oil prices, meanwhile gold miners benefited after precious metal prices hit a record high overnight. Banks and financial sand property trusts augmented as the Australian central bank’s decision to raise interest rates boosted investor optimism about the global economy.

At the closing bell, the benchmark S&P/ASX200 index spurted 104.1 points, or 2.27%, to 4,695.7, meanwhile the broader All Ordinaries gained 98.60 points, or 2.14%, to 4,695.8.

On the economic front, the Reserve Bank of Australia Tuesday raised its cash rate by 25 basis points to 3.25% amid signs the economy is recovering from the global crisis.

The Department of Education, Employment and Workplace relations said Wednesday Australia’s monthly leading indicator of employment rose for the fourth consecutive month in October, after falling for a revised 19 consecutive months. The leading indicator climbed to minus 0.934 in October from minus 1.104 in the previous month.

The Australian Industry Group-Housing Industry Association Performance of Construction Index grew by a seasonally adjusted 8.4 points in September to 50.8, scraping past the line that separates expansion from contraction. It was the first time the series registered growth since February 2008, which was attributed to low interest rates, combined with the first homeowners grant.

In New Zealand, benchmark index ended the day in the negative terrain although most of the Asian counterparts were mostly in the green region. The New Zealand share market only managed to edge up in early trade, despite strong gains in stocks in the United States. The NZX50 fell 0.33% or 10.35 points to 3141.18. The NZX 15 declined 0.95% or 54.49 points to close at 5719.66.

On the economic front, bold tax reforms and changes to the mix of monetary and fiscal policy are needed if New Zealand is to rebalance its economy and close the gap with Australia, according to the Treasury’s head. New Zealand needs to overhaul its tax system, bringing down income tax and potentially increasing GST or imposing a land tax, Treasury Secretary John Whitehead told a business audience in Queenstown last month. Speech notes were posted on the department's website today. Combined with slower growth in government spending, that would allow the central bank to keep interest rates lower for longer, which will set the economy on a high-growth path to catch Australia, he said.

In South Korea, stocks closed marginally lower as rallies by commodities producers were offset by falls in tech chips and auto exporters. The benchmark Korea Composite Stock Price Index (KOSPI) dropped 0.44 points, or 0.03 percent, to 1,598, extending its losing streak to a fifth day.

In Singapore, stock market spurted with broad based gains across the sector on tracking strong cues from triple digit gains in Wall Street overnight and other Asian bourses. Shares of banks, properties, and major blue chip outperformed on expectation a rebound in the global economy would fuel demand. Meanwhile companies reliant on overseas sales bounced on renewed faith a recovery in the global economy was sustainable. The blue chip Straits Times Index was ended at 2,634.63, rose 22.74 points or 0.87%.

In Taiwan, stock market rose to a new 15-month intraday high with foreign buying in financial and construction shares on expectations of closer trade ties with China is fuelling gains in Taiwan stocks.

The benchmark Taiex share index extended its winning streak in third straight session by ending the day higher by 72.61 points or 0.96% in a day, closing the day at 7608.66, highest closing since 26 July 2008 when market closed the day at 7811.80.

In Philippines, the stock market extended gains for the second consecutive day, closing almost 3% higher, as investor’s sentiment was boosted by Tuesday's rally on Wall Street sparked by Australia's decision to raise its main interest rate by one-quarter of a point and optimism that the global economy was recovering from recession.

Moreover, positive news on the economic façade also indicated that the impact of global crisis might have bottomed out. Slump in the leading economic indicator slowed down in the third quarter (Q3), an indication that the Philippine economy may be on its way to a slow recovery from the crisis that gripped the global economy starting in late 2008.

The benchmark index PSEi ascended 2.86% or 82.60 points to 2,967.06, while the All Shares index escalated 2.12% or 38.62 points to 1,857.51.

In India, weakness in index heavyweight pulled key benchmark indices to a fresh intraday low in late trade. High volatility was the hallmark of the day's trading session. The BSE 30-share Sensex went down 151.88 points or 0.9% to 16,806.66. The S&P CNX Nifty closed down 41.65 points or 0.83% to 4985.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.48% or 5.88 points to 1212.73 while stock markets in Indonesia’s Jakarta Composite index ended the day lower at 2513.41.

In other regional market, European shares traded higher, shrugging off a lackluster start to the session after gold futures hit another all time high. Major regional European equity markets were also higher, with the U.K. FTSE 100 index 5,142, up 0.1% or 4.44 points at 5,142, the German DAX index up 0.2% or 8.20 points at 5,666 and the French CAC-40 index up 0.3% or 8.87 points at 3,779.