Asian markets rallies on positive economic developments

Hang Seng, Seoul led region gains while Sensex, Shanghai, Sydney follows them

Stock markets in Asian region finished with notable gains on Thursday, 11 February 2010, on easing concerns about the global economy amid hopes the European Union will soon devise a package to aid Greece in tackling its financial crisis. Though cues from Wall Street were not that significantly positive following a flat close overnight, the South Korean central bank’s move to leave interest rates unchanged and the better-than-expected employment data from Australia are seen aiding sentiment in the region.

On Wall Street, stocks closed modestly lower, as more uncertainty on a debt-rescue plan for Greece and signals that the Fed may start to turn more hawkish weighed on the minds of investors. The Dow Jones Industrial Average lost 20 points, or 0.2%, to 10,038. The S&P 500 fell 2 points, or 0.2%, at 1068 and the Nasdaq went lower by 3 points, or 0.1%, at 2148.

In the commodity market, crude oil rose for a fourth day in New York on speculation oil demand will increase this year as Europe helps tackle Greece’s crippling debt problem and China reported a lower-than-expected inflation gain.

Crude for March delivery rose as much as 58 cents, or 0.8%, to $75.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $74.88 at 4:07 p.m. Singapore time.

Brent crude for March settlement gained as much as 54 cents, or 0.7%, to $73.08 a barrel on the London-based ICE Futures Europe exchange. It was at $72.82 a barrel at 4:15 p.m. Singapore time. The contract added 41 cents, or 0.6%, to $72.54 a barrel yesterday.

Gold gained in London as a declining dollar increased demand for the metal as an alternative investment. Gold for immediate delivery added $7.80, or 0.7%, to $1,079.90 an ounce at 8:55 a.m. London time. Bullion for April delivery was 0.3% higher at $1,079.90 on the New York Mercantile Exchange’s Comex unit.

In the currency market, the U.S. dollar was mixed in Asian trade after risk appetite improved on better-than-expected Australian jobs data and markets now wait for the end of a European Union summit for details of any rescue plan for Greece.

The Japanese yen was trading at 89.93, about unchanged from where it had ended in New York overnight. The US dollar fell against the Japanese yen on Wednesday after the U.S. trade deficit widened. The trade gap increased to negative $40.2 billion in December.

The Hong Kong dollar was trading at HK$ 7.7710 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 trades, the Australian dollar leapt over a US cent after a thumping jobs report led investors to bet the Reserve Bank may raise interest rates next month. The dollar bounded to a high of $US0.8893, and closed locally at $US0.8874, from $US0.8748 yesterday, after data showed Australia created 52,700 jobs in January, surging 3-½ times past what was forecast. Unemployment fell to an 11-month low of 5.3%, stirring concerns about inflation.

In Wellington trades, the New Zealand dollar hitched a ride higher with the Australian dollar in reaction to news of stronger than expected jobs growth across the Tasman, but it lost ground on the Australian cross. The NZ dollar was worth US 69.79c at 5 pm from US 69.38c at 8 am and US 69.37 c at 5pm yesterday.

The South Korean won ended at 1,156.80 won to the greenback, up 3.5 won from Wednesday’s close of 1,160.30.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.0450, 0.0210 up from Wednesday’s close of NT$32.0660.

In equities, Asian markets ended higher with Hong Kong and Chinese stocks rising after data showed a moderation in the mainland's consumer price inflation, while Australian shares received a boost from a solid jobs report.

In Japan, stock markets were closed on the account of public holiday.

In Mainland China, the share market finished the choppy trading in positive terrain, as investors cheered by dip in January inflation data, although gains were limited as most of investors opted to stay on sidelines ahead of Lunar New Year holidays next week.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, rose 3 points, or 0.1%, to 2,985.49, meanwhile the Shenzhen Component Index on the smaller Shenzhen Stock Exchange climbed 39.22 points, or 0.32%, to 12,224.60. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, added 0.2%, to 3,220.40.

On the economic front, the National Bureau of Statistics announced today that the China’s consumer price index, a main gauge of inflation, rose 1.5% year on year in January 2010. The CPI last month edged up 0.6% from December last year. The CPI rose 1.4% from a year earlier in urban regions, while the CPI in rural areas increased 1.8%, according to the statistics.

The producer price index, a major measure of inflation at the wholesale level, rose 4.3% in January from a year earlier, according to statistics released by the National Bureau of Statistics today.

Domestic banks lent 1.39 trillion yuan in January in anticipation of monetary policy tightening, the central bank said on its Website today. The amount was more than the total amount in the previous three months.

The National Development and Reform Commission (NDRC) said that China property prices in 70 cities rose 9.5% in January from a year earlier, the fastest pace in 21 months.

The People’s Bank of China said on Thursday that M2 money supply, the broadest measure of money supply in the country, surged 26% year-on-year in January, slower than the 27.7% increase in the previous month. The M1 money supply growth rate stood at 39%.

In Hong Kong, the shares galloped throughout the session, with key benchmark indices spurted 1.9% as investors risk appetite increased, underpinned by more benign than feared China inflation data, ease worries of further China tightening moves. Broad market volume remains thin as investors wary of being caught out over long weekend.

At the closing bell, the Hang Seng Index soared up 368.47 points, or 1.85%, to 20,290.69, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 Mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, spurted 236.67 points, or 2.09%, to 11,582.31.

In Australia, a surprisingly strong employment figures coupled with superior gains in energy and materials pulled key All Ordinaries higher. At the closing bell, the benchmark S&P/ASX200 index added 40.90 points, or 0.91%, to 4,554.30, meanwhile the broader All Ordinaries rose 42.80 points, or 0.94%, to 4,575.80.

In economic section, the Australian Bureau of Statistics said that the unemployment rate in Australia came in at a seasonally adjusted 5.3% in January, following the 5.5% rate in December. Employment increased 52,700 in January, following the addition of 35,200 in December.

Australia’s consumer inflationary expectations decreased to 3.2% in February from 3.5% in January, according to the outcome of latest survey by the Melbourne Institute.

In New Zealand, stock market declined once again, unable to hold on the slight gains made yesterday. At the closing today, the NZX 50 fell 0.66% or 20.23 points to 3065.29. Meanwhile, the NZX 15 declined by 0.82% or 45.19 points to close at 5506.63.

On the economic front, New Zealand food prices increased 2.1% in the January 2010 month. This follows five consecutive monthly falls in the food price index (FPI) and prices have now returned to levels last seen in September 2009. Fruit and vegetable prices rose 4.8%. For the year to January 2010, food prices rose 2.2%.

Meanwhile, the country’s manufacturing sector managed to post its fifth month of solid, though unspectacular growth. The PMI for January of 52 decreased a point from December to return almost to November's level of activity. A figure over 50 indicates the sector is generally expanding. While the overall seasonally adjusted result was in expansion, the unadjusted results showed all regions in decline during January.

In South Korea, stocks closed higher as investor sentiment was boosted by the imminent EU summit to help indebted Greece and China's economic data. The benchmark Korea Composite Stock Price Index rose 27.69 points to 1,597.81.

In Singapore, the key benchmark indices extended gains to hit fresh intraday high, as investors' risk appetite increased, underpinned by surprising economic data from Australia and China, and hope a key summit in Europe could lay out a rescue plan for debt-stricken Greece. At the settlement Thursday, the blue chip Straits Times Index was at 2,753.63, gained 19.24 points or 0.7%.

In Taiwan, equity markets were closed on the account of public holiday.

In Philippines, the stock market closed higher in line with the Asian markets despite a flat close on Wall Street overnight. The benchmark index PSEi escalated 1.80% or 51.64 points to 2,908.88, while the All Shares index went up 1.58% or 29.03 points to 1,856.20.

In India, the key benchmark indices pared gains after hitting fresh intraday highs in late trade. The BSE 30-share Sensex was up 230.42 points or 1.45% to 16,152.59. The S&P CNX Nifty was up 69.65 points or 1.46% to 4826.85.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly higher at 1249.42 while stock markets in Indonesia’s Jakarta Composite index gained by 24.32 points ending the day higher at 2507.75.

In other regional market, earnings from Rio Tinto, Credit Suisse and Danone helped shares gain ground in Europe on Thursday ahead of a meeting that could announce help for debt-laden Greece. Of major European regional equity markets, the U.K. FTSE 100 index rose 1.2% or 61.79 points to 5,194, the German DAX index advanced 0.3% or 18.58 points to 5,555 and the French CAC-40 index rose 0.8% or 26.49 points to 3,662.