Asian Market Commentary
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Asian Markets Mostly Subdued Amid Cautious Trades

Asian stock markets are mostly subdued on Thursday with investors tracking a weak lead from Wall Street where stocks drifted lower overnight amid worries about eurozone debt and some weak earnings reports.

After a flat start, the Australian market is edging higher with investors indulging in some strong buying in energy, mining and consumer staples stocks. Healthcare stocks are also moving higher, while financial and property trusts stocks are trading mixed.

The benchmark S&P/ASX 200 index is up 17.6 points or 0.4 percent at 4,366.3. The broader All Ordinaries index is trading at 4,444, up 16.8 points or 0.4 percent from its previous close.

Among bank stocks, ANZ Bank and Westpac are up with modest gains, while Commonwealth Bank of Australia and National Australia Bank are trading slightly weak. Bendigo & Adelaide Bank is down 0.3 percent and Bank of Queensland is up marginally.

Among top miners, BHP Billiton and Rio Tinto are up 0.8 percent and 0.2 percent, respectively. Newcrest Mining is down 1.4 percent and Fortescue Metals is gaining nearly a percent.

Fortescue Metals announced that production in the first three months to calendar 2012 was impacted by cyclones in Western Australia. Fortescue mined 9.68 million tonnes of ore in the three months to March 31, up 41 percent from the previous corresponding period, but down 14 percent from the three months to December 31, 2011.

In the energy sector, Woodside Petroleum, Origin Energy and Santos are up 1.3 to 1.5 percent, while Oil Search is gaining about 0.5 percent.

Woodside Petroleum has announced that its first quarter revenue was up 20 percent, despite a 10 percent fall in production due to the impact of cyclones. Woodside said higher prices for oil and gas had resulted in revenue growth in the three months to March 31.

Santos has maintained its full-year production target after lifting its first quarter production and sales revenue. Santos produced 12.4 million barrels of oil equivalent or mmboe, in the three months to March 31. This is up 13 percent on the same period in the previous year.

Challenger Limited shares are gaining about 5 percent, while Perseus Mining is up 3.2 percent. Treasury Wine Estates, Ramsay Healthcare, Ansell, Brambles, Campbell Brothers, Iluka Resources, Sonic Healthcare, David Jones, Sydney Airport and Boral are up 1 to 2 percent.

Whitehaven Coal is down more than 8.5 percent. Westfield Group, QBE Insurance Group and Suncorp Group are trading lower by 1.4 to 1.6 percent.

In economic news, business conditions in Australia improved slightly in the first three months of 2012 despite measures of demand such as forward orders and capacity utilization staying lackluster, according to a survey.

The National Australia Bank survey showed the business conditions index for the March quarter was plus three points, from plus two in the December quarter - staying just above the long-run average level of one index point.

After a weak start, the Japanese market regained some lost ground in late morning trades with investors picking up stocks at lower levels, buoyed by a slightly weakening yen.

The benchmark Nikkei 225 index, which tumbled to around 9,574 in early trades, is currently trading at 9,613, down 54.3 points or 0.6 percent from its previous close.

Shares from construction, railway, oil, insurance and paper sections started off on a highly negative note, but managed to recover some lost ground subsequently. Financial, automobile, steel and non-ferrous metals stocks are trading mixed.

Nippon Sheet Glass is down more than 6 percent. Obayashi Corp, Chugai Pharmaceutical, Ube Industries, Nippon Electric Glass, Nissan Chemicals, Nikon Corp and Nippon Paper Group are down 2 to 3 percent.

TDK Ltd shares drifted lower following a weak operating profit forecast for financial year 2012.

Fast Retailing, Showa Denko KK, Asahi Group Holdings, Shizuoka Bank, Mitsui & Co., Mitsui Mining, Pacific Metals, Bank of Yokohama, Inpex, Resona Holdings and Chubu Electric Power are also trading notably lower.

Taiyo Yuden is gaining more than 4 percent. Sumco Corp is up 3.7 percent. Hitachi Limited shares are up more than 2.5 percent after Mitsubishi UFJ Morgan upgraded the stock's target price.

Advantest, Konami Corp, Shinsei Bank, Kawasaki Kisen, Isuzu Motors, Fuji Heavy Industries, Mitsui OSK Lines, Fujifilm Holdings, Sumitomo Chemicals and Dainippon Screen are also up with impressive gains.

On the economic front, Japan saw a merchandise trade deficit of 82.55 billion yen in March, the Ministry of Finance said on Thursday - beating forecast for a shortfall of 223.2 billion yen following the 29.4 billion yen surplus in February.

Exports were up 5.9 percent on year, also blowing past expectations for an increase of 0.2 percent following the 2.7 percent contraction in the previous month. Imports climbed an annual 10.5 percent versus forecasts for a gain of 7.0 percent after rising 9.2 percent a month earlier.

The adjusted trade deficit was 621.3 billion yen - missing expectations for a shortfall of 446.3 billion yen after showing a deficit of 313.2 billion yen in February.

In the currency market, the U.S. dollar traded in the lower 81 yen range in early deals in Tokyo. The yen is currently trading at 81.50 to the U.S. dollar.

Among other markets in the Asia-Pacific region, Hong Kong and Malaysia are trading modestly higher. New Zealand and South Korea are down marginally, while Shanghai, Singapore and Taiwan are trading flat. Markets across the region ended higher on Wednesday.

On Wall Street, stocks ended lower on Wednesday with investors taking some profits after the previous session's gains. Lingering worries about the financial situation in Europe and some weak earnings reports too contributed to the decline.

The Dow ended down 82.8 points or 0.6 percent at 13,032.8, the Nasdaq dipped 11.4 points or 0.4 percent to 3,031.4 and the S&P 500 slid 5.6 points or 0.4 percent to 1,385.1.

Major European markets too ended weak on Wednesday. While the U.K.'s FTSE 100 index ended lower by 0.4 percent, the German DAX index and the French CAC 40 index lost 1 percent and 1.6 percent, respectively.

U.S. crude oil futures settled sharply lower on Wednesday, after an Energy Information Administration report showed U.S. oil stockpiles to have jumped more than expected for the week ended April 13. A strong dollar and some disappointing earnings reports too contributed to oil's decline.

Crude for May delivery dropped $1.53 or 1.5 percent to close at $102.67 a barrel on the New York Mercantile Exchange.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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