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Asian Markets Trade Higher

Asian stock markets are mostly trading notably higher on Wednesday with investors tracking positive cues from Wall Street where stocks posted solid gains overnight following an encouraging report on U.S. manufacturing activity.

Though markets in Australia and Japan came off their early highs, the mood continues to remain fairly bullish in the region.

The Australian market opened on a firm note but retreated soon with investors treading cautiously amid a slew of earnings reports.

Shares from the financial and utilities sectors are trading weak. Energy, mining, healthcare and information technology stocks are finding support, while stocks from industrial and consumer staples sectors are off their early highs.

The benchmark S&P/ASX 200 index, which rose to 4,445.9 in early trades, is currently trading at 4,430, up slightly from the unchanged line. The broader All Ordinaries index is up 1.4 points at 4,498.7, nearly 15 points off the day's high of 4,513.2.

Among bank stocks, Commonwealth Bank of Australia, National Australia Bank and Westpac are trading lower by 0.5 to 0.8 percent, while ANZ Bank is down 1.2 percent. ANZ has lifted its first-half profit by 10 percent to A$2.92 billion, but says margins in its Australian business are declining.

Bank of Queensland is down 2.8 percent, while Bendigo & Adelaide Bank is trading in positive territory with a small gain.

Among top miners, BHP Billiton and Rio Tinto are trading modestly higher, while Fortescue Metals and Newcrest Mining are trading weak.

In the energy sector, Woodside Petroleum is up 1.2 percent and Origin Energy is trading higher by about 1 percent. Origin Energy announced that it has struck a deal to supply gas to a joint venture of major energy suppliers. Caltex Australia, Santos and Oil Search are trading weak.

Brambles Limited shares are up more than 3 percent after the company said it is on track to meet its full-year profit target and announced a 33 percent rise in its latest sales results.

Treasury Wine Estates, QR National, CSL and Stockland are trading higher by 2 to 3 percent.

Cochlear, Incitec Pivot, News Corporation, Perseus Mining, Resmed Inc and Onesteel are also trading notably higher.

WorleyParsons rose sharply after the company said it won a four-year contract to provide engineering and construction management services to boost production from onshore oil fields located in the partitioned zone between Kuwait and Saudi Arabia. However, the stock gave up some gains subsequently and is currently trading 0.7 percent up from its previous closing price.

APA Group shares are down more than 6.5 percent. JB Hi-Fi is trading lower by 3.2 percent. Spark Infrastructure, Fairfax Media, Challenger, Atlas Iron, Sims Metal Management and Monadelphous Group are down 1.6 to 2.8 percent.

The Japanese market too retreated after a firm start. After moving up smartly in early trades with the overnight positive close on Wall Street and the yen's weakness against the U.S. dollar triggering some buying in front line stocks, the market gave up most of its gains subsequently and was trading flat when the morning session ended.

Insurance, mining, automobile, steel and non-ferrous metals stocks opened on a firm note, but subsequently gave up some gains. Electric power, railway and chemicals stocks are trading mixed.

The benchmark Nikkei 225 index, which edged past 9,400 in early trades, was up with a very small gain at 9,351.5 when the morning session ended.

Sharp Corp, Casio Computer, Nippon Electric Glass, Chubu Electric Power and Tokyo Electric Power drifted lower by 2 to 3.5 percent.

Mitsubishi Chemical Holdings, Fast Retailing, Kansai Electric Power, Ricoh, Tokyo Gas, Pioneer Corp, Osaka Gas, Bridgestone Corp and Ebara Corp also posted notable losses.

Toyota Tsusho Corp, Fuji Electric, Japan Tobacco, Unitika, Nippon Sheet Glass, Tokio Marine Holdings, Fujitsu, Dai-ichi Life Insurance and Pacific Metals gained 1.5 to 3 percent.

Among automobile stocks, Isuzu Motors, Honda Motor, Nissan Motor, Toyota Motor and Suzuki Motor posted modest gains, while Hino Motors gained about 1.3 percent. Mitsubishi Motor and Mazda Motor traded flat.

In the banking space, Aozora Bank, Mitsubishi UFJ Financial and Shinsei Bank surged higher. Mizuho Financial, Shizuoka Bank and Chiba Bank traded weak, while SMFG and Bank of Yokohama were flat.

On the economic front, Japan's private sector growth eased marginally in April from March's record-high, the latest survey by Markit Economics revealed Wednesday.

The composite output index, which measures activity in both manufacturing and service sectors, fell to 51.3 in April from March's series record-high of 53.2. However, private sector employment recorded growth for the first time in 23 months. Also, this was the strongest gain in nearly four years.

The seasonally adjusted Business Activity Index for the services sector posted 51 in April, down from 53.7 in March. Nonetheless, service sector optimism rose to the highest level in 34 months in April.

In the currency market, the U.S. dollar traded in the lower 80 yen-range in early deals in Tokyo. The yen is currently trading at 80.18 to the dollar.

Among other markets in the Asia-Pacific region, Shanghai, Hong Kong, Malaysia, New Zealand, Singapore, South Korea and Taiwan are all trading notably higher, while Indonesia is up marginally.

On Wall Street, stocks ended with solid gains on Tuesday with traders reacting positively to an upbeat report on U.S. manufacturing activity.

The Dow rose 65.7 points or 0.5 percent to 13,279.3, the Nasdaq edged up 4.1 points or 0.1 percent to 3,050.4 and the S&P 500 climbed up 7.9 points or 0.6 percent to 4,405.8.

Major European markets were closed on Tuesday. The U.K. market ended on a strong note, with its benchmark FTSE 100 index gaining about 1.3 percent.

U.S. crude oil futures rallied to settle at a five-week high on Tuesday, on some encouraging manufacturing data from the U.S. Crude for June delivery gained $1.29 or 1.2 percent to close at $106.16 a barrel on the New York Mercantile Exchange.

by RTTNews Staff Writer

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