Asian stock markets are mostly trading higher on Wednesday, tracking a positive lead from Wall Street where stocks posted solid gains overnight amid optimism about further stimulus from the U.S. Federal Reserve. Though some of the markets are trading off their early highs due to profit taking, the mood remains somewhat upbeat in the region.
Amid a slew of economic data, the Australian market gave up some early gains, but is still trading fairly high up in positive territory. Financial, energy and information technology stocks are among the prominent gainers. Mining and healthcare stocks are also finding fairly good support.
The benchmark S&P/ASX 200 index, which surged to 4,159.3 after a positive start, is currently trading at 4,145, up 21.7 points or 0.5 percent from its previous close. The broader All Ordinaries index is up 22.6 points or 0.5 percent at 4,190, off the day's high of 4,202.6.
Among bank stocks, Westpac is up more than 2 percent, National Australia Bank is gaining about 2 percent, ANZ Bank is gaining 1.2 percent and Commonwealth Bank of Australia is trading 1 percent up, while Bendigo & Adelaide Bank and Bank of Queensland are trading flat.
Among top miners, BHP Billiton is up nearly a percent, Rio Tinto is gaining 1.8 percent and Fortescue Metals is trading higher by 2.5 percent, while Newcrest Mining is trading weak, losing about 1 percent.
In the energy sector, Woodside Petroleum, Santos and Caltex Australia are up 0.5 to 0.7 percent, while Oil Search and Origin Energy are up 1.7 percent and 1.5 percent, respectively.
Lynas Corporation shares are up nearly 4 percent following an announcement from the company that it hopes to fire up its rare earths plant in Malaysia soon after a parliamentary panel ruled the project is safe.
The panel's decision last week removed the final obstacle faced by Lynas, after the science ministry rejected an appeal by residents to revoke a licence granted to Lynas earlier this year.
Bluescope Steel is up nearly 5 percent. Challenger, Incitec Pivot, Whitehaven Coal, Resmed and AMP are trading higher by 1.5 to 2.5 percent.
Perseus Mining, Toll Holdings, Graincorp, Amcor and Regis Resources are trading lower by 1.5 to 2.5 percent.
In economic news, the Conference Board's leading index for Australia declined 1.4 percent in April, the Conference Board reported Wednesday. The Board said a large decline in building approvals was the primary reason for the decline. It added that weakness among the leading indicators was "somewhat more widespread than the strengths in recent months."
The coincident index, which measures current economic activity, was up 0.2 percent for April. The board said modest increases were seen in in all sub-categories of the CEI, the Board said.
A leading indicator of economic activity in Australia signaled sharp loss of growth momentum in the second half of this year, a report from Westpac Bank and Melbourne Institute showed Wednesday.
Meanwhile, the Westpac-Melbourne Institute leading index, which indicates the likely pace of economic activity three to nine months into the future, was 0.2 percent in April, well below its long term trend of 2.6 percent.
"The Leading Index is pointing to a sharp slowdown over the second half of this year," Westpac Senior Economist Matthew Hassan said.
The annualised growth rate of the coincident index, which gives a pulse of current activity, was 4.3 percent, well above its long term trend of 3.1 percent.
According to data released by the federal government, job advertisements on the internet rose by 3.4 per cent in May. The Department of Education, Employment and Workplace Relations' internet vacancy index, seasonally adjusted, was 84.2 points in May, up from April but 11.1 per cent lower than a year ago.
In the currency market, the Australian dollar opened higher and was quoting at US$1.0188 in early trades, up notably from Tuesday's close of US$1.0126.
The Japanese stock market opened on a bright note with investors indulging in some brisk buying at several counters, tracking cues from the U.S. and European markets. The yen's marginal decline against the euro too contributed to the positive start.
With several stocks from automobile, steel, non-ferrous metals, financial, construction and retail sectors trading firm, the benchmark Nikkei 225 index was up 66.3 points or 0.8 percent at 8,722.2 when the morning session ended.
Shares from communications, glass & ceramics and chemicals sections also moved higher and posted notable gains.
Mitsubishi Paper Mills shares rose more than 7 percent in early trades. Sumitomo Mitsui Trust Holdings moved up by about 5.5 percent. NEC Corp, Daiwa Securities, Tokyo Dome, Nippon Sheet Glass, Oji Paper and Yahoo Japan all surged higher by 3.5 to 4 percent.
Hokuetsu Kishu Paper Co. and Daio Paper Corp rallied sharply on reports that Hokutesu will by a 20 percent stake in Daio Paper Corp.
Dai-ichi Life Insurance, Sumitomo Realty, Chubu Electric Power, Sony Corp, Nomura Holdings, Fujitsu, Aozora Bank, Oki Electric Industry, Panasonic Corp, Shinsei Bank, Resona Holdings, J Front Retailing and Kobe Steel also posted sharp gains.
Meanwhile, TDK Corp, Fanuc Corp, Chiyoda Corp, Fast Retailing, Nippon Light Metal, Taiyo Yuden and Isuzu Motors drifted lower.
On the economic front, Japan saw a merchandise trade deficit of 907.25 billion yen in May, the Ministry of Finance said on Wednesday. That was well shy of forecasts for a deficit of 583.0 billion yen following the 520.3 billion yen shortfall in April.
Exports jumped 10.0 percent on year, beating forecasts for an increase of 9.7 percent after rising 7.9 percent in the previous month. Imports climbed an annual 9.3 percent, well above expectations for a rise of 3.3 percent after climbing 8.0 percent a month earlier.
In the currency market, the U.S. dollar traded around the 79 yen-range in early deals in Tokyo. The yen is currently trading at 78.82 to the dollar.
Among other markets in the Asia-Pacific region, Hong Kong, Indonesia, Singapore and South Korea are trading notably higher. Taiwan and Malaysia are up marginally, while Shanghai and New Zealand are trading weak. Markets across the region ended on a mixed note on Tuesday.
On Wall Street, stocks ended with solid gains on Tuesday with traders expressing continued optimism about the likelihood of further stimulus from the Federal Reserve.
The major averages gave back some ground in the latter part of the trading day but still closed firmly in positive territory. The Dow gained 95.5 points or 0.8 percent to 12,837.3, the Nasdaq jumped 34.4 points or 1.2 percent to 2,929.8 and the S&P 500 climbed 13.2 points or 1 percent to 1,358.
Major European markets ended sharply higher on Tuesday. The German DAX index gained 1.8 percent, while the U.K.'s FTSE 100 index and the French CAC 40 index both jumped by 1.7 percent.
U.S. crude oil futures settled higher on Tuesday, ahead of the Federal Reserve Open Committee meeting, with investors anticipating further quantitative easing to be forthcoming this time from the central bank. Prices also found support in some encouraging U.S. housing data and Spain achieving its target at a bond sale auction, albeit at high costs.
Crude for July delivery gained $0.76 or 0.9 percent to close at $84.03 a barrel on the New York Mercantile Exchange.
by RTT Staff Writer
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