Asian stock markets are trading firm on Monday with investors tracking strong cues from the U.S. and European markets where stocks vaulted higher on Friday on easing worries about the financial situation in Europe. Though most of the markets in the region started on a rousing note, some of them pared a portion of their early gains due to lack of support at higher levels.
In the Australian market, mining, energy, financial and industrial stocks are mostly up with impressive gains. Property trusts and consumer staples stocks are also trading firm.
The benchmark S&P/ASX 200 index, which rose to 4,151,5 earlier in the day, is currently trading at 4,143, up 48.4 points or 1.2 percent from its previous close. The broader All Ordinaries index is up 46.5 points or 1.1 percent at 4,182, slightly off the day's high of 4,189.9.
Key bank stocks ANZ Bank, Commonwealth Bank of Australia, National Australia Bank and Westpac are all trading higher by 1 to 2 percent.
Top miners BHP Billiton, Rio Tinto and Newcrest Mining, and energy stocks Woodside Petroleum and Santos are trading higher by 1.5 to 2.8 percent.
Bluescope Steel is up nearly 7 percent. Regis Resources is trading higher by over 5 percent. Challenger, Downer EDI, Boart Longyear and Alumina are up 4.5 to 5 percent.
Atlas Iron, Campbell Brothers, Goodman Group, Westfield Retail Trust, Lynas Corporation, Panaust, Macquarie Group and Leighton Holdings are also trading sharply higher.
Lend Lease shares are up 4.5 percent after the company said it expects to post a modest rise in operating profit for its 2011-2012 financial year.
Aristocrat Leisure shares plunged more than 10 percent after the company said its first-half net profit would likely be up by up to one third and the company will deliver strong earnings growth for the full year.
David Jones shares are trading lower by over 5 percent as doubts emerged about an unsolicited takeover bid by little known British group EB Private Equity.
On the economic front, an index measuring manufacturing conditions in Australia came in with a score of 47.2 in June, the Australian Industry Group said on Monday - remaining below the boom-or-bust level of 50 for the fourth consecutive month.
The index was up sharply from the 42.4 reading in May, however, following improvements in the clothing, paper, printing, transportation and technology sectors. The index of production jumped to 47.5 in June from 38.7 in May, while the employment index climbed to 48.8 from 43.0 and the index for new orders rose to 46.2 from 40.6.
Meanwhile, Australia's rate of inflation fell to its lowest level since the global financial crisis, according to a survey. The TD-Securities-Melbourne Institute Monthly inflation gauge shows the annual inflation rate fell to 1.6 per cent in the 12 months to June 2012, the slowest pace since 2009. Prices fell 0.2 per cent during the month of June after remaining flat in May, according to the survey.
Buoyed by a strong lead from the U.S. and European markets and on an encouraging Tankan report, the Japanese market opened on a rousing note on Monday. However, with investors turning cautious at higher levels, the market pared most of its gains subsequently and was up just marginally above the unchanged line when the morning session ended.
Financial, automobile, marine transport, precision instruments and non-ferrous metals stocks started off on a high note, but pared some gains soon thereafter.
Railway, foods and pharmaceuticals stocks traded weak. Electric power, communications and chemicals stocks exhibited a mixed trend.
The benchmark Nikkei 225 index, which rose to 9,103.8, was up 14.1 points or 0.2 percent at 9,020.9 at the end of the morning session.
Among the prominent gainers in the Nikkei index, Sumitomo Heavy Industries, Nippon Yusen KK and Showa Denko KK were up 3.3 to 3.5 percent at the break.
Fujikura was up nearly 3 percent. Mitsui Mining was trading higher by around 2.9 percent, while Dainippon Screen Manufacturing, GS Yuasa Corp, Sumitomo Chemicals, Mitsui OSK Lines and IHI Corp were up 2.3 to 2.6 percent.
Mitsui Chemicals, NEC Corp, Unitika, Mitsui Mining & Smelting, Toho Zinc, TDK Corp, Pioneer Corp, IHI Corp, JX Holdings, Nomura Holdings, Asahi Glass, Fujifilm Holdings, Nissan Motor, Pacific Metals, Mitsubishi Electric and Mitsubishi UFJ Financial Group were also up with notable gains.
Meanwhile, Nisshin Steel, Heiwa Real Estate, Nippon Paper Group, Tokyo Electric Power, All Nippon Airways, Mitsubishi Motors, Bank of Yokohama, NTT Data Corp and Sumitomo Osaka Cement drifted lower and lost 1 to 3 percent.
On the economic front, the Tankan survey revealed that large Japanese companies were less pessimistic about business conditions in the three months to June. The large manufacturers' business sentiment index improved to - 1 in June, the tankan showed, compared with - 4 in the previous March survey. That was better than a foreast for a -3 reading.
In the currency market, the U.S. dollar traded in the upper 79 yen range in early deals in Tokyo. The yen is currently trading at 79.78 to the dollar.
Among other markets in the Asia-Pacific region, Indonesia, New Zealand and Taiwan are trading notably higher. Malaysia, Singapore and South Korea are up with modest gains, while Shanghai is down marginally.
On Wall Street, stocks ended notably higher on Friday, extending the strong upward move seen late in the previous session. Much of the strength on Wall Street stemmed from a positive reaction to the latest developments in Europe.
The Dow jumped 277.8 points or 2.2 percent to 12,880.1, the Nasdaq soared 85.6 points or 3 percent to 2,935.1 and the S&P 500 surged up 33.1 points or 2.5 percent to 1,362.2.
Major European markets too ended sharply higher on Friday. The U.K.'s FTSE 100 index jumped 1.4 percent, while the German DAX index and the French CAC 40 index soared 4.3 percent and 4.8 percent, respectively.
U.S. crude oil futures jumped to settle at a three-week high on Friday, on news of a deal at the European leaders summit meeting where the European Union will take urgent action to help stabilize the Spanish and Italian bond markets and the ailing eurozone banking sector.
Crude for August delivery surged $7.27 or 9.4 percent to close at $84.96 a barrel on the New York Mercantile Exchange.
by RTT Staff Writer
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