Asian stocks rose on Tuesday on expectations that major central banks, including the European Central Bank and the Bank of Japan, may ease monetary policy this month.
With employment deteriorating in Europe, the ECB is largely expected to cut interest rates at a rate-setting meeting slated for Thursday, while the Bank of England may announce an increase in its bond-buying program to help stimulate the ailing economy. There are mixed views about whether the Bank of Japan would ease its policy further in a quarterly review next week.
As for the United States, weak manufacturing data released overnight served to ramp up expectations of Fed action to prevent the real economy from sliding into another recession.
Tokyo stocks rose, with the Nikkei average rising 0.7 percent to hit a two-month closing high amid speculation the Federal Reserve may introduce another round of bond purchases, known as quantitative easing. The broader Topix index added a percent. Banks led the gainers, with Summitomo Mitsui Financial Group Mitsubishi UFJ Financial Group and Resona Holdings climbing about 2-3 percent.
Heavyweight Fast Retailing dropped 1.5 percent as it reported a seven percent decline in same-store sales in June, hit by weak sales of summer clothing. All Nippon Airways plunged almost 14 percent on a report that it plans to raise a record 200 billion yen through the issue of as many as one billion new common shares. Likewise, shipping line Kawasaki Kisen Kaisha slumped nearly 15 percent after unveiling plans to raise as much as 28.6 billion yen via a share sale to invest in new vessels.
China's Shanghai Composite index rose a modest 0.1 percent in thin trading, led by property developers after a survey by a local data provider showed an unexpected turnaround in China's somewhat struggling real-estate market after nine months of subdued trend. The China Securities Journal, published by the official Xinhua News Agency, said in a front-page commentary that a cut to the bank reserve requirement ratio, currently at 20 percent, would help boost liquidity and stabilize growth.
Hong Kong's Hang Seng index climbed 1.5 percent to a seven-week high, playing catch up to regional gains yesterday, when the local market was closed for a public holiday.
Australian stocks ended slightly lower, as weak manufacturing data globally spurred some profit taking after four days of gains. The benchmark S&P/ASX 200 swung between gains and losses before ending 0.14 percent lower at 4,127, while the broader All Ordinaries index shed 0.15 percent.
The big four banks ended mostly lower after the Reserve Bank of India left interest rates steady as widely expected, citing stronger economic data since the June decision and improving labor market conditions. ANZ and Commonwealth slid about 0.4 percent each and NAB edged down 0.3 percent, while Westpac rose 0.4 percent.
Global miner BHP Billiton rose a modest 0.3 percent and rival Rio Tinto gained 1.6 percent, but gold miner Newcrest ended subdued. Rio Tinto Chief Executive Tom Albanese has told employees that the miner plans to cut support and services costs by 10 percent globally, the Australian Financial Review reported today, citing a company wide email from the CEO.
Energy stocks fell as crude futures fell overnight following weak manufacturing data from global economies. Woodside Petroleum fell 1.8 percent, Santos lost 1.9 percent and Oil Search slipped 0.2 percent.
South Korea's Kospi average ended 0.9 percent higher, with expectations that central banks across the globe will implement additional stimulus measures underpinning sentiment. Battered energy stocks and shipbuilders led the gainers, while heavyweight Samsung Electronics ended little changed after a U.S. court rejected the company's request to lift an order barring sales of its Galaxy Tab 10.1 tablet computer in the U.S. Hyundai Motor, South Korea's largest automaker, lost 1.7 percent and its affiliate Kia Motor fell 2.4 percent after both saw their first-half sales declining in the domestic market on a year-over-year basis.
New Zealand shares rose modestly, in tandem with a firming trend across Asia. Fletcher Building rose 2.3 percent to a two-week high after the nation's largest construction firm said it had sold its metals distribution businesses for $70 million. On Friday, it announced the closure of the Valencia Formica plant in Spain. The benchmark NZX-50 index closed up 0.1 percent at 3,445.
Rural services firm PGG Wrightson rallied 3.3 percent despite data which showed prices of New Zealand's mainly farm-based commodities fell to the lowest level since March 2010 last month. Heartland New Zealand, the would-be bank, paced the decliners on the exchange, tumbling 3.9 percent, while carpet maker Cavalier fell 2.5 percent, oil refiner NZ Refining lost 2.1 percent and heavyweight Telecom slid 0.8 percent.
Elsewhere, India's benchmark Sensex was last trading up 0.1 percent, Indonesia's Jakarta Composite index rose 1.5 percent, Malaysia's KLSE Composite edged up 0.4 percent, Singapore's Straits Times index advanced 1.2 percent and the Taiwan Weighted average added a percent.
On Wall Street, stocks showed a lack of direction before ending on a mixed note overnight, with light trading activity ahead of the Independence holiday on Wednesday and data showing shrinking manufacturing activity in June for the first time in nearly three years contributing to the lackluster performance. The Dow edged down 0.1 percent, while the tech-heavy Nasdaq rose 0.6 percent and the S&P 500 added 0.3 percent.
by RTT Staff Writer
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