Asian stock markets are trading higher on Wednesday with investors mostly tracking cues from the U.S. and European markets, where stocks posted gains overnight amid hopes of further stimulus. However, some of the markets in the region have given up some early gains due to stiff resistance at higher levels amid release of some regional economic data.
The Australian stock market is trading firm with investors indulging in some strong buying in several front line stocks from across various sectors. Besides strong global cues, a better than expected report on Australian services sector activity is also contributing to the buoyant mood in the market.
The benchmark S&P/ASX 200 index is up 37 points or 0.9 percent at 4,164.2. The broader All Ordinaries index is trading at 4,204.6, up 38.2 points or 0.9 percent from its previous close.
Mining stocks are moving higher on strong buying support. Industrial, consumer staples and information technology stocks are also trading firm, while financial and healthcare stocks are trading mixed.
Energy stocks are up sharply following the owners of the Australia Pacific liquefied natural gas project in Queensland making a final commitment to the A$23 billion project.
Origin Energy said the company and its joint venture partners ConocoPhillips as well as China Petrochemical Corp have approved a final investment decision on the second of two development stages of the project.
Origin Energy shares are up more than 4.5 percent. Woodside Petroleum, Santos and Oil Search are up 2 to 2.5 percent, while Caltex Australia is trading higher by about 1.8 percent.
Top miners BHP Billiton, Rio Tinto, Fortescue Metals and Newcrest Mining are all trading in positive territory with notable gains.
Among bank stocks, Commonwealth Bank of Australia and National Australia Bank are up 0.6 percent and 0.9 percent, respectively. ANZ Bank and Westpac are trading marginally down.
Beach Energy is up with a gain of 5.8 percent. Oz Minerals is trading higher by 4.8 percent. Boral and Regis Resources are up 4.2 percent and 4 percent respectively.
Arrium, Aurora Oil & Gas, Boart Longyear and Iluka Resources are up 3 to 4 percent. Sims Metal Management, Perseus Mining and WorleyParsons are also trading sharply higher.
On the economic front, the Australian Industry Group said that the index measuring the service sector in Australia came in with a score of 48.8 in June, sharply higher than the May reading of 43.5. Among the individual sub-categories, recreation, health, community service and transportation all saw expansion, while retail trade, wholesale trade and accommodations saw contraction.
According to data released by the Australian Bureau of Statistics, Australian retail spending rose 0.5 percent in May to a seasonally adjusted A$21.307 billion, compared to a downwardly revised A$21.199 billion in April.
Stocks surged higher in the Japanese market on Wednesday with investors indulging in some brisk buying, betting on hopes of further stimulus from global central banks. A weaker yen and some encouraging economic data from the U.S. also contributed to the buoyant start.
However, after a strong initial upmove, the market pared some gains with a section of investors choosing to take some profits.
The benchmark Nikkei 225 index, which hit a near 2-month high as it rose to 9,136 in early trades, was up 36.1 points or 0.4 percent at 9,102.7 when the morning session ended.
Oil, mining, chemicals and non-ferrous metals stocks opened on a firm note and mostly held on to their gains. Pharmaceuticals, foods, automobile and financial stocks traded mixed.
Sumco Corp, Sumitomo Heavy Industries, Inpex Corp and Chiyoda Corp gained 3 to 4 percent. Nitto Boseki, Taiyo Yuden, Tokyo Electron, NGK Insulators and Mitsui & Co, all moved up by over 2 percent.
Komatsu, Fuji Heavy Industries, Sumitomo Metal Mining, IHI Corp, Mitsubishi Corp, Nissan Chemical Industries, GS Yuasa, Fuji Electric, Bridgestone Corp and Sumitomo Heavy Industries too posted strong gains.
JFE Holdings Inc shares tumbled nearly 4 percent. Ajinomoto Co Inc. lost more than 2 percent. Sharp Corp, Asahi Group Holdings, Japan Tobacco, Kansai Electric Power, Resona Holdings and Sony Corp drifted down by 1 to 2 percent.
Nippon Yusen KK, Mitsubishi Motors, Casio Computer, Tokyo Electric Power, TDK Corp and Hitachi Zosen were also down with notable losses at the break.
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 79.68 to the dollar.
Among other markets in the Asia-Pacific region, Indonesia and New Zealand are trading notably higher. Singapore, South Korea, Malaysia, Hong Kong and Shanghai are up with modest gains, while Taiwan is trading marginally down.
On Wall Street, stocks moved mostly higher on Tuesday, after initially showing a lack of direction. The markets benefited from an upbeat report on factory orders as well as strong commodities prices. Nonetheless, trading activity remained relatively subdued, with traders looking to get a head start on the Independence Day holiday on Wednesday.
The major averages saw some volatility in the final hour of trading but closed firmly in positive territory. The Dow rose 72.4 points or 0.6 percent to 12,943.8, the Nasdaq advanced 24.9 points or 0.8 percent to 2,976.1 and the S&P 500 climbed 8.5 points or 0.6 percent to 1,374.
Major European markets also ended on a firm note on Tuesday. While the U.K.'s FTSE 100 index gained 0.8 percent, the French CAC 40 index and the German DAX index jumped by 1 percent and 1.3 percent, respectively.
U.S. crude oil futures ended at six-week high on Tuesday on supply concerns, as Iran stepped up its rhetoric over the Strait of Hormuz while continuing its missile drills in the area.
Oil prices were also helped by increased risk-taking sentiment, with investors anticipating additional stimulus measures to help boost growth from the European Central Bank and other central banks. Crude for August delivery jumped $3.91 or 4.7 percent to close at $87.66 a barrel on the New York Mercantile Exchange.
by RTT Staff Writer
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