Asian Markets Trade Higher Amid Recovery Hopes

8/6/2012 11:58 PM ET

Asian stock markets are trading higher on Tuesday with investors picking up stocks amid easing worries about eurozone debt. Though most of the markets in the region were subdued early on, the mood changed a bit positive subsequently amid hopes the governments in the U.S. and Europe will soon start announcing some stimulus to boost economic growth.

The Australian stock market is trading modestly higher with investors mostly treading cautiously ahead of the central bank's interest rate decision.

The Reserve Bank of Australia will conclude its monetary policy meeting and announce its decision on interest rates during the course of the day. The central bank is widely expected to keep rates on hold at the current level of 3.50 percent.

Mining and energy stocks are mostly trading higher. Healthcare stocks are drifting lower, while financial, consumer discretionary and industrial stocks are trading mixed.

The benchmark S&P/ASX 200 index is currently up 18.4 points or 0.4 percent at 4,291. The broader All Ordinaries index is trading at 4,309.8, up 16.9 points or 0.4 percent from its previous close.

Among bank stocks, Commonwealth Bank of Australia, National Australia Bank and Westpac (WBK: Quote) are trading modestly higher, while ANZ Bank (ANZ: Quote) is trading slightly weak.

Among top miners, BHP Billiton (BHP: Quote,BBL: Quote) and Rio Tinto (RIO: Quote,RIO.L) are up 0.8 percent and 1.2 percent, respectively.

In the energy sector, Woodside Petroleum, Santos and Caltex Australia are up 0.8 to 1.4 percent, while Oil Search and Origin Energy are trading modestly lower.

Bluescope Steel is trading higher by 5.7 percent. Whitehaven Coal is gaining about 5.5 percent. Oz Minetals, Boart Longyear and Qantas Airways are up 3.2 to 3.8 percent.

Arrium, Sims Metal Management, Ansell, Iluka Resources, Atlas Iron and Beach Energy are all up 2.3 to 3 percent. Aurora Oil & Gas, Toll Holdings, Goodman Group and Monadelphous Group are also up with strong gains.

Leighton Holdings is down 4 percent following an announcement from the company that its net profit for the six months to June 2012 dropped to A$115 million from A$340 million in the previous first half.

Cochlear Limited shares are down more than 4 percent after the company reported a 68 percent decline in full-year profit.

Harvey Norman Holdings is trading lower by 2.4 percent. Fairfax Media, Duet Group, CSL and ResMed Inc (RMD: Quote) are also trading notably lower.

Toll road operator Transurban is also down sharply due to weak earnings results. The company said its full-year net profit was down 51.2 per cent to A$58.6 million, due to a fall in value of one of its roads in the United States.

The Japanese market opened lower with investors indulging in some profit taking after recent strong gains. A slightly subdued close on Wall Street overnight and a lack of fresh triggers too contributed to the negative start.

However, with investors picking up stocks at lower levels, the market swiftly rebounded into positive territory and was trading notably higher when the morning session ended.

The benchmark Nikkei 225 index, which declined to around 8,712 in early trades, was up 52.4 points or 0.6 percent at 8,778.7 at the break.

Maruha Nichiro Holdings Inc. shares jumped more than 9 percent following an announcement from the company that it will buy back shares for about 2 billion yen.

Nitto Boseki moved up nearly 5 percent. JFE Holdings, Nippon Steel, Casio Computer, Sumitomo Osaka Cement, Kirin Holdings, Tokyo Tatemono, Hino Motors, Fuji Heavy Industries and Kansai Electric Power gained 2 to 3 percent.

Olympus Corp, Nippon Soda, Sumitomo Metal Industries, JX Holdings, Japan Tobacco, Japan Steel Works, Inpex Corp, Denso Corp, Fast Retailing, Softbank Corp, Seven & I Holdings, Nissan Motor and GS Yuasa also posted strong gains.

Among the prominent losers in the Nikkei index, Tokai Carbon plunged as much as 18 percent. Teijin, Nippon Sheet Glass, Unitika, Fujitsu, Panasonic Corp. (PC: Quote), Toho Zinc and Nippon Paper Group were down 2 to 4 percent.

Mitsubishi Motors, Resona Holdings, Advantest Corp (ATE: Quote), Taiheiyo Cement, TDK Corp, Mitsumi Electric and Suzuki Motor too traded notably lower.

The Tokyo Stock Exchange suspended trading for all derivatives, including Topix-linked futures and long-term government bond futures, at around 9:20 a.m. due to a computer system failure. The cause of the problem is yet to be identified.

According to data released by the Ministry of Finance, Japan's foreign exchange reserves increased in July. Total reserve assets amounted to $1.273 trillion at the end of July compared to $1.271 trillion at the end of June, the data showed.

At the end of last month, Japan's foreign currency reserves stood at $1.20 trillion, up from June's $1.18 trillion. IMF reserves amounted to $15.55 billion. Special Drawing Rights totaled $19.46 billion and gold reserves stood at $39.91 billion.

The Ministry also said that it did not conduct any foreign exchange intervention operations during April-June 2012 period.

In the currency market, the U.S. dollar hovered around the 78 yen range in early deals in Tokyo. The yen is currently trading at 78.25 to the dollar.

Among other markets in the Asia-Pacific region, Hong Kong, New Zealand, Singapore and South Korea are trading modestly higher. Shanghai, Indonesia and Taiwan are up marginally, while Malaysia is trading slightly weak. Markets across the region had ended on a firm note on Monday.

On Wall Street, stocks gave back ground in the latter part of the trading day on Monday but still ended the session mostly higher after seeing early strength. Positive reaction to last Friday's jobs report and slightly easing worries about eurozone financial situation contributed to the market's upmove.

The Dow edged up 21.3 points or 0.2 percent to 13,117.5, the Nasdaq rose 22 points or 0.7 percent to 2,989.9 and the S&P 500 crept up 3.2 points or 0.2 percent to 1,394.2.

Major European markets too closed higher on Monday. While the U.K.'s FTSE 100 index gained 0.4 percent, the German DAX index and the French CAC 40 index both advanced by 0.8 percent.

U.S. crude oil ended at its highest in more than two weeks on Monday, as commodities continued to make gains following some better-than-expected U.S. jobs data end last week.

Crude for September delivery gained $0.80 or 0.9 percent to close at $92.20 a barrel on the New York Mercantile Exchange.