Asian Market Commentary
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Asian Markets Trade Higher On Wall Street Cues

Asian stock markets are mostly trading notably higher on Thursday, with investors picking up stocks, buoyed by a strong close on Wall Street on the back of some upbeat economic data. Some encouraging earnings reports from the region too appear to be lifting sentiment to a notable extent.

In the Australian market, consumer staples, financial, energy and healthcare stocks are among the prominent gainers. Mining, industrial and information technology stocks are also mostly trading higher.

The benchmark S&P/ASX 200 index, which rose to 5,085.6 in early trades, is currently up 37.8 points or 0.7 percent at 5,074.4. The broader All Ordinaries index is up 37.9 points or 0.7 percent at 5,091, slightly off the day's high of 5,100.6.

Treasury Wine Estates is trading higher by about 5.5 percent after reporting first-half net profit of A$52.3 million, up 30.8 percent from the prior corresponding period. Woolworths is up 1.5 percent after the company said its first-half net profit rose 19 percent to A$1.15 billion.

Aurora Oil & Gas is up nearly 5 percent and Harvey Norman Holdings is trading higher by 4.4 percent. Boral, James Hardie Industries, Iluka Resources, Qantas Airways, David Jones, Woodside Petroleum, Alumina (AWC) and News Corp. are up 2 to 3 percent. Carsales.Com, Fairfax Media and Fortescue Metals are also trading sharply higher.

Meanwhile, Perseus Mining, Insurance Australia Group, Oz Minerals, Regis Resources and Whitehaven Coal are down 2 to 4 percent. Spark Infrastructure Group is trading lower by 1.8 percent.

In economic news, overall private sector credit in Australia increased in January by 0.2 percent from December, the Reserve Bank of Australia reported Thursday. Total private sector credit had risen 0.4 percent on month in December.

For the year to January, overall credit rose 3.6 percent. The RBA said credit extended to housing-related customers was up 0.4 percent on month in January. The amount of credit extended to businesses was unchanged.

According to data released by the Australian Bureau of Statistics, total new capital expenditure in Australia was down a seasonally adjusted 1.2 percent at A$40.988 billion in the fourth quarter of 2012, compared to the previous three months. That missed forecasts for an increase of 1.0 percent following the 2.8 percent increase in the third quarter. On year, capex was up 10.0 percent.

The seasonally adjusted volume estimate for buildings and structures fell 0.6 percent on quarter in Q4 to A$25.78 billion. It was up 14.2 percent on year. The seasonally adjusted volume estimate for equipment, plant and machinery rose fell 2.3 percent to A$15.21 billion. It was up 3.5 percent on year.

In the currency market, the Australian dollar edged higher against the U.S. dollar and was quoting at US$1.0235 in early trades, up from Wednesday's close of US$1.0216.

The Japanese stock market rose sharply, with investors indulging in some hectic buying almost across the board. Besides a strong lead from Wall Street, hopes of further monetary easing by the Bank of Japan contributed to the upmove.

Automobile, financial, pharmaceuticals, real estate, chemicals, non-ferrous metals and textiles posted strong gains.

The benchmark Nikkei 225 index, which spurted to 11,492.8, was up 208.7 points or 1.9 percent at 11,462.6 at the end of the morning session.

Mitsubishi Logistics Corp. and Tokyo Tatemono moved up by over 6 percent. Komatsu Ltd. shares jumped 5.5, thanks to better than expected results. Tokyo Dome Corp., Toshiba Corp. and Sumitomo Electric Industries gained more than 5 percent.

Mitsui Engineering & Shipbuilding, Nippon Sheet Glass, Hitachi Zosen, Fuji Heavy Industries, Sumitomo Realty & Development, Showa Denko KK, Yokohama Rubber, Canon Inc. (CAJ), Sony Corp. (SNE) and Konica Minolta Holdings all moved up by over 3 percent.

Advantest Corp. (ATE), Sumitomo Heavy Industries, SMFG, Fast Retailing, Nippon Soda, Daiichi Sankyo and Hitachi Construction Machinery also rose sharply. Automobile stocks Toyota Motor (TM), Honda Motor (HMC), Isuzu Motors and Mazda Motor gained over 3 percent.

Among the few losers in the Nikkei index, Tokuyama Corp. declined 1.6 percent and Kubota Corp. was down 1.2 percent. Fujitsu, Aozora Bank and Shimizu Corp. were the other notable losers.

On the economic front, industrial production in Japan was up a seasonally adjusted 1.0 percent on month in January, the Ministry of economy, Trade and Industry said in Thursday's preliminary reading. That missed forecasts for an increase of 1.5 percent following the 2.4 percent gain in December.

On a yearly basis, industrial production was down 5.1 percent - also missing expectations for a decline of 4.9 percent following the 7.9 percent contraction in the previous month.

Upon the release of the data, the METI upgraded its assessment of industrial production, saying: "Industrial production has bottomed out and shows some signs of picking up."

In the currency market, the U.S. dollar traded in the lower 92 yen level in early deals in Tokyo. The yen is currently trading at 92.40 to the dollar.

Among other markets in the Asia-Pacific region, Hong Kong, Indonesia, New Zealand, South Korea and Shanghai are trading notably higher. Malaysia and Singapore are up with modest gains.

On Wall Street, stocks ended notably higher on Wednesday, buoyed by some upbeat data on durables goods sales orders and pending homes sales.

The Dow surged up 175.2 points or 1.3 percent to 14,075.4, its best closing level in over five years. The Nasdaq climbed 32.6 points or 1 percent to 3,162.3 and the S&P 500 jumped 19.1 points or 1.3 percent to 1,516.

Major European markets too ended on a high note Wednesday. While the French CAC 40 index surged up by 1.9 percent, the German DAX index and the U.K.'s FTSE 100 index jumped 1 percent and 0.9 percent, respectively.

U.S. crude oil settled marginally higher on Wednesday on some upbeat macroeconomic data from the U.S. and Europe. Crude for April delivery ended up $0.13 or 0.1 percent at $92.76 a barrel on the New York Mercantile Exchange.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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