Asian Market Commentary
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Asian Markets Trade Higher

Asian stock markets are mostly trading higher on Thursday, with investors tracking a positive lead from Wall Street where stocks posted gains overnight amid expectations of fairly strong earnings reports.

The Australian market faltered after a positive start, but rebounded post noon thanks to some strong buying at lower levels. A somewhat disappointing report on building approvals weighed down sentiment to an extent early on in the session.

The benchmark S&P/ASX 200 index, which declined to 4,700.7 after a positive start, is currently up 15.7 points or 0.3 percent at 4,723.8. The broader All Ordinaries index is up 16.4 points or 0.3 percent at 4,746.5, off the day's low of 4,723.1.

Bluescope Steel, Arrium, Commonwealth Property Office Fund and Alumina (AWC) are up 2 to 3.3 percent. Tatts Group, Insurance Australia Group, Myer Holdings and Tabcorp Holdings are trading higher by 1.2 to 1.6 percent.

Beach Energy, Perseus Mining, Atlas Iron, Lynas Corp. and Newcrest Mining are down 2 to 2.8 percent. Iluka Resources, Leighton Holdings, Oil Search, David Jones, Oz Minerals and Treasury Wine Estates are down 1.2 to 1.8 percent.

On the economic front, Australian residential building approvals rose 2.9 percent to 13,307 units in November, according to the data released by the Australian Bureau of Statistics. That was shy of forecasts for an increase of 3.0 percent following the revised 5.2 percent contraction in October (originally 7.6 percent).

On a yearly basis, building permits climbed 13.2 percent, beating forecasts for an 11.6 percent gain after rising 14.5 percent in the previous month.

The seasonally adjusted estimate for private sector dwellings excluding houses jumped 10.1 percent in November following a fall of 15.0 percent in the previous month. The seasonally adjusted estimate of the value of total building approved fell 4.1 percent in November and has fallen in two straight months.

The value of residential building rose 2.7 percent following a fall of 11.4 percent in the previous month. The value of non-residential building fell 14.4 percent following a rise of 21.0 percent in October.

The Japanese stock market opened higher, with the yen's decline against the U.S. dollar and the overnight positive close on Wall Street prompting investors to indulge in some fairly strong buying at several counters.

The benchmark Nikkei 225 index, which opened notably higher, was up 99.2 points or nearly a percent at 10,677.7 at the end of the morning session.

Mazda Motor Corp. gained nearly 10 percent. Isuzu Motors moved up by over 5 percent on media reports that the company would partner with General Motors Co. (GM) to manufacture pickup trucks. Hino Motors, Nissan Motor, Honda Motor (HMC) and Mitsubishi Motors also rose sharply.

Tokyo Electric Power vaulted nearly 13 percent. Toyobo Co., Unitika, T&D Holdings, Tokio Marine Holdings, Kawasaki Kisen Kaisha, JFE Holdings, MS&AD Insurance Group Holdings, Toho Zinc and Nippon Yusen KK moved up by 4 to 6 percent.

Kobe Steel, Mitsui OSK Lines, SMFG, Showa Denko KK, Dai-ichi Life Insurance, Taiyo Yuden, Daikin Industries, Japan Steel Works, Mitsubishi Chemicals, Mizuho Financial Group (MFG) and Panasonic Corp. (PC) gained 3 to 4 percent.

Chiba Bank, Bank of Yokohama, Fujifilm Holdings, Oki Electric Industry, Nippon Soda and Konica Minolta also posted strong gains.

Meanwhile, Asahi Group Holdings, Tokyo Dome, Konami Corp., Tokyo Tatemono, Chubu Electric Power, Sapporo Holdings, Seven & I Holdings and J Front Retailing traded weak, losing 1.2 to 2.2 percent.

In the currency market, the U.S. dollar traded in the lower 88 yen-range in early deals in Tokyo. The yen is currently trading at 88.11 to the dollar. The euro was changing hands at around 115 yen earlier in the day.

Among other markets in the Asia-Pacific region, Shanghai, Hong Kong, South Korea, Singapore and Taiwan are trading notably higher. New Zealand is trading modestly higher, while Indonesia and Malaysia are down marginally.

On Wall Street, stocks ended higher on Wednesday, as investors indulged in some buying amid optimism about corporate earnings.

The major averages closed firmly in positive territory, but well off their best levels of the day. The Dow rose 61.7 points or 0.5 percent to 13,390.5, the Nasdaq advanced 14 points or 0.5 percent to 3,105.8 and the S&P 500 climbed 3.9 points or 0.3 percent to 1.461.

Major European markets too closed on a firm note Wednesday. While the U.K.'s FTSE 100 index gained 0.7 percent, the French CAC 40 index and the German DAX index both closed up 0.3 percent.

U.S. crude oil settled lower on Wednesday following a U.S. oil inventory report showing an increase in petroleum products stockpile. Crude for February delivery ended down five cents at $93.10 a barrel on the New York Mercantile Exchange.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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