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Asian Markets Extend Gains

Asian stock markets are mostly trading higher for a third straight day on Friday, tracking the cues from Wall Street where the major averages extended gains overnight as fears about the U.S. Federal Reserve cutting back on its monetary easing program receded.

The Australian stock market is trading higher for the third straight session. However, gains are not much pronounced as mining stocks were weighed down by lower metal prices.

Financial and healthcare stocks are trading modestly higher, while energy stocks are trading mixed. Mining, consumer discretionary, utilities and industrial stocks are trading in negative territory.

The benchmark S&P/ASX 200 index is adding 15.80 points or 0.33 percent to 4,827.00 and the broader All Ordinaries index is up 11.70 points or 0.24 percent at 4,796.5.

Among bank stocks, ANZ Bank is up 0.77 percent, Commonwealth Bank of Australia is adding 0.19 percent, National Australia Bank is advancing 0.4 percent and Westpac (WBK) is gaining 0.21 percent.

In the mining sector, BHP Billiton (BHP) is down 0.92 percent, while Rio Tinto (RIO) is gaining 0.14 percent. Gold miner Newcrest Mining is trading lower by more than 2 percent respectively and peer Kingsgate is down more than 3 percent following lower gold prices overnight.

In the energy sector, Woodside Petroleum is up 1.9 percent, while Origin Energy is down 0.4 percent and Caltex Australia is down more than 11 percent.

Caltex forecast a net profit of A$160 million to A$175 million for the six-month period to June 30, down from A$197 million in the year-ago period. The oil refiner and distributor blamed the falling Australian dollar and a pipeline outage for the lower earnings.

Meanwhile, Santos is advancing 0.89 percent and Oil Search is up 0.13 percent. Santos said it will scale back its coal seam gas exploration in New South Wales and will instead seek approval for 18 core and pilot wells in the Pilliga State Forest at Narrabi.

Suncorp will refund A$23 million to customers after the Australian Securities and Investment Commission found that the insurance company failed to pass on promoted discounts to customers. The company has agreed to further improve its compliance systems to ensure IT systems, documentation and human resources operated together better.

Engineering company Downer EDI and consortium partner GE Australia have won a contract to build the first stage of the A$350 million Boco Rock Wind Farm in NSW's Snowy Mountains. Downer EDI's stock is adding 0.55 percent.

On the economic front, Australia will release May data for private sector credit, with forecasts suggesting an increase of 0.3 percent on month and 2.9 percent on year following the 0.3 percent monthly gain and the 3.1 percent annual expansion in the previous month.

In the currency market, the Australian dollar opened lower against the U.S. dollar on Friday following a fall in precious metal prices and mixed economic data showing the U.S. is growing at a moderate pace. In early trades, the local unit was quoting at US$0.9276, down from Wednesday's close of US$0.9317.

The Japanese market opened on a firm note, as a raft of upbeat economic data and a weaker yen triggered some strong buying in several stocks from across various sectors.

In late-morning trades, the benchmark Nikkei 225 index is advancing 289 points or 2.19 percent at 13,502.58.

Japan Tobacco is gaining more than 3 percent, while JFE Holdings and Casio Computer are adding more than 4 percent each. Mitsui Chemicals is up 4.7 percent and Nisshin Steel is advancing 5.8 percent.

Renesas Electronics Corp. is adding more than 4.2 percent after the chip maker said it will end its money-losing system LSI chip business for mobile phones.

Sharp Corp. is rising more than 8 percent after the company said Thursday evening that it plans to tie up with a Chinese consumer electronics company to make energy-saving LCD panels in China.

Among the other top gainers, Mitsubishi Estate Co. and Tokyu Land Corp. are advancing more than 5 percent, while Tokyo Tatemono Co. is gaining 4.5 percent. Sumitomo Realty & Development Co., Alps Electric Co. and Mitsui Fudosan are adding more than 4 percent each.

Meanwhile, Dainippon Sumitomo is down 1.7 percent and Amuda Co. is losing more than 1 percent. Marubeni Corp, Kansai Electric, Mitsubishi Electric, Kajima Corp. are all trading lower in a range of 0.3 percent to 0.6 percent.

On the economic front, industrial production in Japan climbed a seasonally adjusted 2.0 percent in May compared to the previous month, the Ministry of Economy, Trade and Industry said on Friday - expanding for the fourth straight month. That beat forecasts for an increase of 0.2 percent following the 0.9 percent gain in April.

On a yearly basis, industrial production shed 1.0 percent - also exceeding expectations for a contraction of 2.4 percent following the 3.4 percent decline in the previous month.

Meanwhile, the overall national inflation rate in Japan came in at -0.3 percent in May, the Ministry of Internal Affairs and Communications said. That beat forecasts for -0.4 percent after showing -0.7 percent in April. Core CPI, which strips out the volatile costs of food, was flat on year - matching forecasts after coming in at -0.4 percent in the previous month.

Retail sales in Japan gained a seasonally adjusted 1.5 percent on month in May, the Ministry of Economy, Trade and Industry said, standing at 11.479 trillion yen. That beat forecasts for a gain of 0.7 percent following the revised 0.6 percent increase in April. On a yearly basis, retail sales were up 0.8 percent - also topping expectations for a flat reading following the 0.1 percent contraction in the previous month.

The average household spending in Japan was down 1.6 percent on year in May, the Ministry of Internal Affairs and Communications said, standing at 282,366 yen. That missed forecasts for an increase of 1.3 percent following the 1.5 percent gain in April.

The average of monthly income per household stood at 422,724 yen, up 1.5 percent on year. The average of consumption expenditures per household was 307,926 yen, up 1.4 percent on year.

The unemployment rate in Japan came in at a seasonally adjusted 4.1 percent in May, the Ministry of Internal Affairs and Communications said. That was unchanged from the April reading but missed forecasts for 4.0 percent. The job-to-applicant ration was 0.90 - matching forecasts and up from 0.89 in the previous month. The participation rate was 59.7 percent, up 0.2 percent on year.

In the currency market, the U.S. dollar traded in the mid 98 yen-level in early deals in Tokyo. In late-morning trades, the dollar is trading in a range of 98.58-98.62 yen, up 0.40 yen from Thursday's close of 98.18-98.19 yen in Tokyo.

Among other markets in the Asia-Pacific region, South Korea, Hong Kong, Shanghai, Indonesia, Malaysia, New Zealand, Singapore and Taiwan are all trading in positive territory.

On Wall Street, stocks saw some further upside during trading on Thursday after moving mostly higher over the course of the two previous sessions. The markets benefited from a positive reaction to the latest batch of U.S. economic data, which was perceived as showing upbeat signs for the economy but not at a strong enough level to raise concerns about the Fed's stimulus program.

The major averages moved roughly sideways going into the close, hovering firmly in positive territory. The Dow ended the day up 114.35 points or 0.8 percent at 15,024.49, the Nasdaq climbed 25.64 points or 0.8 percent to 3,401.86 and the S&P 500 advanced 9.94 points or 0.6 percent to 1,613.20.

The major European markets also moved to the upside over the course of the session on Thursday. While the U.K.'s FTSE 100 Index advanced by 1.3 percent, the French CAC 40 Index climbed by 1 percent and the German DAX Index rose by 0.6 percent.

U.S. crude oil settled sharply higher for a fourth straight session Thursday, on a slew of upbeat economic data out of the U.S. with pending home sales in May rising more than expected and initial jobless claims dipping in line with expectations.

Crude oil for August delivery, the most actively traded contract, jumped $1.55 or 1.6 percent to close at $97.05 a barrel on the New York Mercantile Exchange.

by RTTNews Staff Writer

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