Asian markets ends mixed

Sensex, Shanghai gave up yesterday's gains while Hang Seng, Nikkei manages to remain in positives
Stock market in Asian region closed mixed on Thursday, 11 June 2009, as investors weighed the impact of higher oil prices and commodities on inflation and an economic recovery. Profit taking after recent gains and negative cues from Wall Street overnight also affected investor sentiment.
On Wall Street, the stock markets pared losses into the close Wednesday, recovering after a somewhat disappointing Treasury auction and the Federal Reserve's regional look at the economy after oil futures closed above $71 a barrel. The Dow Jones Industrial Average gave up 24.04 points, or 0.3%, to 8739.02, while the S&P 500 was off by 3.28 points, or 0.4%, to 939.15. The Nasdaq fell 7.05 points, or 0.4%, to 1853.08.
On the economic front, the Federal Reserve released its beige book, a report on 12 of its district banks. Economic conditions remained weak or further deteriorated during the period from mid-April through May, according to the report.
However, five of the Districts noted that the downward trend is showing signs of moderating, it said. Further, contacts from several Districts said that their expectations have improved, though they do not see a substantial increase in economic activity through the end of the year.
In the commodity market, crude oil rose for a third day, climbing above $72 a barrel after China’s net imports jumped to a 14-month high in May and a government report showed U.S. crude and gasoline stockpiles unexpectedly fell.
According to data released by customs on its Web site, China, the world’s second-biggest energy user increased its net crude purchases to 16.62 million metric tons, or 3.9 million barrels a day. Crude oil was also supported by a 4.38 million barrel drop in U.S. stockpiles.
Crude oil for July delivery gained as much as 85 cents, or 1.2%, to $72.18 a barrel in after-hours electronic trading on the New York Mercantile Exchange and was at $72.10 at 4:18 p.m. Sydney time. Yesterday, the contract rose $1.32, or 1.9%, to close at $71.33, the highest settlement since 20 October 2009.
Brent crude for July delivery rose as much as 75 cents, or 1.1%, to $71.55 on London’s ICE Futures Europe exchange. The contract was at $71.50 a barrel at 4:12 p.m. in Sydney. Yesterday, it settled at $70.80, the highest since 20 October 2009.
Gold climbed as crude oil advanced for a third day and the dollar declined, increasing the appeal of the precious metal as an alternative investment. Silver also gained. Gold for immediate delivery gained as much as $3.26, or 0.3%, to $957.75 an ounce and was at $956.85 at 1:57 p.m. in Singapore.
In the currency market, US dollar continued to engage in range trading against major currencies with some choppy movements. Not much guidance is provided from stocks as Dow rebounded strongly in late session after earlier sell off and is still staying in range above 8600 levels.
Diversification talk continues to be a key factor in driving the dollar but markets are reassessing recent news. Russia and Brazil announced plans to buy $20b of IMF bonds after China said they'll buy $50b.
Nikkei breached 10000 levels to 10022 in Asia but closed slightly lower at 9981. While crude oil continues its rally and breached 72 levels briefly, Gold is lagging behind and stays below 960 level.
The Japanese yen strengthened against greenback, while the yen edged down against the European currency, the British pound, and the Swiss francon Thursday. The Japanese currency quoted at 98.01 against greenback.
The Hong Kong dollar was trading at HK$ 7.7513 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.
In Sydney trade, the Australian dollar advanced against the greenback on Thursday, following the release of Australian Bureau of Statistics report showing the nation’s jobless rate rose to 5.7% in May. The Aussie was quoted at 80.87 cents against the greenback.
The New Zealand dollar rose today after the Reserve Bank left the official cash rate unchanged. The RBNZ left the official cash rate unchanged at 2.5 percent and left the door open to lower rates, but the talk of "green shoots" here and offshore had traders thinking about rate rises.
The NZ dollar rose to US63.72c at 5pm, from US63.10c at the same time yesterday. The currency was around US62.60c just before the statement and quickly moved to US63c then kept on posting gains as the day went on.
The South Korean won ended at 1,253 won against the dollar, down 6.30 won from Wednesday's close.
The Taiwan dollar weakened after registering consecutive gain in last two sessions. The Taiwan dollar fell against the US dollar as it was trading lower at NT$ 32.7370, up by NT$ 0.180 from Tuesday’s close of NT$32.715.
Coming back in equities, Asian share markets ended mixed as investors weighed higher oil prices and a host of fresh economic data out of China that pointed to continuing fast growth in fixed-asset investment.
In Japan, the stock index finished the session below the line, as investor prompted for profit booking after hitting the psychologically important 10,000 line for the first time in eight months, thanks largely to renewed interest in automakers, electronics firms and other exporters.
The Nikkei 225 Stock Average index tumbled 10.16 points, or 0.1%, to 9,981.33, while the broader Topix index added 3.64 points, or 0.4% to 941.
On the economic front, Japan’s Cabinet Office said in a revised statement that Japan’s gross domestic product fell at an annual pace of 14.2% in the January-March period. A preliminary report last month had said GDP shrank at an annualized rate of 15.2%. On a quarterly basis, GDP fell a revised 3.8% from the previous three-month period.
In Mainland China, stock market finished volatile session lower, snapping three days of winning streak, after hitting a 10-month intraday high, as investor prompted for cashed in profit amid worries about liquidity after the regulator is ready to end a de facto suspension of initial public offerings on the Shanghai and Shenzhen stock exchanges.
The Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, tumbled 0.7%, or 18.92 points, to 2,797.32, meanwhile the Shenzhen Component Index dropped 1.12%, or 120.83 points, to 10,699.91.
On the economic front, the General Administration of Customs said China’s exports and imports shrank for the seventh month in row in May. The trade surplus was $13.39 billion. Exports fell 26.4 % in May from the same period a year ago to $88.758 billion. Imports were down 25.2 % to 75.36 billion U.S. dollars.
The combined foreign trade in May was worth $164.13 billion, down 25.9% year on year, and down 3.1 % from April. Exports in the five months to May totaled $426.14 billion, down 21.8%, and imports went down 28% to $337.34 billion over the same period.
National Bureau of Statistics announced China’s urban fixed-asset investment in the first five months rose 32.9% year on year to 5.352 trillion Yuan. The growth rate was 2.4%age points higher than that of the first four months.
In other economic news, China's consumer price index (CPI), the major gauge of inflation, decreased 1.4% year on year in May. According to statistics released by the National Bureau of Statistics (NBS) the CPI fell 1.5% from a year earlier in urban regions, while the CPI in rural areas dipped 1%.
NBS said that food prices edged down 0.6% in May, while prices in non-food sectors slid 1.7%. The price of meat dropped 15.5% year on year, while pork was down 32%. The price of edible oil dived 23.1% from a year earlier. There was a 0.9% increase in the price of aquatic products, a 5% increase in the price of grain, and a 22.2% surge in the price of vegetables.
The price of consumer products dropped 1.4% year on year, while that of services sank 1.3% from a year earlier. China's CPI fell 0.3% in May compared with April. There was a 0.6% decrease in food prices and a 0.3% decline in housing prices.
In Hong Kong, the stock market finished above the line, enduring gains for second consecutive day, with gains in banks and financials and resource related stocks amid firmer commodity prices and after strong investment data from China, offset declines by properties and energy stocks.
The Hang Seng Index climbed up 5.37 points, or 0.03%, to 18,791.03, while the Hang Seng China Enterprise Index surged 47.29 points, or 0.43% to 11,080.84.
In Australia, the stock market surged, extending winning streak for second consecutive day, on the back of gains in the shares of miner, energy, and materials and resources sector on firmer commodity and oil prices and on speculation China was looking to make more investments in the sector ahead of a recovery in commodities markets.
At the closing bell, the benchmark S&P/ASX200 index surged 22.8 points, or 0.57%, to 4,047.2, while the broader All Ordinaries spurted 30.4 points, or 0.76%, to 4,046.7.
On the economic front, the Australian Bureau of Statistics said in a statement that Australia’s unemployment rate increased to 5.7% in May after a further 27,200 full-time jobs were cut. The April figure was 5.4%. In the separate survey report revealed that consumer inflationary are expected a median rate of inflation was 2.8% in June, up from 2.3% cent the previous month.
In New Zealand, the stock market ended in red today, giving up the yesterday’s intraday gains as the market participants were quick to lock in gains after the New Zealand Reserve Bank left the official cash rate unchanged at 2.5%. The NZX 50 Gross Index finished the day down 31.43 points or 1.1% on last night's close, at 2797 while the NZX 15 Gross Index finished the day down 77 points or 1.5% at 5093.
In South Korea, stocks closed 0.32% higher after fluctuations due to the expiration of futures and option. The benchmark Korea Composite Stock Price Index (KOSPI) advanced 4.51 points to 1,419.39.
In Singapore, the stocks market finished the choppy session lower, under sell-off pressure following recent gains after a weak lead from Wall Street overnight and other Asian bourses. The market witnessed a mixed rally across the board. The blue chip Straits Times Index dived 9.41 points, or 0.39%, to 2,381.81.
In Taiwan, stock market carried its advance in second straight session, led by steel shares after China Steel said it would raise prices, while LED stocks also jumped on hopes of increasing demand from China. The main Taiex share index strengthened its yesterday’s gains as the Taiex index gained by 105.10 points or 1.63%, closing the day at 6567.37.
On the economic front, Taiwan’s domestic banks witnessed average interest rate for deposits at 1.15% per annum in the first quarter of 2009, while the loan rate at 2.36%, for a record low gap of 1.21%.
The shrinking rate gap was mainly sued to the central bank’s continuing lowering of interest rates. As a result, the gap between the deposit and loan rates dipped by 0.54 of a percentage point over the last six quarters.
According to the central bank of Taiwan, usually the major profits of domestic banks are generated by the interest differential. If based on the gap of 1.21%, then most domestic banks can hardly be profitable after deducting operating costs. So, to avoid further loss, they may be reluctant to offer new financing to enterprises.
In Philippines, the stock market sustained its upward trend for the second consecutive day, closing more than 2% higher despite the government slashing its growth outlook to only 0.8-1.8% this year, far below the previous estimate of 3.1-4.1%. However, investor’s sentiments were supported by the statement of Planning Secretary Ralph Recto, who said that they are confident that the Philippine economy will maintain a positive growth this year. OFW remittances have continued to increase.
The benchmark index PSEi escalated 2.69% or 68.08 points to 2,598.80, while the All Shares index increased 1.60% or 25.98 points to 1,645.64.
On the economic front, foreign direct investments reversed to a net outflow of $27 million in March amid the global downturn, causing inflows to fall more than 83% in the first quarter from a year earlier, the Bangko Sentral ng Pilipinas (BSP) yesterday said. The March outflow — the first since October 2008 — compared to an inflow of $149 million a year earlier and February’ $19-million result. For the first quarter, net inflows fell to $44 million from $266 million a year ago.
In India, the key benchmark indices snapped last two days' strong gains as investors booked profits. IT and oil stocks fell even as metal stocks rose. The BSE 30-share Sensex was down 55.34 points, or 0.36%, to 15,411.47. The S&P CNX Nifty was down 17.55 points or 0.38% to 4,637.70.
Elsewhere, Malaysia's Kula Lumpur Composite index was up 0.55% or 5.99 points to 1088.96 while Indonesia’s Jakarta composite index ended the day lower at 2089.58.
In other regional market, shares in Europe traded in a tight range, with investors cautious about pushing shares higher after the previous session's strong gains. Overall, the German DAX 30 index traded flat at 5,051.60, the French CAC-40 index slipped 0.4% to 3,303.03 and the U.K. FTSE 100 index declined 0.4% to 4,419.37.