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Mar 1, 2009

Asian markets start week on a positive note

09 Feb 2009 | 18:29 Asian markets start week on a positive note
Asian markets started the week on a positive note with the market participants hoping for the quick passage of a large U.S. economic stimulus package and a less than expected slide in December core machinery orders in Japan supporting the Asian exporters. However, on the whole, the global economic outlook is still messy as the US economy reported a dismal piece of economic data in the form of the form of non-farm payrolls 

The statistics from the US Labor Department's employment situation report showed that through January, national payrolls shrunk by 598,000 jobs. This was the largest contraction since December of 1971. 

Meanwhile, the Asian markets drew comfort from the fact that the utterly negative non farm payrolls is likely to quicken the pace for the passage of a large U.S. economic stimulus package and in turn displayed the same exuberance which pushed the Dow Jones up by more than 200 points on Friday. 

Chinese shares rose on hopes for government policies to stimulate falling demand, while banks lifted Indian stocks on speculation of further interest-rate cuts. The Nikkei 225 ended down 1.3% to 7969.03 in Tokyo, after rising more than 2% earlier in the day. 

In India, benchmark Sensex rose to one-month high at 9,583.89 in intraday moves on expectations of tax sops in the forthcoming interim budget even after a lower GDP growth rate was projected. 

The Central Statistical Organisation (CSO) on Monday projected India's GDP growth for 2008-09 at 7.1 per cent, less than last year's 9 per cent, as the global financial crisis hammered manufacturing, financial services and farm sector output. 

In other regional markets, Taiwan's main index gained 0.5%, Australia's S&P/ASX 200 rose 1.1% and New Zealand's NZX-50 fell 0.3%, while South Korea's Kospi erased an early rise to end 0.6% down at 1202.69.

Indonesia shares fell 1.1% with Philippine shares up 0.5%.

Asian Market Support Stimulus With Surge

03 Feb 2009 | 16:28 Asian Market Support Stimulus With Surge
Stock markets in Asian region closed mostly higher on Tuesday 3 February 2009, despiteof lackluster performance on Wall Street overnight and stimulus measures in Japan andAustralia to stabilize markets and support their economies. The Bank of Japan announced tobuy about 1 trillion yen ($11.2 billion) in corporate shares held by banks, while theReserve Bank of Australia announced a $ 26 billion fresh spending to help the country'sresources-based economy accompanied by 100 basis point rate cut from Reserve Bank ofAustralia taking the interest rate to 3.25%.

Stocks at Wall Street ended on a mixed note trimming some of its early losses after datashowed a smaller-than-expected contraction in the manufacturing sector. The Dow JonesIndustrial Average finished down 64.11 points, or 0.8%, to 7,936.75. The S&P 500gained half of a point to stand at 825.43, and the Nasdaq Composite added 18.01 points, or1.2%, to 1,494.43.

Among major economic reports for the day, January ISM manufacturing data came in abetter-than-expected 35.6 after coming in at 32.9 in the prior month. In a separatereport, personal spending data showed that consumer spending remained under severeconstraint pressed by rising unemployment, tight credit and declining home prices, andswooning asset portfolios. Personal spending in December was down 1%. In another releaseconstruction spending in December fell 1.4%. Spending was down 1.2% in the prior month.

In the commodity market, crude oil rose in New York on speculation that OPEC, led by SaudiArabia, cut its output in January to avoid a supply glut and bolster prices.

Crude oil for March delivery gained as much as 69 cents, or 1.72%, to $40.77 a barrel inafter-hours electronic trading on the New York Mercantile Exchange. It was at $40.77 abarrel at 10:40 a.m. London time. Yesterday, futures fell $1.60, or 3.8%, to $40.08, thelowest settlement since 20 January 2009.

Brent crude oil for March settlement rose as much as 79 cents, or 1.80%, to $44.61 abarrel on London's ICE Futures Europe exchange. The contract yesterday declined$2.06, or 4.5%, to settle at $43.82 a barrel.

Gold prices retreated 70 cents an ounce, or 0.08%, to $902.10 in Asian electronic tradingon Tuesday after the most active February Comex gold contract erased $21.20 an ounce, or2.3%, to $907.20 by the close of New York trading on Monday as investors took profits andlightened safe-haven trades.

In the currency market, the U.S. dollar strengthened against the Australian dollar, NewZealand dollar, South Korean won, Philippines peso, Indonesian Rupaih Singapore dollar,while it weakened against the, Hong Kong Dollar, Chinese Yuan, New Taiwan Dollar andIndian Rupee.

In late Tokyo trades, the Japanese yen strengthened against the dollar. The Japanese yenwas quoted at 88.4750 against the US dollar, down from Friday's quote of 89.4600 yen.

The Hong Kong dollar was trading at HK$ 7.7545 against the dollar. Actually The Hong Kongdollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85to the U.S. dollar.

In late Sydney trades, the Australian dollar was trading at US$0.6346 down from Monday'sclose of US$0.6315.

In late Wellington trades, the kiwi ended the day at US50.97c from US50.33c yesterdayhaving risen just above US51c following the RBA decision. A large interest rate cut by theReserve Bank of Australia late this afternoon helped push the New Zealand dollar aboveUS51c, well above last night's six-year low.

In late Seoul trades, the South Korean won was trading at 1,389.70 won to the U.S. dollarin early trades, down 1.20 won from Monday's close of 1,390.40 won.

Coming back in Asian equities the stock markets in Japan, Hong Kong, Indonesia, Malaysiaand Philippines closed the day on a lower note while China, Taiwan, South Korea,Australia, New Zealand, Thailand, India, Singapore, closed the day on a higher note.

In Japan, the equity markets experienced the volatile trading session as government'sefforts to stimulate economy failed to cheer the market. After opening lower, Nikkeifinished the session lower in seesaw trade, with losses in banks and financials after amedia reports that the Mitsubishi UFJ Financial Group will post a loss for theApril-December period and slash its annual forecasts as well as dismal economic news.

The market recouped early losses as bargain hunters chased recently battered shares, andmarkets began the afternoon session upbeat after the Bank of Japan announced a plan to buyup to 1 trillion yen (11.17 billion dollars) of shares held by commercial banks throughApril 2010, but gains were erased in last hour of trading on worries over pessimisticearnings outlooks of Japanese firms.

The Nikkei 225 Stock Average index erased 48.47 points, or 0.62%, to 7,825.51, while thebroader Topix rose 4.06 points, or 0.52%, to 774.

On the economic front, the Bank of Japan said Japan's monetary base increased inJanuary by 3.9% to 93.5049 trillion yen or $1.046 trillion over its level of one yearearlier. Meanwhile, the current account deposits rose 41.8% in January following anincrease of 14.7% in December.

The Ministry of Health, Labor and Welfare said the value of Japan's total cashearnings was down 1.4% in December. Contractual cash earnings plummeted 1.0%, scheduledearnings by 0.2%, non-scheduled earnings by 11.2%, and special cash earnings by 1.7% onyear in December.

In Mainland China, the regional indices extended gains for second consecutive day, onexpectations of government stimulus packages for industrial sector to revive the slumpingeconomy. Market gains are also buoyed on hopes of fresh measures to boost the Chineseeconomy after Premier Wen Jiabao said that Beijing is considering adding to its previouslyannounced $585 billion fiscal package. The benchmark Shanghai Composite Index rose 49.12points, or 2.44%, to 2,060.80.

In Hong Kong, the market erased morning gains to finish the session lower, with loses inexporters and property developers on concern a slowing global economy will dent demand anddismal home loan data overshadowed gains in financials and industrial sector onexpectations of Beijing stimulus packages to revive the slumping economy. The Hang SengIndex tumbled 84.60 points, or 0.66%, to 12,776.89, while the Hang Seng China EnterpriseIndex rose 48.12 points, or 0.7% to 6,960.11.

In Australia, the stock market finished the session higher, after the Australiangovernment's announced A$42 billion fiscal stimulus measures and an upbeat profitforecast from Commonwealth Bank. After opening on a positive note, the market trimmed mostof morning gains after the RBA cut the interest rate to 3.25% from 4.25% in an effort tolure more borrowers into the housing market. The benchmark S&P/ASX200 spurted 11.30points, or 0.32%, to 3,508.7, while the broader All Ordinaries added 5.60 points, or0.16%, to 3,449.10.

On the economic front, the government of Australia unveiled a second stimulus plan of A$42billion (US$26.5 billion) into grants and infrastructure projects over the next threeyears to shield the economy from the global downturn. Treasurer Wayne Swan said A$28.8billion would be targeted at infrastructure, schools and housing, while A$12.7 billionwould be provided as cash payments for low and middle-income earners.

The Australian Bureau of Statistics said in a report that Australia seasonally adjustedgoods and services trade surplus of A$589 million in December. Seasonally adjusted goodsand services imports fell A$421 million or 2%, which included a decrease of 45% in thenon-monetary gold import category.

In New Zealand, equity market inched up slightly on Tuesday. The benchmark index that haddipped yesterday after gaining for five consecutive sessions, on concerns after thetreasury of New Zealand reported that the country's economy will stay in recession atleast until the end of March this year and a worsening global outlook is adding to therisk of a steeper slowdown

The benchmark NZX50 rose slightly by 0.32% or 8.791 points to close at 2780.287. However,the NZX 15 inched down 0.03% or 1.309 points to 5125.494.

Stock markets in South Korea followed the regional trend giving up yesterday's lossesending the day on a positive note. The surge was lead by the gains in banking andtechnology sector stocks. Shipbuilding stocks also supported the gains. The regionalmarket also bucked the mixed finish on Wall Street. The Korea Composite Stock Price Indexgained 16.25 points or 1.42% closing the day at 1,163.20.

On the economic front, the Bank of Korea said that South Korea's foreign exchange reservesrose for the second straight month in January and totaled $201.74 billion, up $520 millionfrom a month earlier.

Meanwhile, the International Monetary Fund lowered its forecast for the South Koreaneconomy and said that the economy will shrink 4% in 2009 due to weak domestic demand andexports amid the global economic slump. However, the IMF said that Asia's fourth-largesteconomy will likely turnaround and is expected to grow 4.2% in 2010.

In Taiwan the stock markets grip up yesterday's gains by closing the day at two weekhigh following a rally in DRAM stocks such as ProMOS rallying on hopes the struggling firmwas close to raising new loans to pay off debts. The main Taiex share index jumped 112.83points or 2.65% at 4,372.81- the highest closing since 14 January 2009 when marked closedat 4.521.47.

In Philippines, the stock market gave away yesterday's gain, closing the day lower,as uncertainty prevailed among the investors by more bleak economic news that pointed to adeepening slump in the economy. The benchmark index declined 0.40% or 7.44 points to1,826.13, while the all share index fell 0.33% or 4.03 points to 1,193.11.

On the economic front, the socioeconomic Planning Secretary Ralph G. Recto sees thePhilippines incurring a wider deficit of about P114 billion this year as the governmentwill have to spend more for economic pump-priming. The government originally expected thedeficit to hit P40 billion after which the deficit projection was raised to 102 billionpesos. However as the country requires additional expenditure due to increasing effects ofglobal economic downturn, the government has increased it's targets for the fiscaldeficit.

In Singapore, the stock market finished the session higher, as the bargain hunter steppedin after a two-day losing streak, with gains in manufacturing and construction sector onexpectations for Beijing aid for the industrial sector and stimulus measures in Japan andAustralia to support the economy from downturn. The benchmark Straits Times Index added6.63 points, or 0.39%, to 1,711.92.

In India, the key benchmark indices retreated from its fresh intra-day high attained inmid-afternoon trade led by gains in oil & gas, FMCG and banking shares. As per theprovisional figures, the BSE 30-share Sensex was up 82.60 points, or 0.91%, to 9,149.30.The S&P CNX Nifty added 0.62%, to 2,783.90.

Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.54% or 4.78 points to 879.67,while Indonesia's Jakarta composite decreased by 6.31 points or 0.48% to 1304.33. InThailand, the Thai Stock exchange gained 2.84 points or 0.66% to 430.69.

In the other regional market, European shares advanced, with telecom stocks among the topadvancers after Vodafone Group reassured on revenue trends. On a national level the GermanDAX 30 index rose 0.8% to 4,307.03 while the French CAC-40 index advanced 0.7% to2,950.04. The U.K. FTSE 100 index rose 0.2% to 4,084.97,

US stocks end higher

04 Feb 2009 | 09:34 US stocks end higher

Stocks at Wall Street ended higher on Tuesday, 03 January, 2009. Couple of better than expected earning reports and a positive economic data pertaining to the housing industry gave a good boost to the stocks. Even though January car sales data checked in line with expectations, each company witnessing major drop, stocks ignored the data and Dow continued to climb upwards.

The Dow Jones Industrial Average ended higher by 141 points at 8,078, the Nasdaq closed higher by 22 points at 1,516 and the S&P 500 closed higher by 13 points at 838.

Nine of the ten sectors ended in the green today. Financials were the only laggard. GM was one of the few laggards among Dow components today.

The auto sales of January that checked in came in as usual. Ford announced January sales declined approximately 40% year-over-year, while General Motors reported a near 51% year-over-year drop in January sales. Toyota Motor reported that January sales decreased more than 34% from the prior year. Kia Motors was the only company that witnessed growth in January sales.

Among major economic reports for the day, The National Association of Realtors reported today that the number of new sales contracts on existing homes jumped a seasonally adjusted 6.3% in December. Lower mortgage rates and falling prices perhaps led to this jump. The pending home sales index rose 6.3% in December and is now up 2.1% compared with a year earlier.

The increase points to a healthy gain in existing-home sales in January and February. The index is based on signed sales contracts, which usually occur a month or two before the sale is closed, when sales are reported in the NAR's existing home sales report.

Merck and ADP came out with better than expected earning reports. On the other hand, UPS, Sandisk, Motorola and Dow Chemical failed to live up to expectation.

Among other major events in the US market today, Treasury released details announcing it invested approximately $1.15 billion in 42 banks as part of the Capital Purchase Program. The added capital is meant to help the banks meet lending needs and help keep credit flowing. On a similar note, reports indicated that Citigroup plans to use roughly $36.5 billion of the TARP funds it has received for new loans.

On Tuesday, crude-oil futures for light sweet crude for March delivery closed at $40.78/barrel (higher by $0.70 or 1.7%) on the New York Mercantile Exchange. Earlier during the day, it touched a high of $41.17. Last week, crude prices ended lower by 10%. In January, 2009, crude shed 14%.

At the currency market on Tuesday, the dollar index, which tracks the dollar against a trade-weighted basket of six major currencies, fell by 1%.

Wednesday's economic calendar features the January Jobs Report and the January ADP Employment report. The January ISM Service Index and the wekly energy inventory reports are also due tomorrow morning.

Asian Market extends Wall Street Rally

04 Feb 2009 | 16:48 Asian Market extends Wall Street Rally
Stock markets in Asian region closed mostly higher on Wednesday 4 February 2009, asheartening news on the housing market in the US and a recovery in China's manufacturingactivity in January improved the outlook for the battered global economy. Following theAustralian stimulus package China's central government has launched a new stimulusplan totaling 130 billion Yuan (19 billion U.S. dollars) to boost its economy.

Stocks at Wall Street ended higher as couple of better than expected earning reports and apositive economic data pertaining to the housing industry gave a good boost to the stocks.The Dow Jones Industrial Average ended higher by 141 points at 8,078, the Nasdaq closedhigher by 22 points at 1,516 and the S&P 500 closed higher by 13 points at 838.

Among major economic reports for the day, the National Association of Realtors reportedtoday that the number of new sales contracts on existing homes jumped a seasonallyadjusted 6.3% in December. Lower mortgage rates and falling prices perhaps led to thisjump. The pending home sales index rose 6.3% in December and is now up 2.1% compared witha year earlier.

In the commodity market, crude oil rose for a second day on speculation that reduced OPECproduction in January will curb global inventories and bolster prices.

Crude oil for March delivery gained 14 cents, or 0.34%, to $40.92 a barrel in electronictrading on the New York Mercantile Exchange at 9:55 a.m. London time. Yesterday, futuresrose 70 cents, or 1.8%, to settle at $40.78.

Brent crude oil for March settlement increased 0.12 cents, or 0.27%, trading at $44.20 abarrel on London's ICE Futures Europe exchange today.

Gold prices leaped $10.50 an ounce, or 1.18%, to $903.00 in Asian electronic trading onWednesday after the most active February Comex gold contract erased $14.70 an ounce, or1.6%, to $892.50 by the close of New York trading on Tuesday as investors continued tolighten safe-haven trades.

In the currency market, the U.S. dollar strengthened against the Australian dollar, NewZealand dollar, South Korean won, Philippines peso, Hong Kong Dollar, Singapore dollar,Indian Rupee, while it weakened against the Japanese yen, Chinese Yuan, New Taiwan Dollarand Indonesian Rupaih.

In late Tokyo trades, the Japanese yen strengthened against the dollar. The Japanese yenwas quoted at 88.920 against the US dollar, down from Tuesday's quote of 89.4365 yen.

The Hong Kong dollar was trading at HK$ 7.7540 against the dollar. Actually The Hong Kongdollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85to the U.S. dollar.

In late Sydney trades, the Australian dollar was trading at US$0.6402 down from Tuesday'sclose of US$0.6513.

In late Wellington trades, the kiwi closed the day at US51.12c from US50.97c yesterday.The currency touched a six-year low around US49.65c on Tuesday.

Coming back in Asian equities, the stock markets in Japan, Hong Kong, China, Taiwan, SouthKorea, Thailand, Indonesia, India and Philippines closed the day on a higher note whileAustralia, New Zealand, Singapore, Malaysia closed the day on a lower note.

In Japan, stock indices finished the session higher, snapped a three days of losing streakas bargain hunters chased recently battered shares and triple digit gains in Wall Streetovernight. The Nikkei 225 Stock Average index spurted 213.43 points, or 2.73%, to8,038.94, while the broader Topix rose 18.99 points, or 2.45%, to 792.78.

Banks and financials and property developers spurted after the Bank of Japan announced aplan to buy up to 1 trillion yen (11.17 billion dollars) of shares held by commercialbanks through April 2010 and upbeat housing sales figure in U.S., while shares of Tech,automakers, and exporters were higher as bargain hunters step in on hopes they may beearly winners from an economic upturn. Shipping stocks extended gains on tracking gains inBaltic Dry index.

In Mainland China, the stock market finished extended gains for third consecutive day amidhopes that an expected increase in bank lending will help boost market liquidity and onexpectations of government stimulus packages will revive growth in the world'sthird-largest economy. The market witnessed a heavy buying pressure as the mainland indexleaping widely watched technical level, buoyed of further signs that economic growth mightbe starting to bottom out. The benchmark Shanghai Composite Index rose 46.94 points, or2.3%, to 2,107.75.

On the economic front, the China Federation of Logistics and Purchasing said China'spurchasing managers' index (PMI) for January rose to 45.3 from 41.2 in December. Areading below 50 indicates a contraction.

China's central government has launched a new stimulus plan totaling 130 billion Yuan(19 billion U.S. dollars) to boost its economy, an official of the National Developmentand Reform Commission (NDRC) said.

In Hong Kong, the stock market finished the session sharply higher, snapping its two daysof losing streak as bargain hunter stepped in amid hopes that an expected increase in banklending will help boost market liquidity and on expectations of China's economic stimuluspackage may be beginning to shield it from the global slump. The Hang Seng Index spurted287 points, or 2.25%, to 13,063.89, while the Hang Seng China Enterprise Index rose2281.61 points, or 4.05% to 7,241.72.

In Australia, the stock market finished the session lower, weighed down by the flow of badnews coming from corporate and a number of capital raisings drained cash from the market.The benchmark S&P/ASX200 tumbled 70.80 points, or 2.02%, to 3,437.90, while thebroader All Ordinaries retreated 66.80 points, or 1.95%, to 3,382.30.

On the economic front, the Australian Bureau of Statistics said in a report that number ofpermits for construction of new dwellings in Australia declined in December by aseasonally adjusted 2.9% from November, while the number of dwelling approvals for thefull 2008 year to December was down a seasonally adjusted 32.9% from 2007.

In a separate release the Australian Bureau of Statistics showed that the nation'sretail sales surged 3.8% in December compared to the previous month.

Australian Industry Group's latest report showed that Australia's performance ofService Index rose 1.7 points to 41.0 in January.

In New Zealand, stock market dipped even though most of the Asian markets moved forward onWednesday following gains on the Wall Street. However the share market gained in themorning today trailing behind the US markets. During the early trading hours, thebenchmark NZX-50 index was up 10.2 points to 2790.49, after ending yesterday up 8.8points. The benchmark NZX50 was down 0.42% or 11.67 points to close at 2768.618. However,the NZX 15 inched down 0.35% or 18.182 points to 5107.312.

In South Korea, stock markets closed the day sharply higher following the overnight gainson Wall Street and the extension of a currency swap facility between Seoul and Washington.Kumho Asiana Group shares rally accompanied by gains in technology stocks helped the indexto close the day sharply higher. The Korea Composite Stock Price Index gained 32.17 pointsor 2.77% closing the day at 1,195.37.

The Bank of Korea said that the U.S. Federal Reserve has extended its US$30 billioncurrency swap facility with South Korea by six months in a move to help ease financialmarket worries over a dollar shortage. The swap line has now been extended until 30October 2009.

Among economic news, a report by the Ministry of Knowledge Economy on Wednesday said thatSouth Korea's exports of information technology products in January plunged 38.3% on-yearin January to US$6.96 billion. Meanwhile, imports during the month dropped 36.9% toUS$4.09 billion, for a surplus of US$2.87 billion.

In Singapore, the stock market wiped out morning gains finishing the session lower as theinvestors booked profit following early gains in commerce, financials, constructions,properties, manufacturing, and construction sector on tracking gains in other Asian marketand triple digit gains in Wall Street overnight. The benchmark Straits Times Index dropped4.53 points, or 0.26%, to 1,707.39.

On the economic front, the Monetary Authority of Singapore (MAS) extended a reciprocalcurrency arrangement of $30 billion with the United States Federal Reserve to the end ofOctober 2009. The temporary reciprocal currency arrangement (swap line) was firstestablished on 30 October 2008 to improve U.S. dollar liquidity conditions in globalfinancial markets

In Taiwan, stock market extended its post lunar holiday streak for the third session, asinvestors favor to some technology firms as set positive tone for the first quarter resultof 2009. The main Taiex share index gained 17.16 points or 0.39% at 4,389.97- the highestclosing since 14 January 2009 when marked closed at 4.521.47

In the economic news, Taiwan's council for economic planning and development announcedthat the leading index declined 2.3% month-on-month to 93 in December. Its annualizedsix-month rate of change dropped by 2 points to minus 17.2%, falling for the fourteenthconsecutive month. In December, the coincident index declined 8.2% to 81.6. Itstrend-adjusted index declined 8.4% to 75.4. The index dropped for the tenth consecutivemonth. The monitoring indicators were down 2 points to 9 in December

In other economic news, Taiwan's government has announced to offer tax breaks,subsidized loans and rent reductions on land to lure local investors back from China, theeconomics ministry said in a statement Tuesday. The government aims to attract NT$35billion ($1 billion) in 2009 from the return of Taiwanese businessmen currently operatingin China, creating 11,000 jobs from those investments, Yiin Chii-ming, Minister ofEconomic Affairs said at a press conference yesterday in Taipei.

In Philippines, stock market reversed the yesterday's losses, closing the day higherassisted by the hefty gains registered by the key heavy weight indices. The benchmarkindex PSEi augmented 1.17% or 21.42 points to 1,847.55, while the all share indexincreased 0.69% or 8.25 points to 1,201.36.

In India, key benchmark indices closed the day with marginal gains. As per the provisionalfigures, the BSE 30-share Sensex was up 41.48 points, or 0.45%, to 9,190.78. The S&PCNX Nifty rose 16.60 points, or 0.6%, to 2,800.50.

Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.33% or 2.87 points to 876.80,while Indonesia's Jakarta composite increased by 2.35 points or 0.55% to 1320.36. InThailand, the Thai Stock exchange gained 2.35 points or 0.55% to 433.04. In other regionalmarket, European shares rose on Wednesday, with Aviva, BHP Billiton and Alcatel-Lucentadvancing after releasing earnings, and with oil producers also performing well. On anational level, the U.K. FTSE 100 index climbed 0.5% to 4,184.77, the German DAX 30 indexrose 0.7% to 4,404.67 and the French CAC-40 index advanced 1.1% to 3,014.22.

A weak finish to a strong start at Wall Street

05 Feb 2009 | 09:37 A weak finish to a strong start at Wall Street

A strong start to the day ended in a weak finish at Wall Street on Wednesday, 04 January, 2009. Couple of better than feared economic reports gave a good start to stocks early during the day. But the momentum faded after a few companies missed their earning estimates. Oil prices too gave up early gains after Energy Department reported more than expected build up in crude inventory during last week.

After trading higher by 65 points earlier during the day, The Dow Jones Industrial Average ended lower by 122 points at 7,956, the Nasdaq closed lower by 1.2 points at 1,515 and the S&P 500 closed lower by 6.3 points at 832.

Six of the ten sectors ended in the red today led by the telecom sector.

Today, disappointing earnings came from Disney and Kraft. Kraft also disappointed by lowering its outlook. Both companies weighed on the Dow.

Earlier during the day, The Institute for Supply Management reported hat U.S nonmanufacturing sectors continued to contract but at a slower pace in January. The ISM's non-manufacturing index rose to 42.9% last month from 40.1% in December. In November, the index reached a record low of 37.4%. Readings below 50% indicate that more firms are contracting than expanding.

The report detailed that in January, only two industries reported growth - health care & social assistance, and finance & insurance. Among the 16 industries reporting contractions were mining, retail trade, and arts, entertainment & recreation.

In a separate report, the ADP employment index reported today that U.S. private sector companies shed a seasonally-adjusted 522,000 jobs in January, 2009.

The ADP index, compiled from anonymous payroll data, showed that goods-producing industries lost 243,000 jobs, while service-producing industries lost 279,000 jobs. Large firms cut 92,000 jobs, medium-sized firms shed 255,000 jobs and small firms reduced their payrolls by 175,000 jobs. The ADP index covers only private-sector jobs.

December's job loss, according to ADP, was revised to a loss of 659,000 from 693,000. By contrast, the government data had showed private-sector job losses of 531,000 in December.

On the other hand, retailer Costco disappointed by announcing its second quarter earnings will be substantially below the current estimate, and that January same-store sales slipped 2% year-over-year. This led other retailers to be a laggard today.

On Wednesday, crude-oil futures for light sweet crude for March delivery closed at $40.32/barrel (lower by $0.46 or 1.1%) on the New York Mercantile Exchange. Earlier during the day, it touched a high of $41.92. But while dropping, it touched a low of $39.74.

The EIA reported today that crude inventories rose for a sixth straight week to 346.1 million barrels last week, the highest level since July 2007. Meanwhile, U.S. refineries operated at 83.5% of their operable capacity last week, up from the previous week's 82.5%. The EIA also reported gasoline inventories rose by 300,000 barrels while distillate fuel, which includes diesel and heating oil, fell by 1.4 million barrels.

Among major developments in Washington today, President Obama stated that the government will impose an $500,000 compensation cap on companies receiving TARP funds.

Initial jobless claims for the last week are the first thing due tomorrow morning. Preliminary fourth quarter productivity data and fourth quarter unit labor costs are also due followed by the December factory orders.

Asian markets whistle retreat song

05 Feb 2009 | 16:23 Asian markets whistle retreat song
Stock market in Asian region finished mostly lower on Thursday 5 February 2009, as mostof the investors booked profit following the previous day's gains amid spreadingconcerns over the global economy.

The regional market also followed a weak finish at Wall Street on Wednesday. Couple ofbetter than feared economic reports gave a good start to stocks early during the day. Butthe momentum faded after a few companies missed their earning estimates. Oil prices toogave up early gains after Energy Department reported more than expected build up in crudeinventory during last week. After trading higher by 65 points earlier during the day, TheDow Jones Industrial Average ended lower by 122 points at 7,956, the Nasdaq closed lowerby 1.2 points at 1,515 and the S&P 500 closed lower by 6.3 points at 832.

Among major economic reports for the day, the Institute for Supply Management reported hatU.S non-manufacturing sectors continued to contract but at a slower pace in January. TheISM's non-manufacturing index rose to 42.9% last month from 40.1% in December. InNovember, the index reached a record low of 37.4%. Readings below 50% indicate that morefirms are contracting than expanding.

In a separate report, the ADP employment index reported today that U.S. private sectorcompanies shed a seasonally adjusted 522,000 jobs in January 2009.

In other report, the EIA reported today that crude inventories rose for a sixth straightweek to 346.1 million barrels last week, the highest level since July 2007. Meanwhile,U.S. refineries operated at 83.5% of their operable capacity last week, up from theprevious week's 82.5%. The EIA also reported gasoline inventories rose by 300,000 barrelswhile distillate fuel, which includes diesel and heating oil, fell by 1.4 million barrels.

In the currency market, the South Korean won was trading at 1,381.85 won to the U.S.dollar on Thursday, down from Wednesday's close of 1,378.5 won.

In the commodity market, crude oil was little changed after falling on a government reportthat showed U.S. inventories of the fuel jumped. Supplies rose 7.2 million barrels to346.1 million barrels last week, the highest since July 2007, according to the EnergyDepartment yesterday. U.S. fuel demand during the past four weeks averaged 19.5 millionbarrels a day, down 2.8% from a year earlier, the report showed.

Crude oil for March delivery was at $40.47 a barrel, up 15 cents, in after-hourselectronic trading on the New York Mercantile Exchange at 2:08 p.m. Singapore time. Itearlier fell as much as 27 cents, or 0.7%, to $40.05 a barrel.

Brent crude oil for March settlement was at $44.40 a barrel, up 25 cents, on London'sICE Futures Europe exchange at 1:58 p.m. in Singapore.

Gold prices leaped $4.90 an ounce, or 0.54%, to $907.10 in Asian electronic trading onThursday after the most active April Comex gold contract gained $9.70 an ounce, or 1.1%,to $902.50 by the close of New York trading on Tuesday in response to weaker greenback.

In the currency market, the U.S. dollar strengthened against the Japanese yen, SouthKorean won, Philippines peso, Hong Kong Dollar, Indian Rupee, New Taiwan Dollar andIndonesian Rupaih while it weakened against the Australian dollar, New Zealand dollar,Singapore dollar and Malaysian Ringgit.

In late Tokyo trades, the Japanese yen strengthened against the dollar. The Japanese yenwas quoted at 88.7270 against the US dollar, down from yesterday's quote of 89.4285yen.

The Hong Kong dollar was trading at HK$ 7.7539 against the dollar. Actually The Hong Kongdollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85to the U.S. dollar.

In Sydney trades, the Australian dollar was trading at US$0.6492 down from yesterday'sclose of US$0.6434.

In Wellington trades, the New Zealand dollar ended the week at US51.03c from US50.12cyesterday, having ranged overnight between about US51.50c and US50.20c. The currency putin a firm performance on the last day before a holiday weekend after milder than expectedemployment data.

The South Korean won was trading at 1,381.85 won to the U.S. dollar on Thursday, down fromWednesday's close of 1,378.5 won.

Coming back in Asian equities, the stock markets in Japan, China, Taiwan, South Korea,Australia, and India closed the day on a lower note while Hong Kong, New Zealand,Thailand, Indonesia, Singapore, Malaysia and Philippines closed the day on a higher note.

In Japan, the stock indices finished the session lower, as market players booked profitfollowing the previous day's gains amid spreading concerns over the Japanese economyafter a series of sluggish corporate earnings results and by the outlook at home andabroad. After opening lower the index tumbled further closing today's session innegative. The Nikkei 225 Stock Average index tumbled 89.29 points, or 1.11%, to 7,949.65,while the broader Topix dropped 6.37 points, or 0.8%, to 786.

In Mainland China, the stock indices came off from the morning highs to finish the sessionlower, snapping three days of winning streak as investors booked profits across the boardfollowing a three day of positive rally sparked by government stimulus plans. Thebenchmark Shanghai Composite Index, erased 9.73 points, or 0.46%, to 2,098.02.

In Hong Kong, the markets hold up morning gains to finish the session higher, extendingwinning streak for second consecutive day as bargain hunter stepped in amid hopes that anexpected increase in bank lending will help boost market liquidity and on expectations ofChina's economic stimulus package may be beginning to shield it from the globalslump. The Hang Seng Index spurted 115.01 points, or 0.9%, to 13,178.9, while the HangSeng China Enterprise Index rose 214.09 points, or 2.96% to 7,455.81.

In Australia, the stock market finished the session lower, weighed down by the flow of badnews coming from corporate and rekindled worries over liquidity crunch as a number ofdiscounted capital raisings drained cash from the market. The benchmark S&P/ASX200tumbled 9.30 points, or 0.27%, to 3,428.60, while the broader All Ordinaries retreated9.70 points, or 0.29%, to 3,372.60.

In New Zealand, the equity market ended the last trading day of the week in the positiveregion prior to a long weekend in New Zealand on account of Waitangi Day that iscelebrated by the county as the national day on 6 February every year. The benchmark NZX50edged forward 0.18% or 4.877 points to close at 2773.495. However, the NZX 15 moved ahead0.47% or 24.007 points to 5131.319.

On the economic front, figures released by statistics New Zealand today revealed that thelabour market in seasonally adjusted terms, showed further signs of weakening as theunemployment rate continued to increase.

The December 2008 quarter saw the number of people unemployed rise by 10,000 and theunemployment rate increase to 4.6%, the highest rate in six years. The unemployment rateincreased steadily throughout 2008. However, New Zealand's unemployment rate still remainslow relative to many other countries.

Data also revealed that the New Zealand employees worked fewer hours last year registeringthe first such drop in nine years. The total paid hours in the country, when seasonallyadjusted, decreased by 1.4 percent in the year to December 2008.

Moreover, the labour cost index (LCI), released, showed that salary and wage ratesincluding overtime were 3.3 percent higher in the December 2008 quarter than in theDecember 2007 quarter.

In South Korea, stock markets gave up some of its gains, as banks stocks fail on continuedworries about their financial health. The Korea Composite Stock Price Index retreated17.49 points or 1.46% closing the day at 1,177.88.

On the economic front, a government report said that South Korea's economy faces a growingrisk of falling into recession as domestic demand and exports take a steep downturn amidthe global economic slump. The monthly economy-assessment report by the finance ministrycalled on the government to step up efforts to safeguard jobs and stimulate thefast-slowing economy by frontloading its fiscal spending this year.

Meanwhile, the delinquency rate of South Korean credit card firms rose in the fourthquarter from the preceding third quarter, hit by the slowing economy, the FinancialSupervisory Service said Thursday. The financial watchdog said that the default ratio ofSamsung Card Co. and four other card firms came in at 3.43% at the end of 2008, up 0.15percentage point from three months earlier.

In Singapore, the stock market finish the session lower, dragged down by banks andfinancials on persistent worries over slowing domestic loan growth, mounting losses frombad debts, and falling fee income from slumping capital markets overshadowing upbeatoutlook by China economic stimulus efforts to boost the Chinese economy. The benchmarkStraits Times Index slipped 2.79 points, or 0.16%, to 1,704.60.

In Taiwan, stock markets snapped its three-day winning streak on Thursday 5 February 2009,after some foreign analyst issued a gloomy outlook for Taiwan's economy, saying theeconomy will shrink by 11% in 2009. Though the government sources condemned theprediction, its fail to regain investor's confidence in today's trading session as aboutall major sectoral indices showed a correction. The fall can also be attributed to theprofit booking done by investors as the index touched 3 week's high in yesterday'ssession. The main Taiex share index closed down 26.72 points or 0.61% at 4,363.25, showinga retreat from the three week closing high reached in the previous session.

In Philippines, the stock market sustained its upward rally for the second consecutiveday, closing higher, buoyed by the positive investors sentiment in tandem with positivenews on the economic facade. Moreover a positive show of strength by the key heavy weightindex also dragged the benchmark index higher. The benchmark index soared 2.40% or 44.52points to 1,892.07, highest since 20 January 2009, while the all share index rose 1.60% or19.31 points to 1,220.67.

The local market took the cue from inflation figures, which fell almost 1-percentagepoints, to its lowest in 10 months in January at 7.1% from 8.0% in December 2008 and apeak of 12.5% in August last year.

Moreover the Bangko Sentral Ng Pilipinas (BSP)- central bank- is optimistic the inflow offoreign direct investment (FDI) will remain strong despite the worsening global economicconditions. The BSP expects the business process outsourcing (BPO) industry, includingcall centers, and the manufacturing sector to post the highest FDI inflows this year,citing that the BPO sector still had much room for growth this year and over the mediumterm.

In India, key benchmark indices followed the regional trend with some volatility. Despiteof lowering inflation rate market to retreat as it closed the day in negative. As per theprovisional figures, the BSE 30-share Sensex was down 103.74 points, or 1.13%, to9,098.11. The Sensex rose 45.24 points at the day's high of 9,247.09 in early trade. TheSensex fell 184.77 points at the day's low of 9,017.08 in mid-afternoon trade. The S&PCNX Nifty was down 17.35 points, or 0.62%, to 2,785.70 as per the provisional figures.

On the economic front, Inflation based on the wholesale price index rose 5.07% in 12months to 24 January 2009, below the previous week's annual rise of 5.64%, data releasedby the government today, 5 February 2009, showed on Thursday. It was the slowest annualrise since 9 February 2008 when inflation was at 4.98%. The Reserve Bank of India (RBI)said in its monetary policy review on 27 January 2009 it expected annual inflation to bebelow 3% by the end of the 2008/09 fiscal year in March 2009.

Elsewhere, Malaysia's Kula Lumpur Composite index was up 0.36% or 3.15 points to 879.95,while Indonesia's Jakarta composite increased by 7.71 points or 0.58% to 1328.08. InThailand, the Thai Stock exchange gained 0.40 points or 0.09% to 433.44.

In other regional market, European shares fell sharply as investors eyed the latest roundof results from some of Europe's top companies ahead of interest rate decisions from boththe European Central Bank and the Bank of England. The U.K. FTSE 100 index fell 1.3% to4,172.52, the German DAX 30 index declined 1.7% to 4,417.99 while the French CAC-40 indexslid 1.9% to 3,010.95.

The day ahead is scheduled to release interest rate decisions from European Central Bankand Bank of England. The 10-year-old European Central Bank is expected to hold its firewhen the rate-setting Governing Council meets today, reluctant to immediately push thekey-lending rate below the record low of 2% matched last month.

On the other hand, the 314-year-old Bank of England is widely expected to cut its key rateby half of a percentage point to 1%, having pushed the official bank rate to 1.5% andbelow its longstanding record low of 2% in January

US stocks manage a decent turnaround

06 Feb 2009 | 09:30 US stocks manage a decent turnaround

Stocks at Wall Street ended higher on Thursday, 05 January, 2009. Couple of better than earning reports helped stocks gain momentum which had otherwise had a slow start due to a weaker than expected guidance from Cisco Systems after yesterday's close. Economic reports dominated the first half today and all were almost in line with expectations pointing out towards an economy in recession. Financial and technology sectors contributed to the turnaround.

After opening 103 points lower earlier in the day, The Dow Jones Industrial Average ended higher by 106 points at 8,063, the Nasdaq closed higher by 31 points at 1,546 and the S&P 500 closed higher by 13 points at 845.

Indices managed a turnaround after reports hit the wires that Treasury Secretary Geithner is expected to unveil a comprehensive financial framework plan on next Monday. The traders anticipated that the idea that the government's forthcoming plan to shore-up banks could provide a good reason for stocks to rally in the coming months.

Among major earning reports for the day, Cisco topped earnings expectations, but issued downside revenue guidance. Visa and MasterCard both topped earnings expectations.

Many retailers disclosed their same store sales data which were disappointing as expected. Surprisingly, Wal-Mart witnessed a 2.1% jump in same store sales in January, 2009 and this gave the stock a good boost today.

Among major economic reports of the day, there were quite a few. The Commerce Department reported today that new orders for manufactured goods in US fell 3.9% in December for the fifth consecutive month of declines. It was a little more thane expected. In November, orders fell 6.5%, revised lower from a previously estimated drop of 4.6%.

The Labor Department reported today that the number of new claims for state unemployment benefits surged to their highest level since 1982. Initial jobless claims rose 35,000 to a seasonally adjusted 626,000 in the week ended 31 January, 2009. This put the number at the highest level in 26 years. Meanwhile, the four-week average of new claims rose by 39,000 to 582,250. Continuing jobless claims rose by 20,000 in the week ended 24 January, 2009 to a seasonally adjusted 4.79 million, the most since the government's records began in 1967.

Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new employment. The claims data show that businesses are laying off workers at a rapid pace and that finding a replacement job is proving ever harder for those who've lost work.

In a separate report, the Labor Department reported today that U.S. firms cut back on their employees' working hours in the fourth quarter, keeping productivity growth rising faster than expected and suppressing output. Productivity in the non-farm business sector increased at a 3.2% annualized rate as output fell 5.5% and hours worked dropped 8.4%. The decline in output was the largest since 1982 while the decline in hours was the weakest since 1975.

Oil prices gave up earlier losses and ended higher for the day on Thursday, 05 February, 2009 as US stocks rallied today and OPEC hinted at further production cuts. Prices initially had dropped as yesterday's weekly inventory report by the Energy department showed that crude inventories rose more than expected in the last week. Gasoline prices too jumped considerably higher today.

On Thursday, crude-oil futures for light sweet crude for March delivery closed at $41.17/barrel (higher by $0.85 or 2.1%) on the New York Mercantile Exchange. Earlier during the day, it touched a low of $39.46. Last week, crude prices ended lower by 10%. In January, 2009, crude shed 14%.

January job reports will be the main area of focus for tomorrow's market momentum. Market anticipates another half a million of layoffs to be announced in tomorrow's report.

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