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,
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,
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