Asian Markets set a tone for rebound; Follows Wall Street gains

22 Jan 2009 | 16:27 Asian Markets set a tone for rebound; Follows Wall Street gains
Stock markets in Asian region rose sharply on Thursday 22 January 2009, buoyed by WallStreet's performance overnight, even as signs emanating from China, Japan and South Koreashowed that the global slowdown is deepening.

On Wall Street, the stocks showed a strong upward move over the course of the trading dayon Wednesday, partly offsetting the steep losses that were posted in the previous session.The strength came as investors looked for bargains following recent market weakness. TheNasdaq Composite index surged up 4.6%, the Dow Jones Industrial Average rose 3.51% and theS&P 500 index added 4.35%.

In the commodity market, crude oil was little changed after rising on speculation abank-rescue plan by President Barack Obama will help boost economic growth and increasefuel demand

Crude oil for March delivery was at $43.46 a barrel, down 9 cent, or 0.21% after rising asmuch as 68 cents, or 1.6%, to $44.23 a barrel on the New York Mercantile Exchange. Brentcrude oil for March settlement was at $44.95 a barrel, down 7 cents, at 12:53 p.m.Singapore time on London's ICE Futures Europe exchange. The contract had risen asmuch as 47 cents, or 1 percent, to $45.49.

Oil prices surged on Wednesday as March took over as the front-month contract. Market alsoreacted to indications Organization of Petroleum Exporting Countries' members areimplementing production cuts as announced in December. Light sweet crude finished at$43.55, up $2.71 for the session. February oil closed its final session at $38.74, afterposing a gain on $2.23 on Tuesday.

Looking ahead for the day, the Energy Department will release its weekly inventory reporton Thursday, a day later than usual because of Monday's holiday and Tuesday's InaugurationDay.

Gold prices added $2.40 an ounce, or 0.28%, to $852.5 in Asian electronic trading onThursday after the most active February Comex gold contract eased $5.10 an ounce, or 0.6%,to $850.10 by the close of New York trading on Wednesday in response to profit bookingafter firmer greenback.

In the currency market, the U.S. dollar weakened against the Australian dollar, NewZealand dollar while it strengthened against the Japanese yen, South Korean won, theSingapore dollar.

In late Tokyo trades, the Japanese yen showed strength against the major currencies onThursday. The Japanese yen was quoted at 88.97 against the US dollar, down fromWednesday's quote of 89.89-92 yen.

The Hong Kong dollar was trading at HK$ 7.7592 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$0.6575 up from Wednesday'sclose of US$0.6533.

In late Wellington trades, the New Zealand dollar was buying US$0.5311, down compared toUS$0.5305 at close on Wednesday.

In late Seoul trades, the South Korean won was trading at 1,379.025 won to the U.S.dollar, down by 17.0250 won from Wednesday's close of 1,362.00 won.

In Taipei, the Taiwan dollar strengthened against the US dollar as it was trading at NT$33.5420 in the afternoon trade against the Wednesday closing of NT$ 33.6095.

The Singapore dollar finished at 1.4940 against the previous close of 1.4972 while theMalaysian Ringgit closed Friday's deals at 3.6095.

In Manila, the Philippines peso strengthened against the dollar. Currently, thedollar-peso pair is worth 47.38, compared to 47.4995 hit in the early trade.

Coming back in equities, Japanese stock index finish the session higher, snapped two daysof consecutive losses, buoyed by a Bank of Japan plan to help corporate financing. TheNikkei 225 Stock Average index spurted 150.1 points, or 1.9%, to 8,051.74, while thebroader Topix surged 8.76 point, or 1.1%, to 796.

On the economic front, the Ministry of Finance said in a report that Japan witnessed atrade deficit of 320.7 billion yen in December, the third consecutive month of decline,following the 225.2 billion yen deficit in November. Exports were down 35% on a year to4.833 trillion yen, while imports fell an annual 21.5% to 5.154 trillion yen.

The Bank of Japan outlined its plan for board meeting Thursday to maintain its keyshort-term interest rate at 0.1 per cent and buy 3 trillion yen (33.51 billion dollar) ofcommercial paper from banks and corporations to encourage lending.

In Mainland China, the lunar year celebration seemed to be started as the Shanghai stockindex finished the session higher, inspired by positive Wall Street overnight and strongerfourth quarter economic data meeting market expectations, with gains in pharmaceutical andoil related shares after the cabinet approved a reform plan for China's healthcaresystem and on rebound in crude oil prices.

The Shanghai stock market opened on a positive continuing the trend throughout the day.The benchmark Shanghai Composite Index, which covers both A shares and B shares on theShanghai Stock Exchange, surged 19.93 points, or 1%, to 2,004.95.

On the economic front, the National Bureau of Statistics said in a report thatChina's economic growth had slowed sharply to 6.8% in quarter ended December 2008from 9% the previous quarter. China full-year economic growth was 9% in 2008 compared with13% the year before, falling below the 10% mark for the first time in six years.

Meanwhile, the bureau also said CPI was up 1.2% on year in December following a 2.4% jumpin November. For all of 2008, CPI was up 5.9% versus a 4.8% gain in 2007. Producer priceseased 1.1% on year in December from 2% increase in November. For all of 2008, PPI was up6.9% versus a 3.1% expansion in 2007. Furthermore, the bureau said that urban fixed assetinvestment surged 26.1%, retail sales by 21.6%, and industrial production by 12.9% in 2008on a yearly basis.

In Hong Kong, market snapped two days of losing streak to finish the session higher, aftera higher opening inspired by positive Wall Street overnight and firmer mainland market asthe fourth quarter economic data meet market expectations. The Hang Seng index closed up74.36 points or 0.59% at 12,657.99. The Hang Seng China Enterprises index jumped 29.95points or 0.44% at 6,760.77.

The Australian stock market snapped two days of consecutive decline to finish the sessionhigher, on the back of strong rebound in property trusts, financials, miners, materialsand resources, and healthcare on following a triple-digit gain on Wall Street overnight.The benchmark S&P/ASX200 added 44 points, or 1.28%, to 3,486.8, while the broader AllOrdinaries surged 37.10 points, or 1.09%, to 3,431.90.

On the economic front, the Australian Bureau of Statistics said in a report that sales ofnew automobiles in Australia were up a seasonally adjusted 1.8% to 77,039 in December fromNovember. The Melbourne Institute survey of consumer inflationary expectations showed theexpected median inflation rate for January was 2.7%, up from 2.5% in December.

Stocks on the New Zealand share market advanced after equities on Wall Street bounced backon optimism about the financial outlook. The benchmark index rose, ending its three-daylosing streak following most of the regional stock markets. The benchmark NZX50 rose 1.09%or 29.370 points to close at 2734.411. The NZX 15 inched forward 1.09% or 53.649 points to4996.93.

In South Korea, Stock markets broke its two days losing jinx with a gain, led by banksincluding KB Financial, but grim economic growth data and LG Electronics, whose sharesslid after it reported a bigger-than-expected net loss, limited gains. The Korea CompositeStock Price Index finished up 12.62 points or 1.14% closing the day at 1,116.23.

On the economic front, worse-than-expected GDP data weighed on sentiment after South Koreasaid GDP fell a seasonally adjusted 5.6% in the fourth quarter, pushing the economy a bigstep closer to its first recession in a decade. For all of 2008, South Korea's grossdomestic product was up just 2.5%, marking the slowest rate of growth since the Asianfinancial crisis in 1998. South Korea's economy last contracted in 1998, by 6.9%, in theaftermath of the Asian financial crisis. The lowest growth since 1998 was 3.1% set in2003. GDP was up 5.1% in 2007.

The Singapore share market also snapped its two days of consecutive decline to finish thesession higher, on the back bargain hunting in recently battered shares on following atriple-digit gain on Wall Street overnight and firmer other Asian market. The benchmarkStraits Times Index gained 4.25 points, or 0.25%, to 1,708.77.

On the economic front, the Singapore's Economic Development Board said yesterday thatmanufacturing output declined a seasonally adjusted 11% month-on-month in December. On anannual basis, manufacturing output dropped 13.5% in December.

The Statistics Bureau of Singapore announced that the consumer prices index rose by 4.3%year-on-year in December. Month-on-month, consumer prices fell a seasonally adjusted 0.6%in December.

Singapore sharply reduced its economic outlook for 2009, prompting concerns that theregion's slowdown is intensifying and putting additional scrutiny on a slew ofeconomic figures expected in the coming days. Singapore's government plans to spend S$20.5billion this year to spur domestic demand and ease the impact of a severe recession.

The Philippines stock market bounced back from the seven days of losing streak, advancing1.2%, tracking the overnight gains on Wall Street. A strong show of strength by theservices, industrial and property indices also helped the composite indices to scale up.The benchmark index PSEi ascended 1.27% or 23.40 points to 1,863.52, while the All sharesindex rose 0.435 or 5.27 points to 1,208.41.

On the economic front, National Economic Development Authority (NEDA) projected a growthrange of 3.6-4.4% for the last three months of 2008, factoring in the effects of thefinancial crisis which became prominently visible in September last year, bringing afull-year growth estimate to 4.2-4.5%. The crisis started with Lehman Brothers' collapsein September, so the impact was felt in October-November.

In India, the key benchmark indices logged small gains in what was a highly choppy tradingsession on positive global cues. Stocks oscillated wildly reacting to inflation data,corporate results and global cues. As per the provisional figures, the BSE 30-share Sensexwas up 34.67 points, or 0.39%, to 8,813.84. The S&P CNX Nifty rose 4.25 points, or0.16%, to 2,710.40 as per the provisional figures.

On the economic front, India's inflation rose 5.60 % in the 12 months to 10 January2009, above the previous week's annual rise of 5.24%, government data showed.

Elsewhere, Malaysia's Kula Lumpur Composite index was up 0.64% or 5.61 points to 879.02,while Indonesia's Jakarta composite increased by 5.87 points or 0.44% closing the dayat 1,327.32. In Thailand, the Thai Stock exchange gained 7.04points or 1.63% to 438.27.Stock markets in Taiwan were closed for holiday.

In other regional market, European stocks opened higher, joining the party that opened inthe U.S. and spread to Asia as banking stocks at last regained some composure.

At 0900 GMT, London's FTSE 100 was up 1.7% at 4128.82, Frankfurt's DAX 30 was up 2.1% at4351.91 and Paris's CAC 40 was also up 2.1%, at 2966.02.

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