Asia Rallies On Fed

Ivaylo
30 Jun, 2006
New York City

Apart from the good news from overseas, the Bank of Japan is also likely to meet expectations in that it will end its zero-interest rate policy as early as next month as economic data released Friday showed Japanese core consumer prices rose firmly in May, while the jobless rate fell to an eight-year low. Auto makers led the gainers as fears were allayed that higher U.S. interest rates could affect American consumer demand.

[R]7:30 AM Asian stocks rally in the wake of Fed’s decision on rates.[/R]
Asian markets finished higher on Friday. In Tokyo, the blue-chip Nikkei 225 index advanced 2.54% to settle at 15505.18. Auto stocks led the way, as Nissan Motor and Mazda Motor both surged 5% and Toyota Motor gained 4.18%. Oil-sector stocks were also buoyed as crude-oil prices advanced. Inpex Holdings soared 6.8% and Nippon Oil gained 2.8%. Hong Kong''s Hang Seng Index advanced 2.54% to16267.62. Cheung Kong Holdings advanced 3.7%, while Sun Hung Kai Properties climbed 2.6%. Sino Land rose 7.4% and Hang Lung Properties added 6.11%. In Seoul, the Korea Composite Stock Price Index, or Kospi, setttled up 2.5% at 1295.15. Financial shares bounced back, leading the gainers in the broader market. Kookmin Bank surged 3.9%, Hana Financial Group rose 3% and Industrial Bank of Korea jumped 4.6%. The Weighted Price Index of the Taiwan Stock Exchange gained 1.5% to 6704.41, while Sydney''s S&P/ASX200 index rose 1.53% to 5037.9.

[R]6:30 AM European stocks surge after Fed’s dovish statement.[/R]
European markets traded higher on Friday. The U.K. FTSE 100 index gained 1% at 5,851, the German DAX Xetra 30 index advanced 1.4% at 5,658, the French CAC-40 index rose 1.3% at 4,941. The advance was broad-based, but energy stocks were among the leaders after strong gains for their US peers as crude prices advanced above $73 a barrel, closing in on the $75.35 record set in April. Norway’s Statoil gained 2.5%, while France’s Total added 1.5% and Finnish refiner Neste Oil climbed 2.1% . Top gainers also included technology companies including Ericsson, up 2.1%, and automakers such as Renault, 1.3% higher. European movers included Germany''s Siemens and Bayer after they struck a deal over Bayer''s diagnostics division. Industrial conglomerate Siemens gained 1% after it announced late Thursday that it has agreed to buy Bayer''s diagnostics unit for 4.2 billion euros in an effort to expand its healthcare equipment and services business. Bayer shares surged 4.1% after the news.

Light sweet crude oil for August delivery gained 18 cents to $73.70 a barrel, while Brent crude futures on the ICE Futures exchange in London advanced 11 cents to $73.11 a barrel. Gold advanced to a two-week high of $602.30 an ounce before easing to $600.10/600.80 by mid-morning trading, up from $592.00/594.00 late in New York on Thursday. The dollar extended losses across the board after the Fed''s latest policy statement signaled a pause in the central bank''s long monetary-tightening campaign. The euro bought $1.2702 in morning European trading, up from $1.2644 in New York late Thursday. The British pound climbed to $1.8330 from $1.8260. The dollar also fell Friday against the Japanese currency, slipping to 114.74 yen from 115.26 yen.

[R]5:15 AM Gold tries $600 an ounce level.[/R]
August gold closed up $7.90 at $588.90 an ounce at the NYME. During the session, the contract advanced as high as $594.90. July silver finished at $10.333 an ounce, up 17.8 cents, off of a session high of $10.50 an ounce. July platinum ended $27.50 higher at $1,205.70 an ounce. The most-traded September copper contract gained 13.4 cents to finish at $3.3210 per pound.

Crude oil futures continued their upward movement Thursday, topping $73 a barrel for the first time in two weeks, as gasoline rallied to highs not seen since the aftermath of Hurricane Rita. August natural gas fell 2.5 cents to settle at $6.135 a million British thermal units. On the New York Board of Trade, Arabica coffee futures finished lower, cancelling an early increase to a three-week high. July ended down 0.2 cent at 97.5 cents a pound. July futures on raw sugar in foreign ports ended down 0.04 cent at 15.63 cents a pound.