Japan Higher, Shanghai Surges

Ivaylo
29 Sep, 2006
New York City

Japanese government data showed industrial production rising 1.9% in August from the previous month, reinforcing the view that the economic recovery remains on track. Japanese stocks including Mitsubishi UFJ Financial Group and Honda Motor gained, while Shanghai index hit its highest level in nearly two and a half years. Hong Kong, Australia also advanced and South Korea ended flat.

[R]7:30AM Japanese stocks gain on economic data nad U.S. rally.[/R]
Asian markets were higher on Friday. Japan''s Nikkei 225 Average finished the day up 0.6% to 16,127.6. Shares of Japanese Internet and telecom conglomerate Softbank Corp. jumped 7.2% after the company unveiled a line of new 3G handsets Thursday. Shares of electronics maker Fujitsu gained 1.7% on news that it would buy manufacturing facilities in Japan from U.S. flash-memory maker Spansion Inc. Mitsubishi UFJ added 1.3% on expectations the continuing economic growth suggested by the morning data would fuel lending.

The Shanghai Composite Index closed up 0.9% at 1,752.4, with bank shares leading gains on expectations the yuan would continue to strengthen. Hang Seng Index in Hong Kong finished up 0.1% after emerging from negative territory in the last minutes of trading. Hang Lung Properties led advancers, adding 3% after having fallen more than 5% in the course of the week.

Australia S&P/ASX 200 gained 0.8%, while South Korea Kospi index ended flat. In Taiwan, shares of Hsinchu International Bank gained 6.9% after the company received a $1.2 billion takeover offer from Standard Chartered Plc. The broader Taiwan market ended flat.

[R]6:30AM European shares advance on auto, hedge funds, and U.S. markets.[/R]
European markets were higher by mid morning on Friday. the FTSE 100 in London added 0.5% to 6,000.4, the Xetra Dax was up 0.6% to 6,023.10, and the CAC 40 in Paris gained 0.6% to 5,281.15.

In focus

Auto stocks performed well as the main European manufacturers were upbeat at the Paris Motor Show.

Advancers

Porsche added 1% after it said it aimed to remain the most profitable carmaker.Elsewhere, Fiat added 1.7% and BMW gained 1.3%. German truckmaker MAN continued to benefit from the possibillity that a costly bid for Swedish rival Scania will fail, and the possibility that it may enter a three way merger deal with Scania and Volkswagen truck unit. MAN gained 1.4%, VW added 1.3%.

Man Group, the largest listed hedge fund in the world, led financial stocks higher after the British company reported strong first-half results. Its shares gained 5.8%. Shares of Spanish group Acciona gained 0.1%.

Decliners

Scania fell 0.3%. Spanish construction group ACS confirmed on Thursday night it had raised its holding in domestic utility Iberdrola to 10%, making it the biggest shareholder in the company. ACS fell 0.5%, while Iberdrola lost 2.4%. Endesa fell 0.1% and Eon fell 0.2%.

Corporate news

it was reported in the Spanish press that Jose Manuel Entrecanales, chairman of conglomerate Acciona, was trying to further block the takeover of Spanish power generator Endesa by Eon, of Germany, asking banking group Santander to buy shares in the company.

Oil and gold

Oil prices declined Friday in what was likely a correction following a rise to more than $63 a barrel a day earlier as the market reacted to reports that OPEC may cut production. Light, sweet crude oil for November delivery fell 26 cents to $62.50 a barrel in midmorning Asian electronic trading on the NYME. Brent crude futures for November on London ICE exchange were down 25 cents to $62.29 a barrel.

Gold traded in London at $601.75, down from $604.40 late Thursday. Silver opened in London at $11.50 per troy ounce, down from $11.60.

Currencies

The U.S. dollar was higher against most other major currencies in European trading Friday morning. The euro bought $1.2669, down from $1.2706 late Thursday in New York. The British pound traded at $1.8695, down from $1.8768. The greenback bought 118.00 Japanese yen, up from 117.79.

[R]5:00AM Gold and silver futures continued their climb on physical demand.[/R]
December gold advanced $7.60 to settle at $610.90 a troy ounce on the NYME, while December silver added 3.5 cents to finish at $11.735 an ounce. Meanwhile, October platinum gained $7 to close at $1,146 an ounce, and January platinum settled up $13 at $1,160 an ounce. December palladium added $4.10 to settle at $324.10 an ounce. There was a price decline for copper, however, with the most-active December contracts closing 5.9 cents lower at at $3.4280 per pound.

Light, sweet crude oil for November delivery on the NYME slipped 20 cents to finish at $62.76 a barrel. The October gasoline contract lost 3.88 cents to $1.5011 a gallon, and the October heating oil contract closed 0.03 cent lower at $1.7138 a gallon. November natural gas futures settled 27.7 cents lower at $5.392 per million British thermal units on their first day trading as the spot month on the Nymex.

In sugar trading, October futures on raw sugar in foreign ports settled 0.4 cent higher at 10.55 cents a pound. In coffee trading, December contracts closed 0.60 cent higher at $1.0750 a pound, and March settled 0.60 cent stronger at $1.1135 a pound.