Asia Declines, China Keeps Gaining

Ivaylo
05 Apr, 2007
New York City

Asian markets closed mostly lower on Thursday, as Japanese Nikkei average ended lower as investors booked profits on large-cap stocks. Chinese stocks, however, hit a fourth straight record, while Singapore reached new highs for a second session. Markets in Hong Kong, Taiwan and Philippines were closed for a public holiday.

[R]9:00AM Asian markets finished mostly lower with Japan leading the region lower.[/R]
Asian markets ended lower on Thursday. Japanese Nikkei 225 average closed 0.3% lower at 17,491.42. Oil company Inpex Holdings dipped along with other energy-related shares as crude-oil prices declined below $65 a barrel in the wake of the resolution of the U.K.-Iran crisis. Shares of Inpex shed 2.8% in Tokyo. Among export-related shares, Honda fell 1.4%, while Toyota Motor eased 1.1% in Tokyo.

Hitachi Construction Machinery advanced 1.6% as the company is on track to pay a higher year-end dividend for the business year beginning April 1 than its planned dividend for the just-completed fiscal year.

Chinaese benchmark Shanghai Composite Index gained 0.8% to 3,319.14. Singaporean shares hit a second straight record high on buying in select market large-cap on strong earnings expectations. The benchmark Straits Times Index ended up 12.94 points, or 0.4%, at a record 3345.86 points.

Australian S&P/ASX 200 lost 0.3% to settle at 6,077.10 and South Korean Kospi index closed 0.1% lower at 1,482.04. In Australia, shares of Coles Group advanced 1%, extending sharp gains from the previous session, on speculation it could become the target of bidding war after Wesfarmers came forward with a $16 billion takeover offer

[R]8:00AM NY-7:00PM Mumbai Sensex ends with a slight gain Thursday, inflation tame.[/R]
The Sensex on BSE finished 69.31 points, or 0.54%, higher at 12,856.08. The market-breadth was strong as there were two gainers for each decliner. For 1,658 stocks that advanced, 853 declined and 67 remained unchanged. Of the 30 stocks in the Sensex 18 advanced, while the rest declined. The turnover on BSE was Rs 3,169 crore, compared with Rs 3,230.85 on Wednesday. On NSE, the turnover was Rs 6,946.16 crore, compared with Rs 6,971.64 crore on Wednesday.

Economic news

The wholesale price index in India advanced 6.39% in the 12 months to 24 March, down from the increase in the previous week of 6.46 but slightly above a forecast of 6.29%.

The group of ministers on special economic zones, which met today, decided to end compulsory land acquisition by state governments for special economic zones and limited their size to 5,000 hectares. The ministers also cleared 83 special economic zones with no disputes and increased their processing area to 50% of the land size.

The largest commercial bank in India, State Bank of India, intends to raise its interest rates next week tracking the RBI move to lift the cash reserve ratio and a key rate last Friday.

Telecom regulator TRAI ruled out mandatory sharing of infrastructure among mobile operators, proposing instead allowing active networks like antennae, feeder, cables and transmission equipments to be shared among them.

Trading highlights

Indiabulls Real Estate was the most-active stock with a turnover of Rs 176 crore followed by MindTree and IFCI.

Advancers

Tata Steel led the advancers, soaring over 6% to Rs 465 as steel companies have hiked product prices. Tata Steel crude steel production for the year 2006-07, crossed 5 million tons. The production of hot metal touched 5.55 million tons, crude steel at 5.05 million tons and saleable steel at 4.93 million tons. Reliance Energy surged 2.7% to Rs 501.

The cement sector advanced after dropping on Wednesday, as buying was intense at lower levels. The fall came after the government announced a reduction in import duties. Today Grasim rallied 2.4% to Rs 2,113. Gujarat Ambuja Cements was up 1.10% to Rs 106.10, ACC added 1.06% to Rs 722, and UltraTech Cement Company ended up 2.26% to Rs 693.

ICICI Bank and HDFC advanced over 2% each to Rs 839 and Rs 1,530, respectively, while HDFC Bank gained almost 2% at Rs 943. Cipla advanced nearly 1.5% at Rs 233. Maruti, Hindalco and SBI added 1.3% each to Rs 756, Rs 132 and Rs 948, respectively.

Decliners

Dr.Reddy''s led the decliners, down 2% to Rs 729. Hero Honda shed 1.8% to Rs 632, and NTPC dropped 1.4% to Rs 159. NTPC posted a net profit of Rs 6,726.4 crore in 2006-07 as against Rs 5,820.2 crore in the previous fiscal, an increase of 15.57%. Index heavy Reliance Industries was down 0.4% to Rs 1,257.55 on 3.50 lakh shares. It moved in a range of Rs 1,368.90 –1,353.10.

[R]6:30AM European stocks were lower despite merger and acquisition speculation.[/R]
European markets were lower on Thursday. By mid-morning, Frankfurt Xetra Dax was flat at 7,076.62, the CAC 40 in Paris lost 0.2% to 5,730.12 and London FTSE 100 was flat at 6,363.4. National benchmarks fell in 13 of the 15 markets in western Europe that were open.

Advancers

Safran SA curbed declines today after it was reported the company and Thales SA, Europe largest defense-electronics company, may revive plans to merge. Safran gained 4%, while Thales was 0.3% higher.

Takeover talk lifted French construction group Eiffage 0.8% after Spanish rival Sacyr Vallehermoso, recently linked to an Eiffage bid, announced it was increasing its stake closer to the one-third level that would trigger a mandatory takeover bid.

Air France-KLM Group advanced 3.7%. Europe biggest airline may join Aeroflot and UniCredit in bidding for a stake in Alitalia, even though the deadline for new bidders has passed, as stated by Italian Industry Minister Periluigi Bersani.

Decliners

Volvo fell 3.2 % after chief executive Leif Johansson stated acquisitions would continue to make up half of the targeted 10 % annual growth of the company.

BHP Billiton, the world largest mining company, decreased 0.6%. China is the second-biggest market after Europe for the company. Anglo American, the second-largest, shed 0.6%. Antofagasta, which owns three copper mines in Chile, fell 1.5%.

Scottish & Newcastle lost 1.2% and shares of the largest brewer in theU.K were cut to sell from hold at ING Groep NV and downgraded to reduce from hold at Dresdner Kleinwort.

Oil and gold

Crude oil was little changed near a one-week low in New York after Iran released 15 British navy personnel, easing concern that supply from the Middle East may be disrupted. Crude oil for May delivery was at $64.35 a barrel, down 3 cents, in after-hours electronic trading on the New York Mercantile Exchange. In London, Brent crude for May settlement was at $68.55 a barrel, up 15 cents, in electronic trading on the ICE Futures exchange.

Gold was unchanged in London and traded at $672.60 per troy ounce, unchanged from late Wednesday. Silver opened in London at $13.56 per troy ounce, up from $13.52.

Currencies

The dollar was mostly higher against other major currencies in European trading Thursday morning. The euro traded at $1.3360, down from $1.3367 late Wednesday. The British pound traded at $1.9736, down from $1.9753. The dollar bought 118.74 Japanese yen, up from 118.67.

[R]5:30AM Copper ended higher Wednesday, while gold surged, as did silver.[/R]
The most-active May copper contract gained 7.3 cents to end at $3.3875 per pound on the New York Mercantile Exchange. June gold advanced $7.70 to settle at $677.40 a troy ounce, and May silver gained 19 cents to close at $13.62 an ounce. July platinum added $6.60 to finish at $1,258.90 an ounce, but June palladium fell $1.60 to settle at $354.15 an ounce.

In Nymex energy trading, crude oil prices declined after Iranian President Mahmoud Ahmadinejad announced his country will release the sailors and marines. The front-month May crude oil contract settled 26 cents lower at $64.38 a barrel. May gasoline rose 8.77 cents to finish at $2.1054 a gallon. May heating oil advanced 2.57 cents to close at $1.8644 a gallon. Natural gas for May delivery ended 8.9 cents higher at $7.515 a million British thermal units.

On the Chicago Board of Trade, corn futures rebounded after the sharp decline in the last few days. May corn surged 13 cents to finish at $3.5925 a bushel. May Arabica coffee futures finished 0.20 cents lower at $1.1055 a pound.