Japan, Falls, South Korea Gains

Ivaylo
12 Apr, 2007
New York City

Asian markets finished mostly in negative territory on Thursday, as export-related stocks declined on worries that slower economic growth in the U.S. could hurt demand for their products, but strong gains and earnings expectations buoyed indexes in China and South Korea to record highs. In Japan, stocks fell after minutes of the last U.S. Federal Open Market Committee meeting, indicating possible new rate hikes.

[R]9:00AM Asian stocks declined on Thursday on weakness in export-related stocks.[/R]
Asian markets ended mostly lower on Thursday. Japanese Nikkei 225 Average closed 0.7% lower at 17,540.42. Export-related stocks were hurt by the FOMC posssible future hikes. Investor reaction led to profit-taking in large-caps, including Sony and Advantest. Sony shed 1.2%, Advantest sank 1.6%, Canon slid 2.1% and Toshiba slipped 0.6%.

The Hong Kong Hang Seng Index lost 0.3% to 20,380.21. Declines in China Mobile and Sinopec pushed the benchmark index lower after five straight days of gains. China Mobile fell 1% after rising 2.5% over the past five sessions. Sinopec fell 2% after gaining 12% over the last six trading days.

South Korean Kospi Index rose 0.8% to 1,525.61. The market closed at a record high, supported by strong gains by shipbuilders and KT&G, surging 3.8% on hopes of a higher share valuation after the company planned share buyback. Among shipbuilders, Hyundai Heavy Industries soared 3.7% and Samsung Heavy Industries rose 1.9%.

Taiwan Weighted Price Index slipped 0.1% to 8,075.20 and Australian S&P/ASX 200 advanced 0.1% to 6,142.80, while the Shanghai Composite Index gained 1% to 3,531.02. Hopes of strong corporate earnings drew more retail investors to stock markets, driving the key stock index to its ninth record close in a row.

[R]8:00AM NY-7:00PM Mumbai Sensex finishes with a loss tracking weak global markets.[/R]
The Sensex on BSE ended 69.43, or 0.53%, lower at 13,113.81. The market-breadth was weak as there were almost three decliners for every two advancers. As 1,090 stocks advanced, 1,466 declined and 74 stocks were unchanged. The turnover on BSE was Rs 3,127 crore compared to Rs 3,952 crore on Wednesday. On NSE, the turnover was Rs 7,078.44 crore, lower than Rs 8,441.09 crore on Wednesday.

Economic news

Jet Airways today cut a deal to buy out Air Sahara for Rs 1,450 crore after clearance by a three-member arbitration panel.

Industrial production advanced 11% in February 2007 from a year earlier, slightly lower than upwardly revised annual growth of 11.4% in January 2007. Manufacturing production, representing more than 75% of industrial output, advanced 12.3% in February from a year earlier, compared with a revised 12.1% annual growth in January.

The GSM subscriber base increased with more than 6.13 million new additional subscribers in March reaching the total base to 121 million. This is the highest ever subscriber addition for the GSM industry since its inception.

Trading highlights

Debutant Orbit Corp was the most-active stock with a turnover of Rs 185 crore followed by Indiabulls Real and Tata Steel.

Advancers

Jet Airways soared over 3% to Rs 629 after the company signed a deal to acquire Air Sahara for Rs 1,450 crore.

Bajaj Auto rallied 3% to Rs 2,349. Infosys surged 2.5% to Rs 2,044. Infosys led gain in IT shares ahead of the announcement of Q4 March 2007 results by the IT large-cap on Friday. Concerns have been raised that the fiscal year 2008 guidance by Infosys may turn out conservative. Satyam Computer also gained 1% to Rs 446.

TCS rose 1.1% to Rs 1,204. Reportedly, Tata Sons is considering a $1 billion-plus overseas equity offering in Tata Consultancy Services to fund acquisitions. The offer may take place in six months and include the sale of new shares.

Grasim gained 1.7% at Rs 2,259. NTPC, Satyam and HLL were up around 1% each at Rs 160, Rs 446 and Rs 207, respectively.

Decliners

Oil exploration large-cap ONGC slumped 3.4% to Rs 853. leading the decliners among 30 Sensex constituents. It will invest over Rs 6700 crore to increase oil and gas output, and establish the first large power plant.

Tata Steel lost 3.2% to Rs 496 on 22.1 lakh shares traded on BSE. Tata Steel announced on Tuesday its board will meet on 17 April 2007, to consider proposals for raising equity funds to finance investment in a special purpose vehicle for the acquisition of steel maker, Corus Group.

ITC dropped 2.7% to Rs 156. HDFC Bank and Hero Honda slipped around 2% each to Rs 958 and Rs 628, respectively. Ranbaxy shed 3% to Rs 335. Ranbaxy Laboratories announced it had received approval from Canadian authorities to sell antibiotic cefprozil tablets and powder in Canada.

Auto shares declined. Car large-cap Maruti Udyog lost 2.9% to Rs 760, Tata Motors lost 1.5% to Rs 710 and Hero Honda shed 1.4% to Rs 631.10.

Banks lost under selling pressure. State Bank of India shed 1.3% to Rs 968.45 and ICICI Bank lost 1.1% to Rs 849. Banking credit growth dropped to 27% in 2006-07 from 29.6% growth a year earlier, as a result of tighter monetary policy since December 2006.

[R]7:00AM European markets were lower on Thursday on a weak US market close overnight.[/R]
European markets were lower on Thursday. By mid morning, Frankfurt Xetra Dax slipped 0.4% to 7,122.27, the CAC 40 in Paris shed 0.5% to 5,720.98 and London FTSE 100 lost 0.4% to 6,390.2. National benchmarks fell in all 18 western European markets.

Advancers

ThyssenKrupp, the German steelmaker, gained 1.8% after saying it expected pre-tax profit growth of at least 4 billion euros in the mid term.

Carrefour, the French retailer, reported after the close on Wednesday a 5.2% rise in first-quarter sales, and reiterated that it may review calls for a sale of some of its property assets. Shares slipped 0.2%.

Carphone Warehouse Group rose 0.5%. Europe largest mobile-phone retailer has withdrawn from the auction for Pipex Communications, a U.K. broadband firm with 600,000 subscribers.

SABMiller gained 1.6% after the brewer of Pilsner Urquell and Miller Lite stated it sold 10% more beer in its past fiscal year, excluding the effects of acquisitions, as demand increased in South America and China.

Decliners

Eiffage, the French construction company, led the decliners on expectations that a large stake in the company will be sold by Spanish rival Sacyr Vallehermoso, which owns 33% of the shares. Eiffage shares fell 6.7%. Shares in Sacyr Vallehermoso fell 2.7% as investors took profits after two days of gains.

DaimlerChrysler dropped 2.2%. Lafarge, the world largest cement maker, decreased 1.3%. The U.S. is the biggest market for Daimler while the Americas account for the second-biggest slice of the sales of Lafarge.

Siemens AG, engineering company, dropped 1.6%. Siemens said the one-month delay for the spinoff of its VDO automotive parts unit won''t have an impact on the planned initial public offering of the division.

Oil and precious metals

Oil rose for a third day as a report that U.S. refineries were raising production spurred expectations demand for crude will grow. Oil for May delivery rose as much as 41 cents, or 0.7%, to $62.42 a barrel in after-hours electronic trading on the New York Mercantile Exchange and traded at $62.36. Brent crude for May settlement rose as much as 35 cents, or 0.5%, to $68.19 a barrel in electronic trading on the ICE Futures exchange in London.

Gold gained on speculation a decline in the dollar against the euro will increase demand for the metal as an alternative investment. Gold for immediate delivery climbed $1.10, or 0.2%, to $678.40 an ounce. Palladium for immediate delivery rose $6, or 1.6%, to $373 an ounce. Silver dropped 3 cents to $13.835 an ounce and platinum advanced $1.50 to $1,269 an ounce.

Currencies

The euro gained slightly on against the dollar on Thursday, trading around two-year highs as the European Central Bank prepared to deliver its verdict on euro-zone interest rates. The euro bought $1.3449 in morning European trading, up from $1.3427 in New York late Wednesday. The British pound fell slightly to $1.9744 from $1.9753, while the dollar rose to 119.42 Japanese yen from 119.30 yen.

[R]5:00AM Copper continues its upper trend, gold and silver end unchanged.[/R]
The most-active May copper advanced 5.65 cents to end at $3.5825 per pound on the New York Mercantile Exchange. June gold added 20 cents to $681.70 a troy ounce, while May silver shed 4 cents to $13.89 an ounce. July platinum advanced $7.70 to $1,281.30 an ounce, while June palladium gained $6.10 to $369.55 an ounce.

May crude oil futures climbed 12 cents to finish at $62.01 a barrel, after reaching an intraday high of $62.56 a barrel. June crude lost 4 cents to $64.84 a barrel. May gasoline futures advanced 3.57 cents to end at $2.1587 a gallon, an eight-month high, after hitting $2.1700 a gallon Wednesday. May heating oil added 1.86 cents to settle $1.8747 a gallon. Front-month May gas futures closed 1.4 cents lower at $7.855 a million British thermal units.

Arabica coffee futures settled slightly higher in range-trading. May coffee ended 0.20 cents higher at $1.0945 a pound, while July coffee settled 0.20 cents stronger at $1.1235 a pound. May corn finished 8.25 cents lower at $3.6075 a bushel, July corn closed 8.5 cents lower at $3.7275 a bushel, and December corn settled 6.75 cents lower at $3.8775 a bushel.