Japan Edges Higher, HK Slips

Ivaylo
23 Apr, 2007
New York City

Asian markets ended mostly higher on Monday, with Japan finishing slightly higher and Hong Kong closing a bit lower, while China soared on expectations that stock-index futures will be launched soon. Tokyo trading was relatively quiet as pessimism about corporate-earnings expectations for this fiscal year by Japanese companies countered earlier gains. Steel producer Posco led South Korean shares higher.

[R]9:00AM Asian stocks finished higher Monday with Japan ending slightly higher.[/R]
Asian markets finished mostly higher on Monday. The Nikkei 225 gained 0.02% to 17,455.37. Hoya, a tech company to report its earnings during the current earnings period, closed down 3.4%. The results were not disappointing but investors thought they were not strong enough to spark new buying incentives. Komatsu soared 4.8% after Caterpillar reported Friday better-than-expected quarterly earnings and lifted its outlook for 2007. Tokyo Star Bank gained 4.2% after reports that Lone Star Group is gearing to sell possibly its entire 67% stake in the bank.

In Hong Kong, Hang Seng Index shed 0.05% to close at 20,556.57. China Mobile and HSBC, traded in the opposite direction to each other Monday. China Mobile fell 2.8% after it reported its first-quarter results after Friday market close. HSBC continued its upward trend on a report that Saudi Arabia-based investor Maan al-Sanea, the second-largest shareholder in the bank, is considering boosting his stake in the bank. HSBC gained 0.3%.

The Korea Composite Stock Price Index, or Kospi, closed up 0.7% at 1,544.35, after hitting a new intraday high of 1,554.50 during the session. Posco, the world third-largest steelmaker by output, continued gaining, ending 3.6% higher. Heavy-equipment maker Doosan Infracore surged 5.7% and Doosan Heavy Industries & Construction, which owns 40% of Infracore, rose 2.8%. Hyundai Heavy Industries, of which the heavy equipment business accounts for about 10% of its total revenue, gained 4.9%.

The Shanghai Composite Index ended up 3.5% at a record 3,710.89. In large caps, China United Telecommunications soared 6.4%, Air China rose 9.1% and Baoshan Iron & Steel gained 5.4%. Taiwan shares ended 0.9% higher at 8,010.46 in light volume.

[R]8:00AM NY-7:00PM Mumbai Sensex finishes higher Monday, Tata Steel rallies.[/R]

The Sensex on BSE finished 30,92 points, or 0.22%, higher, at 13,928.33.

The market-breadth was negative as 1,384 stocks declined, while 1,163 advanced and 83 remained unchanged. Of the 30 stocks in the Sensex, 16 advanced, 13 declined and one stock was unchanged. The turnover on BSE was Rs 3,287 crore, lower than Rs 4,321.46 crore on Friday. On NSE, the turnover was Rs 7,695.31 crore, also lower than Rs 8,857.73 crore on Friday.

Economic news

Arcelor Mittal, the largest steel manufacturer in the world, has received approval from the US and Mexican competition authorities to acquire Sicartsa from Grupo Villacero for $1.43 billion, about Rs 6,006 crore. Sicartsa is a fully integrated producer of long steel, with an annual production capacity of about 2.7 million tons and estimated iron ore reserves of 160 million tons.

Suggesting further tightening of the credit policy, the Reserve Bank today decided to suspend measures announced in October 2006 for greater liberalisation of inflow of External Commercial Borrowings.

M&A

British banking company Barclays will add thousands of new employees to its India subsidiaries following the takeover of its Dutch rival ABN Amro in a cash-and-stock deal valued at over $90 billion. While the number of new jobs have not been disclosed, reports suggest that the figure could be at anywhere between 8,000 and 10,000 jobs.

Trading highlights

Gujarat Ambuja was the most active stock with a turnover of Rs 349 crore followed by Tata Steel and Unitech. Three huge block deals of 93.21 lakh shares each, at an average Rs 116.05 per share, traded in the Gujarat Ambuja Cements stock on BSE, contributed to the high turnover of the market.

Advancers

Tat Steel led the advancers, surging over 4% to Rs 558. It had advanced to a high of Rs 560, in intra-day trade. Reliance Communications advanced on expectations of robust earnings growth, powered by a strong increase in the subscriber base and an increased penetration of value-added services. Reliance Communications was up nearly 2% at Rs 465 and Reliance Energy gained over 2% to Rs 523.

ONGC gained over 1% to Rs 933. HDFC also gained over 1% to Rs 1,670. Satyam added nearly 1% to Rs 481. Infosys also advanced 0.6% to settle at Rs 2,067. Reliance Industries gained on last-minute buying closing 0.8% up at Rs 1,554.

Decliners

Cigarette large-cap ITC led the decliners, down 2.6% to Rs 156, on volumes of 17.18 lakh shares. It had also hit a low of Rs 154.85. Hindustan Lever slipped 1.6% to Rs 202. Bajaj Auto lost over 1% to Rs 2,409. Maruti also slipped 1.2% to Rs 767.4 and Tata Motors dipped 0.7% to Rs 717.8.

Banks declined, ahead of the Reserve Bank of India monetary policy meeting tomorrow. SBI lost 1.4% to Rs 1,060, HDFC Bank dipped 0.7% to Rs 987.4 and ICICI Bank was off 0.2% to Rs 913.

Pharmaceutical large-cap Ranbaxy Laboratories lost 0.4% to Rs 342.05, after investing more than $20 million in the Romanian subsidiary, Terapia Ranbaxy, in an attempt to make the subsidiary part of its strategy to expand into Europe and the Commonwealth of Independent States.

[R]6:30AM European shares advance Monday on ABN Amro M&A[/R]
European markets advanced on Monday. The German DAX Xetra 30 index rose 0.1% at 7,347.57, the U.K. FTSE 100 index rose 0.1% at 6,492.70 and the French CAC-40 index increased 0.2% at 5,949.47, a morning after the first round of the French presidential election.

Advancers

ABN Amro, a Dutch bank, gained 1.7% after it agreed to the largest-ever banking takeover from the Barclays worth around 67 billion euros, or $91.2 billion. Scottish & Newcastle shares rose 2.4% after reports that SABMiller and Diageo held detailed talks about a joint bid for the U.K. brewer. Novartis added to pharmaceutical sector earnings news. Its shares rose 1.8% after it announced that its first-quarter net income rose 11% to $2.17 billion, with sales up 18% to $9.82 billion.

Food company Nestle also held to its fiscal year earnings guidance on Monday. Shares rose 1.7% after Nestle said that it is still expecting organic growth of between 5% and 6% this year, with improved constant currency earnings before interest and tax margins for the fiscal year.

In the auto sector, BMW shares rose 2.5% after J.P. Morgan upgraded the company to overweight from neutral on Monday. Peugeot also rose 0.8% after reports that the French automaker could be planning to restructure in France after the presidential election, a move that could affect around 10,000 jobs.

Decliners

Barclays dropped 1.7 % after the bank bid for the Dutch bank. AstraZeneca lost 1.4 %. The maker of the Nexium ulcer medicine agreed to buy MedImmune to gain flu vaccines and an antiviral medication for babies. Societe Generale SA declined 2 % after second-biggest bank by market value in France denied it was in merger talks on April 20.

Oil and precious metals

Crude oil advanced on concern supplies from Nigeria will be disrupted just as demand for gasoline is surging. Crude oil for June delivery rose 42 cents, or 0.7 %, to $64.53 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Brent crude oil for June gained 86 cents, or 1.3 %, to $67.35 a barrel in electronic trading on the ICE Futures exchange.

Gold fell from an 11-month high after the dollar advanced against the euro, denting investor demand for the precious metal as an alternative investment. Silver also declined. Gold for immediate delivery dropped $1.60, or 0.2 %, to $690.35 an ounce. Silver declined 4.5 cents to $13.895 an ounce. Palladium for immediate delivery fell 50 cents to $384.50 and platinum dropped $4 to $1,324 an ounce.

Currencies

The U.S. dollar was mostly higher against other major currencies in European trading Monday morning. The euro traded at $1.3562, down from $1.3601 late Friday in New York. The British pound traded at $1.9986, down from $2.0036. The dollar fetched 118.44 Japanese yen, down from 118.74.

[R]5:30AM Gold and other precious metals rally Friday on new buying interest.[/R]
June gold advanced $7.50 to finish at $695.80 a troy ounce on the New York Mercantile Exchange. July platinum surged $31.40 to $1,341.20 an ounce, May silver rose 22 cents to $13.955 an ounce, and June palladium added $8.25 to $388.25 an ounce. In trading of base metals, May copper contract rose 2.4 cents to settle at $3.6105 per pound.

The May crude oil contract gained $1.55 to end at $63.38 a barrel before expiring. May gasoline futures jumped 4.86 cents to $2.1374 a gallon, and May heating oil added 2.67 cents to $1.8325 a gallon. Natural gas for May delivery ended 11.1 cents lower at $7.381 per million British thermal units

On the New York Board of Trade, Arabica coffee futures plunged, ending 0.80 cents lower at $1.0770 a pound. Futures on raw sugar in foreign ports closed weaker on trade-house selling and speculator sales.. May sugar ended 0.03 cents lower at 9.52 cents a pound, and July sugar finished 0.04 cents weaker at 9.49 cents a pound.