Japan Slips on Oil Concerns, HK Rises

Ivaylo
24 Apr, 2007
New York City

Asian markets closed mixed on Tuesday, with Japan edging lower on worries over increasing oil prices, while Hong Kong closing a bit higher on advances in the property sector. Crude-oil prices sent shares lower earlier in the day as investors worried about how higher motor-fuel costs might affect consumer spending in the U.S. China, South Korea and Taiwan finished also higher, while Australia ended lower.

[R]9:00AM Asian markets finish mixed with Japan lower and HK higher.[/R]
Asian markets finished mixed on Tuesday. Tokyo Nikkei 225 index swung from positive territory, to end 0.02% lower at 17,451.77. Toyota Motor declined 0.5%, having announced Tuesday that it overtook General Motors as the world top auto maker in the first three months of the year.

Mitsui & Co. announced it has sold its 51% stake in Indian iron ore mining company Sesa Goa to London-based Vedanta Resources for $981 million. The Tokyo-based trading company also stated it will book a profit of 50 billion yen. Nissan Motor said an early-retirement program has been approved at the company as the Japanese auto maker moves to revive its earnings growth. Nissan shares rose 0.7%.

Hong Kong Hang Seng Index closed 0.08% higher to 2,0572.80, while the Shanghai Composite added 0.26% to 3,720.53. In Hong Kong, property stocks advanced while China Life outperformed on a report it may bring in a strategic investor. In the property sector, Cheung Kong gained 1%, Henderson Land finished 0.2% higher, and New World Development added 1.8%.The finance sector declined. HSBC ended 0.3% lower, China Construction Bank fell 0.4% and Bank of China ended 0.8% lower.

South Korean benchmark index, Kospi, rose 0.8% to end at 1,556.71 and Taiwan Weighted Index settled up 0.43% to 8,045.01. Australian S&P/ASX 200 finished down 0.34% to 6,188.20.

[R]8:00AM NY-7:00PM Mumbai Sensex rallies on RBI decision not to hike the rates.[/R]

The Sensex on BSE finished 208.39, or 1.50%, higher at 14,136.72.

The market-breadth finished almost even as 1,274 stocks advanced, while 1,279 stocks declined and 75 stocks remained unchanged. Of the 30 stocks in the Sensex, 22 advanced, while the rest declined. The turnover on BSE was Rs 5,104 crore, compared to Rs 4,098 crore on Monday. On NSE, the turnover was Rs 10,897.9 crore, much higher than Rs 7,695.31 crore on Monday.

Economic news

Reserve Bank of India Governor Y.V. Reddy announced a Credit Policy that is expected to put inflation under control and sustain growth. The Reserve Bank lowered the growth forecast for 2007-08 to 8.5% and promised to keep the inflation close to 5%. The bank also stated that risk weight on the residential housing loans to individuals would be reduced to 505 from 75% as a temporary measure. This policy would be applicable to loans up to Rs 20 lakhs and will be reviewed after one year. RBI kept bank rate unchanged at 6%, short term repo rate at 7.75% and cash reserve ratio at 6.5%.

The rupee continued to advance against the US dollar and hit 41.49 a dollar in late morning deals at the Interbank Foreign Exchange market. The market attributed the increase in rupee to sustained capital inflows in the economy of India.

Trading highlights

Tata Steel was the most active stock with a turnover of Rs 241 crore followed by Indiabulls Real Estate and SBI.

Advancers

Banks led the rally, surging on the RBI decision to hold rates steady. SBI was the best performing stock, surging nearly 7% to Rs 1,133. ICICI Bank gained 3.7% to Rs 950, and HDFC Bank moved up 2.6% to Rs 1,014.

Auto stocks finished also strong today. Maruti added 3.5% to Rs 794. Maruti Udyog gained in volatility trading in the afternoon, when it announced fourth-quarter March 2007 results. The stock surged 4.3% to Rs 801. The company today reported 24% growth in net profit in fourth-quarter March 2007, at Rs 449 crore against Rs 361 crore a year ago. Tata Motors was also up 3.5% at Rs 743 and Bajaj Auto gained 1.7% at Rs 2,449.

Bharti Airtel gained 4% to Rs 875. The company on Monday announced the pan-India launch of comprehensive telecom and networking solutions for small and medium businesses. Index heavy Reliance Industries rose nearly 1.7% to Rs 1,580. ONGC also gained 1.7% to Rs 949.

Tata Steel kept gaining, as investors neglected equity dilution concerns and instead concentrated on the attractive price of its rights issue. Tata Steel finished 3.9% to Rs 579 and Hindustan Lever ended up over 2% at Rs 207.

Gujarat Ambuja Cements gained nearly 4% to Rs 119.40 and ACC rose 2.4% to Rs 816.. Holcim, the second-biggest cement maker in the world, has lifted its stake in Gujarat Ambuja Cements to nearly 30% in a deal worth approximately Rs 322 crore.

Decliners

IT stocks closed lower as the rupee hit a new high of around 41.50 per dollar today. Wipro declined over 2% to Rs 554. While TCS declined 1.6% to Rs 1,226, Satyam slipped 1% to Rs 475, Infosys was down 0.5% at Rs 2,058.

[R]6:30AM European markets fall Tuesday led by Spanish index Ibex.[/R]
European markets were lower on Tuesday. In Paris, the CAC 40 fell 0.6% to 5,878.52, Frankfurt Xetra Dax lost 0.9% to 7,268.35 and London FTSE 100 shed 0.7% to 6,437.1. National benchmarks fell in all 18 western European markets.

Advancers

Akzo Nobel, the Dutch chemicals group, rose 3.7% after reporting an 18.4% rise in operating profit, on growth in its Chinese operations. The company announced a 1.6 billion euros share buyback for May.

Decliners

The real estate sector was under pressure. Spanish group Astroc fell 13.3%, having lost around 60% in the previous three sessions on rumours some of its major shareholders were about to sell. Other companies dipped in sympathy. Inmocaral fell 10.2% while Metrovacesa shed 4.4%.

Among the construction groups, Sacyr Vallehermoso slipped 8.3%, FCC lost 4.6%, Acciona slid 4.2% and ACS slipped 3.8%.

Alcatel-Lucent dropped 1.5%. The company had a first-quarter operating loss of about 260 million euros, or $353 million, as sales fell in the wireless and traditional network units.

Shares of Yell Group tumbled 19% after the publisher said its U.S. revenue growth will slow this year as competition intensifies.

AstraZeneca fell 2.6%. The maker of the Nexium ulcer treatment has lined up $15 billion of loans to fund the proposed acquisition of U.S. biotechnology company MedImmune Inc. ING cut its recommendation on the stock to reduce from hold.

Oil and precious metals

Crude oil was little changed, trading near a three-week high in New York. Crude oil for June fell 13 cents to $65.76 a barrel in after-hours electronic trading on the New York Mercantile Exchange in early trade in London. Brent crude oil for June settlement gained 18 cents to $68.32 a barrel in electronic trading on the ICE Futures exchange in London.

Gold and silver rose, erasing earlier declines. Gold for immediate delivery advanced 95 cents to $690.10 an ounce, after falling to $3.45. Silver gained 4 cents to $14.06. Earlier, it dropped 10 cents. Palladium for immediate delivery fell $1.50 to $382.50 and platinum increased $5.75 to $1,330.

Currencies

The dollar was mixed against other major currencies in European trading Tuesday morning. The euro traded at $1.3560, down from $1.3573 late Monday in New York. The British pound traded at $1.9980, down from $2.0012. The dollar fetched 118.76 Japanese yen, up from 118.60.

[R]5:00AM Arabica coffee and raw sugar dip Monday, gold and silver finish mixed.[/R]
The May Arabica coffee contract closed down 1.35 cents at $1.0635 a pound, with July off 1.25 cents at $1.0940. The May raw sugar contract settled down 0.19 cent at 9.33 cents a pound, with July off 0.25 cent at 9.24 cents.

June gold fell $1.60 to $694.20 a troy ounce on the New York Mercantile Exchange, while May silver gained 9.5 cents to $14.05 an ounce. July platinum shed $9.50 to $1,331.70 an ounce, while June palladium lost 85 cents to $387.40 an ounce. The most-active July copper contract added 2.45 cents to settle at $3.6455 per pound.

The front-month June crude oil ended up $1.78 at $65.89 a barrel, after hitting $65.96. Front-month May gasoline settled up 5.33 cents at $2.1907 a gallon, while May heating oil closed up 6.18 cents at $1.8943 a gallon. May natural gas finished up 18.1 cents at $7.562 per million British thermal units.