Japan Leads Asian Rally

Ivaylo
26 Apr, 2007
New York City

Asian markets ended higher across the region Thursday, as Japanese market continued its upward trend with Sony rising on reports it will soon list its financial unit, while Kyocera advanced on its earnings report. Markets in China, South Korea and Indonesia all closed at new records. HK also advanced.

[R]9:00AM Asian markets finish higher Thursday with Japan leading gainers.[/R]
Asian markets ended higher on Thursday. The 225-issue Nikkei Average closed 1.1% higher at 17,429.17. Sony rose 0.9% after reports that the electronics company will raise up to 300 billion yen by taking Sony Financial Holdings public. Electronics maker Kyocera advanced 2.1% ahead of its earnings release, while silicon-wafer maker Shin-Etsu Chemical surged 4.3%, ahead of its earnings Friday. Honda Motor gained 1.8% after the auto maker reported upbeat quarterly earnings growth.

In Hong Kong, the benchmark index Hang Seng Index ended up 0.6% at 20,667.29. Shares of China Molybdenum leaped 68% above their initial offer price in debut Hong Kong trading, as investors bought stakes in the specialty metal miner. Shares of Industrial & Commercial Bank of China rose 2% after posting quarterly results that topped expectations.

Taiwan Weighted Price Index gained 0.2% to finish at 8,000.04. Leading gains in Taiwan was Hon Hai Precision Industry which rose 1.6% on hopes of improved earnings at the contract-electronics manufacturer after Apple Computer reported second-quarter earnings rose 88% on year. Hon Hai makes iPods for Apple.

China Shanghai Composite Index added 1% to close at 3,783.06 and Australian S&P/ASX 200 ended up 0.4% at 6,212.20. South Korean Kospi index added 0.5% to close at 1,553.13.

[R]8:00AM NY-7:00PM Mumbai Sensex finishes marginally higher on April derivatives expiry.[/R]

The Sensex on BSE finished 11.11 points, or 0.08%, higher at 14,228.88.

The Sensex traded within a range of 256.54 points today. The market-breadth was weak as there were almost three decliners for every two gainers. As 1,049 stocks advanced, 1,482 declined and only 79 stocks remained unchanged. Of the 30 stocks in the Sensex, 15 advanced, while the other 15 declined. The turnover on BSE was Rs 4,465 crore, lower than Rs 5,200.34 crore on Wednesday. On NSE, the turnover was Rs 11,830.93 crore, higher than Rs 11,078.22 crore on Wednesday.

Economic news

The rupee hit a 9-year high against the dollar on Thursday, its fourth in a row, and traders anticipated further gains despite the possibility that RBI might intervene to limit its momentum. In early trading, the rupee was at 40.74 per dollar, advancing from close of 40.90 on Wednesday.

Bandwidth costs and internet access charges might be significantly reduced soon with BSNL and MTNL planning to host web servers within the country by the middle of this year. Telecom Minister Dayanidhi Maran today announced that these state companies would set up web servers, which will enable the internet traffic to be diverted within India instead of being routed out of the country.

The wholesale price inflation rate in India is forecast at 6.09% for the 12 months to 14 April 2007, unchanged from a week earlier. The data will be released around noon on Friday.

Trading highlights

Reliance Industries was the most-active stock with a turnover of Rs 307 crore followed by Indiabulls Real Estate and Orbit Corp.

Advancers

Bajaj Auto and Grasim rallied over 2% each to Rs 2,491 and Rs 2,495, respectively. Grasim had risen 3.5% in early trade to Rs 2,529, supported by strong fourth-quarter results in fiscal 2007, which the company unveiled after trading hours on Wednesday. Grasim reported 80.5% growth in net profit and net sales surging 36.2%.

Some IT large-caps neglected the surge of the rupee, which generally has a negative impact on them.. Wipro gained 1.3% to Rs 563 and TCS rose 1.5% to Rs 1,240. Refinery stocks also advanced. HPCL rose 3.6% to Rs 271.85, Indian Oil Corporation gained 4.3% to Rs 431 and BPCL advanced 2.9% to Rs 338.10. Hindustan Lever and TCS surged over 1.5% each to Rs 215 and Rs 1,240, respectively.

Decliners

Tata Steel led the decliners, dipping nearly 2% to Rs 560. Satyam declined 1.3 to Rs 460, while ONGC also lost 1.3% to Rs 960 on profit-taking. ICICI Bank shed 0.5% to Rs 957 as 3.4 lakh shares were traded on BSE.

Index heavy Reliance Industries dropped 0.2% to Rs 1,599. Reliance had gained 1.5% in early trade, to a record high of Rs 1,624.80. Reliance unveils fourth-quarter results today. Analysts expect between 2.8% to 9.9% growth in net profit in, between Rs 2571.30 crore and Rs 2749.50 crore, compared to Rs 2,502 crore a year earlier.

[R]6:30AM European markets rise Thursday on strong earnings reports[/R]
European markets were higher on Thursday. The German DAX Xetra 30 index rose over the 7,400 level, up 0.8% at 7,401.89, and the French CAC-40 index was up 0.4% at 5,971.88, while the U.K. FTSE 100 index gained 0.6% at 6,498.10. National benchmarks rose in all of the 17 western European markets that were open.

Advancers

ABB led the advancers, up 5.8% in Switzerland after the Swiss-Swedish engineering firm, announced its first-quarter profit more than doubled to a stronger-than-forecast $537 million from $204 million, with revenue up 21% to $6.21 billion and orders up 26% to $8.64 billion.

German pharmaceutical company Bayer rose 3.7% after the company reported an above-forecast increase in first-quarter net profit to 2.8 billion euros, from 600 million euros a year ago.

France Telecom gained 2.9% after it reported that its first-quarter sales rose 1.8% to 12.8 billion euros. France Telecom said its gross operating margin increased to 36.3% from 36.2% on cost controls and confirmed its objectives for 2007.

German chemicals company BASF added 1.8% after its first-quarter profit climbed a better-than-forecast 9% to 1.04 billion euros, with sales up 16% to 14.63 billion euros.

German industrial company Siemens rose 1% after early losses. The company unveiled new financial targets, targeting a return on capital employed between 14% and 16% by 2010, up from the 10% achieved in fiscal 2006.

Decliners

Ericsson declined 0.4% after it announced that its first-quarter net income rose 27%, just below analyst forecasts. UBS downgraded the stock to neutral.

Electrolux sank 5.9%. The second-largest household appliances maker in the world said North American sales declined and raw-materials costs will erode full-year profit.

Oil and precious metals

Gold and silver were little changed after recovering from earlier losses on speculation the dollar may fall to a record low against the euro. Gold for immediate delivery fell $2.20, or 0.3%, to $684.05 an ounce. Silver for immediate delivery fell 3 cents, or 0.3%, to $13.77 an ounce.

Crude oil fell after Iran said it was making progress in talks with the European Union on Iranian nuclear research, while some analysts predicted supplies of crude could meet demand for gasoline during the coming summer. Crude oil for June delivery fell 33 cents, or 0.5%, to $65.51 a barrel in after-hours electronic trading on the New York Mercantile Exchange and stood at $65.61 in morning trading in London. Brent crude for June settlement fell 33 cents, or 0.5%, to $68.24 on the ICE Futures exchange.

Currencies

The dollar rose against other major currencies in morning European trading Thursday. The euro traded at $1.3614, down from $1.3636 late Wednesday in New York. The British pound traded at $2.0002, down from $2.0012. The dollar fetched 119.11 Japanese yen, up from 118.71.

[R]5:00AM Copper rallied on Wednesday, while gold and silver were steady.[/R]
The most-active July copper contract advanced 4.15 cents to end at $3.6055 per pound on the New York Mercantile Exchange. June gold finished down 30 cents at $687.40 a troy ounce, while July silver closed down 1.9 cents at $13.897. July platinum settled up $5.70 at $1,317.20 an ounce and June palladium gained $4.05 to end at $383.05.

Crude oil futures advanced above $65.00 while gasoline futures surged to an eight-and-a-half month high after the Department of Energy reported a large drop in gasoline stockpiles. The June crude oil contract ended up $1.26 at $65.84 a barrel. May gasoline finished also up 7.37 cents at $2.2826 a gallon. May heating oil settled up 5.55 cents at $1.9015 a gallon. April natural gas rose 9.1 cents to close at $7.689 per million British thermal units.

On the New York Board of Trade, the May Arabica coffee contract declined 0.05 cent at $1.0435 a pound, with July off 0.40 cent at $1.0725. On the Chicago Board of Trade, May corn ended 10.75 cents higher to $3.7125 per bushel, July advanced 10.50 cents to $3.8175, and December settled 7 cents higher at $3.7950.