HK, Australia Lead Asia Higher

Ivaylo
04 May, 2007
New York City

Asian markets finished mostly higher, buoyed by the record close on U.S. market overnight. Gains in property stocks saw Hong Kong benchmark index rise for the third-straight session, while in Australia, the market surged to record highs on solid gains from the large-cap miners and on an improved inflation outlook. South Korea edhed higher.

[R]8:30AM Asian market closes mostly higher with HK, Australia leading gainers.[/R]

Asian markets finished mostly higher. Markets in Japan and China were closed for public holidays. In Hong Kong, the benchmark Hang Seng Index gained 159.50 points, or 0.8%, to 20,841.08.

Henderson Land rallied 6.8% after gaining 7% Thursday, fueling its advance to overcome Hang Lung Properties as the third-largest developer in terms of market capitalization in the city. Other property stocks also gained. Cheung Kong advanced 2.9%, Sun Hung Kai Properties rose 1.8% and Sino Land finished 4.7% higher.

In Australia, the benchmark S&P/ASX200 index rose 59.3 points, or 1%, to a record 6,304.9. BHP Billiton, the largest miner in the world, gained 2.4%, while Rio Tinto surged 4.6%. Also on Friday, the Reserve Bank of Australia decreased its inflation forecast for the rest of 2007 from 2.75% to 2.5% on stable oil prices and a higher exchange rate.

The Korea Composite Stock Price Index, or Kospi, in South Korea, ended up 7.88 points, or 0.5%, at 1,567.74. Kia Motors, which posted an unexpected first-quarter loss during the session, ended up 0.5%.

Taiwan shares surged on optimism about robust quarterly earnings. The Weighted Price Index of the Taiwan Stock Exchange gained 133.11 points, or 1.7%, to close at 8,059.77.

[R]8:00AM NY-7:00PM Mumbai Sensex ends lower Friday on weakness in Reliance Industries.[/R]

The Sensex on BSE finished 142.94 points, or 1.02%, lower at 13,934.27.

The market-breadth was negative as there were almost three decliners for every two advancers. As 1,453 stocks declined, 1,130 advanced and only 84 stocks remained unchanged. Of the 30 stocks in the Sensex, nine advanced, while the rest declined. The turnover on BSE was Rs 4,246 crore, slightly lower than Rs 4,432.11 crore on Thursday. On NSE, the turnover was Rs 9,399.66 crore, almost unchanged from Rs 9,326.83 crore on Thursday.

Economic news

The wholesale price index decreased to 5.77% for the week ended April 21, lower than 6.09% the previous week. Finance Minister P Chidambaram announced that the government will work on policy measures and will increase supply to bring down inflation to 4.5%.

As the government failed to buy wheat from farmers in the middle of the peak marketing season, it floated on Monday a tender to import 1 million tons of wheat in an attempt to hedge against possible expensive grain imports.

The government recast the tax on Employee Stock Options. The Fringe Benefit Tax will now apply on the date of bestowal. The Fringe Benefit Tax would be enforced on the difference between the fair market value on the date on which the option is conferred on the employees and the amount actually paid by the employee for the shares.

Trading highlights

Indiabulls was the most-active stock with a turnover of Rs 377.30 crore followed by Reliance and IFCI.

Advancers

Cipla surged 2.7% to Rs 217. The stock had slumped 14.2% to Rs 217.10 in a single trading session on April 27 2007, on poor fourth quarter results of fiscal 2007. It had also recovered a bit to Rs 211.70 on May 3 2007.

Hindalco gained 1.5% to Rs 148. Hindalco net profit surged 15% in the fourth quarter of fiscal 2007 to Rs 721 crore from Rs 626.30 crore in the comparable period a year earlier. The results were released in mid-afternoon trade.

ACC advanced 0.8% to Rs 859, off an early high of Rs 880.20, bucking the downtrend in cement stocks.

Decliners

HDFC shed 2.7% to Rs 1,634. During the session on Thursday, HDFC had posted 28.96% growth in net profit in the fourth quarter of fiscal 2007 to Rs 550.05 crore as against Rs 426.52 crore in the previous quarter a year earlier.

Index heavy Reliance Industries and Larsen & Toubro declined 2.5% each to Rs 1,583 and Rs 1,698, respectively. Reliance Industries plunged on reports that the Reliance Natural Resources had secured an interim stay from the Bombay High Court, preventing Reliance Industries from selling 40 million standard cubic meters per day of gas. The interim order restrains Reliance Industries from selling the gas to any third party or using it for captive consumption.

IT large-caps declined as the rupee shot up against the US dollar. Satyam Computer was down 1.7% to Rs 471, TCS shed 1.2% to Rs 1,274, Wipro slipped 0.4% to Rs 568 and Infosys dipped 0.2% to Rs 2,076. Other decliners included Bharti Airtel and ICICI Bank off 2% each to Rs 818 and Rs 855, respectively. BHEL slid 1.6% to Rs 2,497.

Most cement stocks ended in negative territory. Grasim shed 0.9% to Rs 2,470, off the early high of Rs 2,565, while Gujarat Ambuja Cements lost 1.1% to Rs 120. The government on Thursday withdrew higher fixed duty on cement manufacturing proposed in the Union Budget, and instead levied 12% duty on 50 kg bags costing more than Rs 190 a piece.

[R]6:30AM European markets advance Friday on bid talk in Reuters and EMI.[/R]
European markets advanced in mid-morning trade on Friday. The major indices were higher including the FTSE 100 which rose 0.3% at 6,560.00 and the French CAC 40, which also gained 0.2% at 6,015.21, while the German DAX 30 was a bit worse, trading flat at 7,476.56. National benchmarks advanced in 13 of the 16 western European markets that were open.

Advancers

Reuters soared 30% after it said it received a preliminary takeover approach from an unidentified suitor. The board of Reuters confirms the preliminary approach from a third party which may or may not lead to an offer being made for Reuters.

Music publishing group EMI rallied 9.2% after saying on Friday that it has received a number of preliminary approaches to acquire the group. The firm announced there can be no certainty that any of the approaches will results in an offer.

U.K. building materials group Hanson surged 5%, extending a 20% advance on Thursday when HeidelbergCement announced it was mulling over a takeover approach. Goldman Sachs upgraded Hanson to neutral from sell after the announcement from the German firm.

Gainers included mining large-caps BHP Billiton up 3%, and Rio Tinto up 3.8%, as U.K. investors priced in a similar move in record-hitting Australian markets. Shares of BMW gained 2.8% just a day after reporting a 38% decline in first-quarter profit.

Decliners

Deutsche Boerse, the operator of the Frankfurt stock exchange, said yesterday first-quarter net income rose 19% to 192.3 million euros. That was less than the 195 million euro median estimate of four analysts surveyed by Bloomberg. The stock fell 0.8%

Shares of Nokia the largest mobile phone maker in the world, dropped 2.4% after it also traded without dividend rights.

Commodities

Crude oil erased earlier gains and declined near $63 a barrel in New York. Crude oil for June delivery shed 16 cents to $63.03 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 23 cents to $66.29 a barrel in electronic trading on ICE Futures exchange.

Gold declined, giving up recent gains, as higher equity prices lowered demand for the precious metal as an alternative investment. Silver was little changed. Gold for immediate delivery fell $1.35, or 0.2 percent, to $681 an ounce, while silver was little changed at $13.41 an ounce.

Currencies

The dollar declined against most other major currencies in European trading Friday morning. The euro traded at $1.3559, up from $1.3554 late Thursday in New York. The British pound traded at $1.9861, down from $1.9876. The dollar bought 120.31 Japanese yen, down from 120.44.

[R]5:00AM Copper futures surge Thursday, gold and silver edge higher on fund-buying.[/R]
The most active July copper contract rallied 8.20 cents higher to end at $3.7265 per pound on the New York Mercantile Exchange. June gold added $9.30 to close at $684.40 a troy ounce, while July silver advanced 17.5 cents to finish at $13.51. July platinum settled up $11.70 at $1,310.80 an ounce, while June palladium ended up $1.55 at $376.50 an ounce.

The June crude oil contract declined 49 cents to close at $63.19 a barrel after trading at $64.09 a barrel. The June heating oil contract lost 0.73 cent to finish at $1.8453 a gallon. June gasoline edged 1.50 cent higher at $2.2476 a gallon. June natural gas settled up 21.7 cents at $7.947 per million British thermal units.

On the New York Board of Trade, July Arabica coffee dipped 0.30 cent to end at $1.0440 a pound. Most-active July cocoa settled up $24 at $1,879 a metric ton. Futures on raw sugar in foreign ports for July climbed 0.15 cent to end at 9.29 cents a pound, with October up 0.11 cent at 9.54 cents. May corn gained 7.75 cents to $3.79.75 per bushel, July settled 7.25 cents higher at $3.89.25.