Japan Ends Higher on Exporters

Ivaylo
21 May, 2007
New York City

Most Asian markets finished in positive territory on Monday boosted by gains on U.S. markets on Friday, with shares in Japan lifted by exporters such as Sony Corp. and Canon, while companies tied to domestic consumption led a rebound on Chinese markets from early losses. All benchmark indices ended higher.

[R]8:30AM Asian markets finish higher on Monday with Japan leading advancers on strong exporters.[/R]

Asian markets ended higher on Monday. Japan''s Nikkei 225 advanced 0.9% to finish at 17556.87. Sony rose as much as 4% on continued buying after it announced a robust earnings forecast last week, while Canon ended 0.7% higher. Shares in Sharp were up 1.6%, adding to the broad market strength. Steel shares were also broadly higher, with the world''s second-largest steel producer Nippon Steel closing 2.4% higher, while Nakayama Steel Works gained 5%.

The Shanghai Composite index in China recovered early losses of 3.2% on the People Bank of China announcement Friday that it was widening the yuan trading band against the U.S. dollar and also hiked interest rates and bank reserve requirements. The index closed 1% higher at 4,072.22.

Other indices around the region also finished higher. Hong Kong Hang Seng ended 0.1% up at 20,927.75, Australian S&P/ASX 200 finished 0.9% higher at 6,369, South Korean Kospi was up 1% to end at 1,628.20 and Singapore Straits Times Index rose 0.1% at 3,514.49.

[R]7:30AM NY-6:30 PM Mumbai Sensex gains Monday on strong banking, metal and oil stocks.[/R]

The Sensex on BSE ended Monday 115.19 points, or 0.81%, higher at 14,418.60.

The market-breadth was positive as 1,395 stocks advanced, 1,194 declined and only 74 stocks remained unchanged. Of the 30 stocks in the Sensex, 16 advanced, while the rest declined. The turnover on BSE was Rs 5,559 crore, compared to Rs 4,696 crore on Friday. On NSE, the turnover was Rs 9,918 crore, much lower than Rs 9,810 crore on Friday.

Economic news

The rupee advanced to a fresh nine-year high on Monday as investors were inclined to think the Reserve Bank of India would not interfere with the gains of the rupee against the dollar after China widened the yuan''s trading band against the dollar.

The government announced that wheat purchasing in the ongoing Rabi marketing season has crossed 100 lakh tonnes, including more than six lakh tonnes bought by Punjab Government for its own use.

Trading highlights

Reliance Energy was the most active stock with a turnover of Rs 732.30 crore followed by Adlabs and Reliance Capital.

Advancers

Reliance Energy led the gainers, surging 8.5% to Rs 555. Three block deals of 44.10 lakh shares were traded in the stock at an average price of Rs 513 per share in opening trade. Tata Steel soared 5.6% to Rs 624 on fresh buying tracking strong fourth-quarter results announced late last week. Tata Steel had rallied over the past few weeks after the company last month announced attractively priced (Rs 300) rights issue in the ratio of 1:5, and also on hopes of strong fourth quarter results.

Index heavy Reliance Industries surged 3.7% to Rs 1,762. It struck an all-time high of Rs 1,780, on market rumors that it is likely to come out with rights issue. Reliance rejected media reports that the company is likely to miss the June 2008 deadline for commercial production of gas from the Krishna Godavari basin.

ONGC and HDFC Bank rallied over 2.5% each to Rs 933 and Rs 1,100, respectively. ONGC gained after Brent crude oil rose 28 cents to $69.70 a barrel on Monday, May 21 2007, while US benchmark crude gained 20 cents to $65.14, boosted by concerns over supplies from major exporters Iran and Nigeria.

ITC advanced over 2% to Rs 171, and Maruti advanced nearly 2% at Rs 823. Reliance Communications ended up 1.7% to Rs 505, and SBI added 1.5% to Rs 1,345. HDFC was up over 1% at Rs 1,720.

Decliners

Auto makers were lower today. Tata Motors declined 2.5% to Rs 725. During trading hours on May 18 2007, Tata Motors posted a 25.57% increase in consolidated net profit to Rs 2,169.99 crore in the fiscal 2007 compared with Rs 1,728.09 crore in the fiscal 2006. Bajaj Auto slid 1.7% to Rs 2,248 and Hero Honda was off nearly 1% at Rs 680.

Bajaj Auto shares plunged 16% in the past two sessions after the surprise revelation that Allianz — Bajaj partnership in its two insurance ventures has a call option to buy up to 74% at a nominal price. This was the greatest disappointment in the demerger plan Bajaj is considering.

IT stocks declined on a strong rupee. Wipro and Satyam shed 1.7% each to Rs 535 and Rs 448, respectively. TCS and Infosys lost over 1% each to Rs 1,237 and Rs 1,961, respectively.

[R]6:30AM European stocks are mixed Monday with M&A at the center of attention.[/R]

European markets were mixed Monday. In Germany the Xetra Dax added 15.6 points or 0.2% to 7,623.06 but in Paris, the French CAC 40 fell 16.5 points, or 0.3%, to 6,084.6 and the U.K. FTSE 100 index inched down 0.2% at 6,628.90.

Advancers

Acciona was also in focus, adding 5.9% as Citigroup said the Spanish construction company transformation was being overlooked by the market as they upgraded their recommendation from hold to buy and raised their price target.

German conglomerate Siemens contributed to the industrial sector gains by rising 1.6% in Frankfurt after it turned to an outsider, Merck & Co. executive Peter Loescher, to become its next chief executive.

Bayer rose 5.1%, helped by UBS raising its price target and a buy recommendation reiterated.

Decliners

In Italy, UniCredit fell 1.6% after sealing on Sunday its 22 billion euros acquisition of Capitalia, in an all-paper deal which will create the second largest bank in Europe.

Shares in retail bank Lloyds TSB edged down 0.3% after it stated that it has agreed to sell its registrars business to the investment group Advent International for 550 million pounds.

Banca Popolare di Milano and Banca Popolare dell'' Emilia Romagna approved a merger deal that will create the seventh largest bank in Italy by branch number with a market capitalization of around 12 billion euros. Banca Popolare di Milano shares slid 4%, while Banca Popolare dell'' Emilia Romagna shares were unchanged.

Commodities

Crude oil for June delivery rose 44 cents, or 0.7%, to $65.38 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Brent crude for July settlement gained 87 cents, or 1.3%, to $70.29 a barrel on the ICE Futures Exchange. Gold traded in London at $662.40, up from $660.90 late Friday. Silver opened in London at $12.94, down from $12.96.

Currencies

The U.S. dollar was mostly higher against other major currencies in European trading Monday. The euro traded at $1.3481, down from $1.3505 late Friday in New York. The British pound traded at $1.9701, down from $1.9745. The dollar fetched 121.38 Japanese yen, up from 121.15.

[R]5:30AM Gold and silver finish higher on Friday, while energy stocks end mostly lower.[/R]

June gold advanced $4.80 at $662 a troy ounce on the New York Mercantile Exchange with July silver also gaining 12 cents to end at $13.003. July platinum settled up $8.30 at $1,326.20 an ounce, while June palladium added $4.85 to finish at $365.25 an ounce. The most-active July copper contract rose 1.70 cents to settle at $3.3235 per pound.

June crude oil bucked the downtrend in energy stocks and added 8 cents to close at $64.94 a barrel. June gasoline settled down 2.89 cents at $2.4077 a gallon. June heating oil finished down 2.15 cents at $1.9152 a gallon and June natural gas also ended down 13.1 cents at $7.944 per million British thermal units.

On the New York Board of Trade, July Arabica coffee futures declined 1.30 cents to stop at $1.1180 a pound, with September off 1.30 cents at $1.1460. Most-active July cocoa added $53 to settle at $1,947 per metric ton. Futures on raw sugar in foreign ports for July ended down 0.05 cent at 8.63 cents a pound, with October off 0.09 cent at 8.92 cents.

On the Chicago Board of Trade, corn futures finished lower across the board. July corn ended 1.75-cent lower at $3.7125 per bushel, and December closed 4 cents lower at $3.6650. July soybeans settled 0.25-cent lower at $7.9250 per bushel, and November soybeans ended unchanged at $8.2125. July wheat tumbled 14.25 cents to $4.7125 per bushel.