Japan Falls on Earthquake, Taiwan Rises

Ivaylo
17 Jul, 2007
New York City

Taiwan led gainers in Asia as UBS raised its recommendation on the nation

[R]8:30AM HK, Taiwan gain, China surges and Japan falls in Asia.[/R]

Asian markets ended mixed on Tuesday.

In Tokyo, Japanese stocks declined with insurance companies such as Millea Holdings Inc. and power producers after a magnitude 6.8 earthquake shook northwest Japan yesterday, damaging a nuclear reactor. Millea Holdings lost 1.7%, Sompo Japan Insurance finished 2.3% lower, and Mitsui Sumitomo Insurance shed 2.1%. Sumitomo, the third-largest trading house, in the country, climbed 2.7% and Cosmo Oil, the fourth-biggest refiner in Japan, surged 2.5%. The Nikkei 225 Average closed 0.1% lower at 18,217.27.

In Hong Kong, the market rose for the third time in four days. The benchmark Hang Seng Index rose 0.5% to close at 23,057.30. Cnooc Ltd. climbed after Deutsche Bank AG raised share-price estimates for oil producers and crude oil hovered near an 11-month high. Cnooc, surged 3% and PetroChina, the largest oil producer in China, added 0.7%. Industrial & Commercial Bank, the biggest lender in China, added 2.1%.

In Taiwan, the Taiex index gained 1%. Taiwan Cement, the biggest maker of the building material on the island, advanced 4.4% and Cathay Financial, the largest life insurer, rose 4.2%. The national benchmark target was raised by UBS on better corporate earnings and a shift by investors from bonds and property toward stocks as interest rates increase.

In China, the benchmark Shanghai Composite Index soared 1.9% to close at 3,896.19. Property developers surged following the appreciation of the yuan and banks gained on a stable earnings outlook for the sector. Beijing Tianhong Baoye Real Estate surged up to its limit, ended 10% higher. Shenzhen Development Bank followed other local lenders in its guidance of strong first-half earnings. Shenzhen Development Bank jumped 9.8%, Industrial Bank closed 9.6% higher and China Merchants Bank rose 6%.

In Sydney, the index S&P/ASX 200 rose 0.01% to 6,381.60. Mining company Rio Tinto gained 0.4%, bouncing back from losses recently triggered by worries it may be overpaying for Alcan.

The market in Seoul was closed for national holiday.

[R]7:30AM NY – 6:30 PM Mumbai Sensex closes 21 points lower, Reliance surges.[/R]

The Sensex on BSE finished 21.40 points lower Tuesday, or 0.14%, at 15,289.82.

The benchmark index opened 47 points higher and hit an intra-day high of 15,440.20 in morning deals. The intra-day low was 15,272.46, struck in the early afternoon.

The market-breadth turned negative in the latter part of trading. Out of 2,733 stocks traded on BSE, 977 advanced, 1,696 declined and 60 were unchanged. Of the 30 stocks in the Sensex, 11 advanced, while all the rest declined.

The turnover on BSE was Rs 6,023 crore, higher than Rs 5,392 crore on Monday. On NSE, the turnover was Rs 12,729 crore, higher than Rs 11,519 crore on Monday.

Economic news

Ford Motor Co., the second-largest U.S. automaker, is likely sell a small car model in India. Small cars and compact hatchbacks account for three-fourths of the Indian market. Ford is targeting broadening its product range in India from sedans and sport-utility vehicles.

Trading highlights

Indiabulls Real Estate was the most active stock with a turnover of Rs 403.60 crore followed by Indiabulls and DLF.

Advancers of the Day

The process of infrastructure boom lifted cement stocks. Cement major Ambuja Cement advanced 3.1% to Rs 137 and was the best performer on BSE. Other cement stocks also gained. JK Cement was up 1% to Rs 156, Birla Corporation added 0.9% to Rs 294 and Madras Cement advanced 1.2% to Rs 3,540.

Index heavy Reliance Industries surged to a record high of Rs 1,834 on reports it had made a gas discovery in the Cauvery basin. It settled 2.9% higher to Rs 1,827.

IT stocks bounced back, led by strong results from TCS. TCS jumped 2.4% to Rs 1,155. After market hours on Monday, TCS reported a 36% growth in net profit to Rs 1,202.93 crore in the first quarter ended June 2007 compared to Rs 882.66 crore in the first quarter of June 2006. Satyam spurted 1.3% to Rs 488 and Wipro gained 1% to Rs 506.

Dr.Reddy''s rallied 1.8% to Rs 674, while ITC was up around 1% at Rs 156.

Decliners of the Day

Mahindra & Mahindra shed 2.6% to Rs 800. Other auto stocks which declined were Tata Motors, down 1.4% to Rs 749 and Bajaj Auto off 1.6% to Rs 2,219.

Reliance Communications dropped 2.3% to Rs 561. Reliance Communications, the second-largest wireless company in India, intends to raise investment by more than half this year to 160 billion rupees, or $4 billion, in order to close the gap with Bharti Airtel Ltd.

Metal stocks ended lower on selling pressure. Tata Steel lost 2% to Rs 681, Sterlite Industries slumped 4.5% to Rs 635, JSW Steel dipped 3.4% to Rs 697, and SAIL was off 3% to Rs 153.

BHEL and State Bank of India plunged 2% each to Rs 1,623, Rs 1,580, respectively. Bharti Airtel lost over 1.5% to Rs 863 and HDFC declined also 1.5% to Rs 1,965.

[R]6:30AM European markets fall led lower by oil stocks, banks.[/R]

European markets were lower on Tuesday morning. National benchmarks declined in all of the 17 western European markets that were open except for Portugal. The U.K. FTSE 100 index was off 0.4% at 6,671.70, the German DAX index dipped 0.6% at 8,054.32 and the French CAC-40 index shed 0.3% at 6,106.19.

Commodity downgrades

Repsol and Statoil led a retreat in energy stocks after ING recommended selling the shares. Repsol, the biggest oil company in Spain, fell 1.1 %. Statoil, the biggest oil company in Norway, lost 1.3 % and Total the largest refiner in Europe, decreased 0.8 %. ING downgraded Total to hold from buy.

Anglo American and Antofagasta followed copper prices lower and BHP Billiton slipped after Deutsche Bank downgraded shares of the world biggest mining company on gains this year. Anglo American fell 0.7 % and Antofagasta dropped 0.6 %. BHP Billiton declined 1.2 % after Deutsche Bank cut its recommendation on the shares to hold from buy.

In London, U.K. stocks fell for a second day, paced by BHP Billiton and the other metal stocks. Other companies also lost on downgrades. Rolls-Royce dropped 2.4 % after Credit Suisse Group cut its recommendation for aircraft-engine maker to neutral from outperform. Kelda Group, which supplies water to about 4.7 million people in northeastern England, retreated 2.1 % after UBS AG downgraded the shares to reduce from neutral.

In Frankfurt, Germany''s main stock index fell for the first time in four days, led by TUI AG, the largest travel company in Europe. Deutsche Postbank and Siemens also declined. TUI dropped 2.1 %. Deutsche Postbank, Germany biggest consumer bank by clients, decreased 1.5 %. Siemens, the largest engineering company in Europe, lost 1.8 %.

In Paris, French stocks fell for the first time in four days, led by Total SA. Renault and Suez also retreated. Renault, the second-largest carmaker in France, declined 1.2 % and Suez, Europe fifth-largest electricity producer, lost 1.6 %.

Currencies

The dollar kept declining Tuesday, slipping against the euro ahead of a key German investor confidence report. The euro bought $1.3793 in early European trading, up from $1.3784 in New York the previous day. The British pound continued to trade around 26-year highs against the dollar Tuesday, buying $2.0375, slightly above the $2.0371 it bought late Monday in New York. The dollar slipped only marginally to 121.80 Japanese yen from 121.82 yen.

[R]5:30AM Gold dips slightly, oil futures climb sharply, agricultural prices tumble.[/R]

August gold dipped $1 to end at $666.30 an ounce on the Nymex.

September silver tracked gold lower, edging down 4.5 cents to $13.065 an ounce.

Nymex copper declined 3.1 cents to end at $3.562 a pound.

Crude oil for August delivery advanced 22 cents to close at $74.15, which is the highest settlement since Aug. 11 last year.

Gasoline futures shed 9.86 cents to $2.1262 a gallon.

Wheat for September delivery lost 19 cents to settle at $6.0175 a bushel.

December corn declined 20 cents to end at $3.485 a bushel;

December oats closed down 18.5 cents at $2.5525 a bushel while November soybeans slipped 50 cents to settle at $8.9875 a bushel.