Asian Stocks Focus on Local Events

123jump.com Staff
21 Aug, 2007
New York City

Asian markets diverged in regional trading as Japan, China, and Hong Kong led the gainers. Thailand and India fell on the potical worries. China, in a pilot program, let local residents to invest in Hong Kong stock market lifting index in the early trading in Hong Kong. Earnings from Chalco, largest Aluminum company jumped 9%. China Southern Airline purchases 55 Boeing planes and reported profit in the first half. Philippines reported largest single day gain since 2001.

[R]10:00 AM NY, 9:00PM Hong Kong – Stocks in Shanghai and Hong Kong lost its early momentum in trading at close. Earnings and rising metal prices dominated trading sentiment.[/R]

Asian markets diverged as regional news and events dominated trading. Thailand led the region with a loss of 3.5% followed by declines of 3.1% in India, 2.8% in Singapore, 2.4% in Indonesia, and 2% in Philippines. Japan led the gainers in the region with a rise of 1.1% followed by 0.9% close after volatile trading in Australia, and 0.6% increase in Hong Kong.

The composite index in Manila jumped 9.8% or 283.18 points to close at 3,167.52. The market opened after a holiday and surged to its one-day best gain since 2001. The rate cut in the U.S. helped the market rebounds when other markets in the region rebounded in Monday trading. The broader All-share index jumped 8% to 2,016.16.

In Shanghai trading CSI 300 Index increased 1.8% to close at 4,972.70 on earnings news and pilot program to let local investors invest in Hong Kong.

Bank of China jumped 1.5% after the government agency allowed local residents to invest in Hong Kong listed companies in a pilot program.

China Southern Airlines reported first half profit of Rmb308 million compared to a loss of Rmb854 million loss. The airlines also said that it has signed a deal with Boeing to buy 55 Boeing 737 planes to be delivered in the years 2011 and 2013. The company carried 49.2 million passengers in 2006.

Chalco, the largest aluminum maker in China, jumped 9.4% to Rmb39.70 after it reported net income decline of 5.2%. The company also agreed to buy 49% stake in Yunnan Copper. The third largest copper company stock increased 5.3%. Other copper companies rallied on the news and rising copper prices in the international trading. Jiangxi Copper jumped 5% and Anhui Tongdu Copper increased 4%.

In Hong Kong trading Hang Seng index closed 0.6% or 133.72 higher to settle at 21,729.35 after gaining as much as 4.7% in the day. Of the 39 stock in the index, 23 gained and 14 declined. The daily turnover was recorded at HK$116.8 billion and GEM market was HK$724 million.

Hong Kong Exchanges & clearing Limited soared 6.2% to HK$123 on the news that the pilot program with a China controlled bank will allow its local residents to invest its foreign currency in Hong Kong stock market. China controls $2.2 trillion in foreign reserves and is planning to allow local companies and citizens to invest in international markets and assets. Credit Suisse revised its rating on the exchange operator to ‘neutral’ on the news.

China Unicom and China Mobile jumped 2% and 1% respectively in the trading. Hong Kong traded shares of Chinese banks increased in trading. China Life jumped 3% and Industrial & Commercial Bank of China rose 2.4%.

[R]7:00PM Mumbai, 9:30AM New York – A lack of transparency in nuclear pact with the U.S. left the ruling Congress party coalition in chaos. Sensex fell 3% on the worries that general election may be called ahead of schedule.[/R]

Sensex in Mumbai trading dropped 438.44 points or 3.04% to close at 13,989.11 after rebounding from the low of the day with a loss of 485 points. CNX Nifty lost 134 points or 3.2% to close at 4,074.90. The fragile coalition between Congress party and Communists parties appear to be divided on nuclear pact with the U.S. Rupee in international trading recovered against the U.S. dollar to 41.10 from 41.33.

Communists controlled parties provide a support with 60 members in the parliament to Congress party with only 226 seats, 47 seats short of majority in 545 -member Lok Sabha.

The daily turnover on BSE increased to 4,201 crore rupees from 3,877.61 crore rupees and on NSE turnover gained to 10,779 crore rupees from 8,959 crore rupees. All 30 stocks in the Sensex fell.

Gokaldas Exports soared 10.2% to 252 rupees after the U.S. private equity firm Blackstone agreed to acquire 50% from the controlling Hinduja family and 20% from the public investors. After the deal Blackstone will control 70% in the company and Hinduja family will lower its stake from 69% to 19%.

Banks declined for the second day in a row led by 5.5% fall to 1,465.30 rupees in State Bank of India followed by 4.2% decline to 835.45 rupees in ICICI Bank, and 2% decrease to 1,105 rupees in HDFC Bank.
Reliance Industries is reported to have discovered oil reserve, one of the largest discoveries on the east coast so far, in the drilling of third well in Krishna Godavari basin. The stock in the general market decline fell 2.8% to 1,742 rupees.

Reliance Communications fell 4.2% to 486 rupees after jumping a day ago on market speculation that it is negotiating with Aircel. Reliance denied the rumors today. Reliance has a total of 37 million or 3.7 crore subscribers. Bharti Airtel plans to double its network towers to 80,000 in the next the six months. The stock dropped 0.7% to 821 rupees.

Software exporters fell as market worried that the current credit market volatility in the U.S. may affect earnings in the sector. Tata Consultancy Service fell 4% to 1,012 rupees, Satyam Computer declined 4.1% to 415 rupees, and Wipro lost 5% to 446.30 rupees.

Central Bank of India priced its IPO at 102 rupees and raised 820 crore rupees. The stock closed up 13% to close at 115.40 rupees on heavy volume of 2.4 crore shares. The issue was oversubscribed 62 times at the close on July 27th.

Real estate developers suffered in the market decline. Sobha Developers fell 4.7% to 750 rupees, Unitech declined 3.3% to 477 rupees, DLF lost 3.6% to 558 rupees, and Ansal API decreased 3% to 257 rupees. TCI Industries, the owner of Mukesh Mill properties in Colaba area of Mumbai jumped upper end of the daily limit 5% to 4,318 crore rupees. The stock has surged 5% every day for the last 28 trading sessions on the expectations that the mill will be acquired at a premium price by one of realtor companies. DLF recently agreed to pay 1,600 crore rupees for 38 acre land complex of DCM Shriram in New Delhi. Gayatri Projects fell 7.7% to 255 rupees after the company plans to raise foreign investor limit to 49%.