Regional blue chips opened higher today, inspired by firm closing of Wall Street overnight. US stocks closed modestly higher on Tuesday, 22 July 2014, boosted by better-than-expected inflation and housing reports as well as a flood of second-quarter earnings reports.
Traders welcomed news that pro-Russian rebels had handed over the black boxes from downed flight MH17, helping ease geopolitical concerns. The downing of the Malaysia Airlines jet last Thursday in Ukraine fanned fears that a regional crisis could become an international one, with Western governments saying it was shot down by pro-Russian separatists.
Those tensions eased yesterday after it emerged the rebels had given the plane's two black boxes to Malaysian officials. They also announced a cease-fire in an area around the crash site to provide safe access for investigators.
The focus of investors was returning to earnings, with hundreds of U.S. companies set to report quarterly results this week. Many of the U.S. earnings reports have been positive so far, easing jitters that stock prices have climbed too high in the past several months.
After U.S. markets closed on Tuesday, two tech giants boosted investor sentiment with their better-than-expected earnings reports.
Apple Inc. reported a 12% increase in its quarterly profit, exceeding analysts' estimate. The company said its iPhone shipments rose 13% over a year earlier, showing consumers still snapped up its devices even as the next version will likely to come out this fall.
Microsoft reported a 7.1% fall in quarterly profit, disappointing Wall Street forecasters, as it took a financial hit from the purchase of Nokia Corp's cellphone unit. Microsoft's CEO painted a rosy vision for the company's future after saying its profit excluding items related to the absorption of Nokia was higher than forecasts.
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Among Asian bourses
Australia shares surges to six year high
Australian stock market advanced to highest level in six years on the back of positive cues from offshore bourses, with shares in lenders and miners leading the gain. But gain on the upside capped after domestic second-quarter consumer price data showing core inflation rose 2.8% from a year earlier, near the upper end of the Reserve Bank of Australia's 2%-3% target. The benchmark S&P/ASX 200 Index advanced 33.40 points, or 0.6% to 5576.70, a highest closing level since June 2008, while the broader All Ordinaries Index added 33 points, or 0.6%, to 5567.
Shares of material & resources companies advanced, led by BHP Billiton, with gain of 1.2% to A$38.98 after resources giant posted stronger than expected full year iron ore results today. BHP production lifted by 19% in the quarter and said it expects its FY15 production from the Pilbara region to exceed FY14. Main rival Rio Tinto rose 0.6% to A$64.53, while iron ore miner Fortescue Metals Group added 0.2% to A$4.62.
Starpharma rocketed 14.4% to A$0.84 after the biotech firm received key regulatory approval, making its virus-killing condom one step closer to sale.
Computershare climbed 1.7% to A$12.84 after saying it will acquire Homeloan Management for an upfront consideration of GBP 47.5 million.
Nikkei falls on growth woes
Japan share market declined on concerns about domestic economic growth after the government cut its fiscal year growth forecast. The benchmark Nikkei 225 index slipped 0.1%, or 14.72 points, to 15,328.56, while the Topix index of all first-section issues edged down 0.07%, or 0.88 points, to 1,272.39.
The Cabinet Office revised down growth forecast for the world's number three economy to 1.2% in the year to March, compared with a previous estimate of 1.4%, blaming weak exports and rising imports as well as the impact of April's sales tax hike on consumer spending and business confidence. The announcement comes a week after the Bank of Japan also lowered its outlook to 1% from an earlier 1.1%.
Financial firms and communications shares were lower. Aplus Financial Co, a credit-card company, fell 3.1% to 154 yen. Japan Exchange Group Inc, operator of the nation's main bourse, lost 2% to 2,367 yen. KLab sank 3.5% to 1,670 yen, while SoftBank Corp declined 1.3% to 7,596 yen.
Tokyo Electron lost 2.9% to 6,935 yen on a report its tie-up with Applied Materials received strong opposition from China's Ministry of Industry.
Lasertec jumped 5.1% to 1,045 yen on forecasting a 27 yen full-year dividend, up from a previous 20 yen estimate.
Cyberdyne Inc. surged 19% to 13,980 yen, a record close, after SMBC Nikko rated shares of the medical equipment researcher outperform in new coverage.
Melco Holdings Inc. gained 0.8% to 2,254 yen. The maker of computer equipment reported a tripling in quarterly net income.
China stocks closed mixed
Mainland China share market advanced for second day in row on Wednesday, 23 July 2014, on calming Ukraine tension and hopes the government will do more to shore up economic growth. But gain on the upside was limited on concerns about possible liquidity crunch in the market as funding availability dried up. The benchmark Shanghai Composite advanced 3.01 points, or 0.14%, to 2078.4. Trading turnover increased to 106.70 billion yuan from yesterday's 98.70 billion yuan.
HSBC upgrade of domestic GDP forecast also underpinned risk appetite buying. HSBC has upgraded its forecast for China's year-on-year gross domestic product growth to 7.5% from 7.4%, saying recovery has been stronger than expected. The Chinese economy expanded 7.5% year on year and 2% quarter to quarter (seasonally adjusted) in the second quarter. In the first half of 2014, China's economy expanded 7.4% from a year earlier.
The People's Bank of China on Tuesday suspended first of the regular biweekly open market operation. Just 18 billion yuan in outstanding PBOC paper comes due this week, and that won't be enough to counter the impact of tax payments as well as another 11 initial public offering. Initial public offerings this week may freeze an estimated 700 billion yuan to 1 trillion yuan in funding, according to China International Capital Corp., a government-owned investment bank. Tax payments this week could see another 200 billion yuan flowing out.
Hang Seng rises on strong offshore cues
Hong Kong share market advanced, registering gain for second day in row, on tracking strong lead from Wall Street overnight and firm regional cues. The benchmark Hang Seng Index climbed up 189.76 points, or 0.8%, to 23971.87. Turnover increased to HK$79.82 billion from yesterday's HK$71.70 billion.
Shares of mainland property developers extended react run, on speculation Beijing would remove restrictions on home purchases after official data showed prices fell in a record number of cities last month. Haikou has become the latest city to relax home-purchase restrictions, joining cities including Wenzhou, Jinan and Wuhan that have loosened curbs to prevent falling home prices.
CR Land (01109) soared 7% to HK$16.86. COLI (00699) jumped 4% to HK$22.4. China Vanke (02202) shot up 5.7% to HK$17.12 after hitting all-time high of HK$17.22. Anhui Conch rose 3.1% to HK$30.10.
China Cinda jumped 4.9% to HK$4.31, extending yesterday's 4.6% gain. The stock gained after rival China Huarong Asset Management Co. sold a 20% stake to investors including Goldman Sachs Group Inc. and China International Capital Corp.
Gome Electrical Appliances Holding jumped 6.9% to HK$1.39 after saying six-month net-income may more than double. The Company expects profit to increase significantly by more than 110% for the six-month period ended 30 June 2014 as compared with the corresponding period last year.
China Modern Dairy Holdings rose 1.4% to HK$3.71 after Daiwa Securities Group estimated first-half sales will jump more than 80%.
Great Wall Motor shares rose 1% to HK$30.25 after announcing its Operating revenue jumped 8% to 28.53 billion yuan.
Nifty ends at record closing high
Indian stock market settled at record high led by IT stocks in what was a volatile trading session. Gains for the key benchmark indices were driven by upmove in Asian and European stocks. Asian and European stocks rose after better-than-expected inflation and housing reports in the US on Tuesday, 22 July 2014. However, the broad market showed weakness. The S&P BSE Sensex was up 121.53 points or 0.47% at 26,147.33, a record closing high. The CNX Nifty was up 27.90 points or 0.36% to 7,795.75, a record closing high.
IT stocks gained on positive economic data in US, the biggest outsourcing market for the Indian IT firms. Infosys (up 3.37%), Wipro (up 1.93%), Tech Mahindra (up 0.7%) and HCL Technologies (up 0.73%) gained.
TCS gained 2.09% to Rs 2,583.95 after announcing a new partnership with MapR Technologies, Inc., provider of the top-ranked distribution for Apache Hadoop, to help enterprise customers easily and rapidly capture critical big data insights.
Polaris Financial Technology tumbled 7.62% after consolidated net profit fell 15.61% to Rs 38.32 crore on 7.04% decline in income from operations to Rs 600.03 crore in Q1 June 2014 over Q4 March 2014. KPIT Technologies slumped 11.34% after consolidated net profit fell 17.13% to Rs 50.80 crore on 1.5% decline in revenue to Rs 689.70 crore in Q1 June 2014 over Q4 March 2014.
Elsewhere in the Asia Pacific region-- New Zealand's NZX50 added 0.25% to 5146.53. Malaysia's KLSE Composite added 0.03% to 1871.83. Singapore's Straits Times index added 0.72% to 3340.70. Indonesia's Jakarta Composite Index rose 0.19% to 5093.53 after Joko "Jokowi" Widodo was declared the winner of presidential election. Bucking the trend, South Korea's KOSPI index was edge down 0.03% to 2028.32. Taiwan market closed for holiday.
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