Asia Pacific shares ended solidly higher on Tuesday, August 13, 2013, with the MSCI Asia Pacific Index added 0.9% to 135.33, amid optimism over the Chinese economy after the release of positive data last week and on evidence that Europe's economy is finally picking up steam.
Investor's were continuing hunting cyclical stocks for second straight day on account of an improving Chinese economic environment as indicated by the latest stronger-than-expected data. China's industrial production rose 9.7% year on year in July, accelerating from the pace of 8.9% in June while fixed-asset investment jumped 20.1% in the first seven months, unchanged from the rate in the first half. Trade also rebounded robustly, with exports and imports reversing from declines in June and beating market estimates, cementing a view that growth of the world's second largest economy is stabilizing.
Meanwhile, sentiments were further gained support from a report showing German investor confidence increased more than forecast. The Mannheim-based ZEW economic think tank's monthly poll of economic sentiment rose to 42.0 from 36.3 in July, reaching its highest level since March and beating the market expectation of 40. A jump in Germany's ZEW economic sentiment survey dovetailed with a rise in euro zone industrial output and the fastest rise in UK house prices in seven years, to bolster the renewed sense of optimism in the region.
Among the regional bourses, Japan's benchmark index leading gains by 2.6% as the yen weakened on news of corporate tax cuts. Australia's S&P ASX 200 rose to its highest level in nearly three months and South Korea's Kospi hit a one-week high. The Shanghai Composite meanwhile, hit a near two-month high. Benchmarks in Taiwan, Singapore, Indonesia and India also rose.
Back to country wise, headline shares on the Tokyo market climbed up sharply, with the Nikkei Stock Average adding 2.6% to 13,867.00, rebounding from a moderate 0.7% drop prior day, thanks to depreciation of Japanese yen against the dollar and euro which makes exporters more competitive overseas.
The Japanese currency weakened to 97.46 yen per US dollar from 96.90 in New York on Monday, while it depreciated to 129.65 yen per euro from 128.84 in US trading, on reports that Japanese Prime Minister Shinzo Abe was reviewing a possible corporate tax rate cut in a bid to stoke growth and offset the impact of a national sales tax hike.
The news came after Japanese GDP report released yesterday which showed weaker than expected growth of 0.6% qoq in Q2. The data prompted speculation that Abe could delay or even reconsider the two staged increase in sales tax. But it seems that Abe considering another way to ease the burden on the economy.
Taiko Pharmaceutical surged 10% after reporting that its quarterly net profit tripled while dairy product maker Meiji Holdings added 3% after reporting a 243% rise in net profit.
June machinery orders from the Cabinet Office released on Tuesday, indicating Japan's core private-sector machinery orders fell a smaller-than-expected 2.7% on the month in June after a sharp 10.5% rise in May and 8.8% fall in April. Core orders, which exclude volatile demand for ships and from electric utilities, marked the first rise in five quarters from the previous three months in April-June, up 6.8%, but they are forecast by the Cabinet Office to slip by 5.3% in July-September.
In Australia, Australian stock market has finished sharp higher with shares of healthcare, industrials, miners and financials were leading the rally. Australia's benchmark index rose 49 points, or 0.96%, to 5157.70, its highest level in nearly three months, a day after hitting a one-week peak in the previous session.
Healthcare issue was top gainer in Sydney, lead by CSL which rose 4% ahead of June quarter results tomorrow. Banks were also higher with 1% gains in Australia New Zealand Banking, Commonwealth Bank of Australia (CBA) and National Australia Bank ahead of CBA's earnings on Wednesday. Miners pared gains after the nation's Treasury warned that mining investment could fall sharper than expected, offsetting optimism over higher gold and iron ore prices. Fortescue Metals inched up 0.2% following a 4% spike earlier while Atlas Iron added 5.5%.
Property developer Stockland Group (SGP) fell 3% to A$3.70 after blaming a write-down and weakness in the residential housing market for its drop in FY profit. FY13 NPAT fell almost 80% to A$104.6M. Shareholders will receive a final fully franked dividend of 12 cents per share.
Mining products supplier Bradken rose 12.4% to A$5.89 on a bullish FY14 outlook. BKN reported a 33.4 drop in FY13 profit to A$66.9M but will continue to cut costs in the current financial year to get back on track.
Australian business conditions remain at 4 year lows while confidence slumps to 8 month low - despite a falling AUD and lower interest rates as cooling demand from China for commodities clouded the outlook for the resource-rich economy. A survey published by National Australia Bank Tuesday showed business sentiment fell to minus three in July from zero in June. A separate reading of business conditions, which include profitability, employment levels and forward orders, remained at minus seven, unchanged from the previous month. A reading below zero indicates that pessimists outnumber optimists.
In China, Chinese stocks closed higher in quiet trading, with benchmark Shanghai Composite Index was gaining 0.2% to 2106.16, extending winning streak for third straight day and was at highest level since June 20. Market gains were lead by shares of financials and industrials amid optimism over China's economic outlook after the release of positive data last week.
Property stocks were in focus in Shanghai after that the city of Wenzhou has become the first to ease restrictions of property purchases. First-time buyers there can now purchase two houses, which have been banned by China's government as part of a campaign to cool rising prices. Real estate developers Gemdale and Shanghai Shimao rose 1% each.
Chinese banks went higher after China's central bank injected more short-term funds into money markets to ensure a stable supply of liquidity and keep rates stable. China Minsheng Banking led gains by nearly 2%. Industrial Bank rose 4.5% after saying first-half net income increased to 21.6 billion yuan from a year earlier.
Indian market ended higher as the rupee recovered in choppy trade after the government raised import duty on gold and silver ahead of peak festival-season demand as part of efforts to curb dollar outflows and narrow a wide current-account deficit. The barometer index, the S&P BSE Sensex, the 50-unit CNX Nifty, both, hit over one-week high. The Sensex was provisionally up 291.62 points or 1.54%, up 373.79 points from day's low and off 4.50 points from the day's high.
Mahindra & Mahindra (M&M) edged higher in volatile trade after the company announced good Q1 results. ONGC fell in choppy trade after the company reported weak Q1 result. Hindalco Industries declined in volatile trade after its US subsidiary Novelis Inc. reported weak Q1 result on Monday, 12 August 2013. ICICI Bank reversed direction after hitting a 52-week low. DLF surged after the company reported turnaround financial performance on sequential basis in Q1 June 2013.
Powered by Capital Market - Live News
