Asia Pacific bellwether stocks continued northward journey on Wednesday, January 30, 2013, with the MSCI Asia Pacific Index, the benchmark regional equities gauge, gained 0.6% to 133.38, highest level in nearly 18 months, buoyed by gaining confidence over global economic recovery and easing worries about European sovereign debt problems.
Investors chased for riskier assets as robust US data further boosted investor confidence. Meanwhile advance in regional bourses further propelled on receding worries about euro zone debts after the data showed Tuesday that the European Central Bank's balance sheet shrank to its lowest level in nearly a year, a sign of stability in financial markets as banks become less dependent on ECB loans for funding.
Adding to bull, encouraging economic news out of Germany, the Euro zone's largest economy, also supported buying. The forward looking Gfk German Consumer Climate index, which forecasts consumer confidence, ticked up to 5.8 for February from an upwardly revised 5.7 in January.
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Gains on the upside were, however, capped today as traders are awaiting some key events for today. As for today, the US calendar will start with ADP employment report, followed by Q4 GDP and then FOMC rate decision. Other data to be watched today include Eurozone confidence indicators, UK mortgage approvals and M4, Swiss UBS consumption and KOF.
In the Asia Pacific, Japan's Nikkei Stock Average surged 2.3% to end at its best level since April 27, 2010 and Australia's S&P/ASX 200 climbed 0.2% to reach their highest closing values since April 2011. South Korea's Kospi index gained 0.4% after the nation's industrial output unexpectedly climbed. The Shanghai Composite climbed 1%, extending its advance since Dec. 3 to the threshold signaling a bull market to some investors. Hong Kong's Hang Seng Index (HSI) rose 0.7% and Taiwan's Taiex advanced 0.4%. Malaysia's KLCI Composite Index dropped 0.6%.
Back to country wise, Japanese share market advanced on Wednesday, January 30, 2013, buoyed by receding concerns over Europe's sovereign debt problems and on earnings optimism after yen's weakened to lower 91 yen level against greenback. Meanwhile upbeat earnings outlook from Yahoo Japan gave an extra boost to the market. The benchmark Nikkei Stock Average advanced 247.23 points from prior day closure to finish at 11113.95. The benchmark index closed at its highest level since April 27, 2010. The broader Topix index jumped 7.99 points to finish at 928.75.
Telecoms were a strong spot today in Tokyo, with Softbank Corp rose 3.6% to 3175 yen after a Nikkei news report said the wireless carrier was expected to post a 10% gain for its April-December operating profit, helped by iPhone sales. Rival KDDI Corp, which also sells the iPhone and had already posted a 40% gain in its October-December operating profit, gained 3.1% to 6,730 yen. Also among the wireless carriers, fixed-line telecom major Nippon Telegraph & Telephone Corp added 0.8% to 3770 yen, while NTT DoCoMo Inc was up 1% to 134900 yen despite reports tipped a 9% lower nine-month operating profit for the firm.
Export related stocks were also notable higher, with Olympus Corp advanced 3.6% to 2014 yen, Canon Inc 2.9% to 3385 yen, TDK Corp 1.1% to 3315 yen, and Fast Retailing Co 4.3% to 28840 yen. Komatsu rose 2.2% to 2437 yen and Fujifilm Holdings Corp putted on 0.3% to 1831 yen. Central Japan Railway Co jumped 6.6% to 8100 yen after reporting a 49% rise in nine-month net profit. Yahoo Japan Corp rallied 17.1% to 37250 yen after updating its fiscal-year earnings forecast to a 10%-11% gain year-on-year, amid growing online advertising revenue, including for smartphones.
In economic news out from Japan, the Ministry of Economy, Trade and Industry said on Wednesday that retail sales in Japan were up a seasonally adjusted 0.1% on month to 13.098 trillion yen in December, following the downwardly revised 0.1% contraction in November. On a yearly basis, retail sales rose 0.4% in December, after adding a downwardly revised 1.2% in the previous month.
The finance ministry said on Wednesday that Japan posted a merchandise trade deficit of 1.071 trillion yen in the first 10 days of January, up 16.8% from the 917.3 billion yen deficit in the year-earlier period. The figures are measured on the basis of goods passing customs and are reported before adjustment for seasonal factors.
In Australia, the Sydney Australian share market wrapped Wednesday's trading with firm footing, with the benchmark S&P/ASX200 advanced 7.7 points from prior day closure to 4896.70, its highest level since late April 2011. The benchmark index registered tenth day of straight rally, the longest winning streak since 14-28th July 2009 when stocks had 11 sessions of gains, with shares in materials and resources and energy companies led rally. The Prime Minister of Australia, Julia Gillard, announced today that the Federal Election will be held on Saturday 14 September. The markets showed muted reaction to Ms Gillard's poll date announcement.
Among the key sectors in Australia, materials jumped 0.9%, energy added 1% and financials inched up 0.2%. Material heavyweight Rio Tinto jumped 1.5% to A$67.12, while rival BHP gained 1.2% to A$37.62 and iron ore miner Fortescue added 0.9% to A$4.73.
The big banks in Australia were weaker today, with NAB fell 0.3% to A$27.64, Westpac 0.2% to A$28.17, and CBA 0.1% to A$64.70. ANZ was up 0.3% to A$26.58. Insurance stocks clawed back some ground today, following yesterday's selloff on concerns about the recent floods in Queensland. The Insurance Council of Australia estimated the damage will come in around A$200 million, which should be manageable for the insurers which have natural peril allowances upwards of A$500 million. QBE Insurance gained 4.2% to A$11.75 and IAG rose 1.2% to A$4.99.
Australian retailers went lower, with Wesfarmers declined 1.8% to A$31.65, despite reporting increases in sales across all its retail businesses. Coles sales were up 4.7% in the first half to A$18.3 billion while Bunnings sales gained 5.7% to A$4 billion and Kmart sales were up 3.5% to A$2.4 billion. Rival Woolworths, which reports tomorrow, lost 0.7% to A$31.65.
In economic news from Australia, an indicator of online job vacancies in Australia declined in December, data published by the Department of Education, Employment and Workplace Relations (DEEWR) showed today. On a seasonally adjusted basis, the Internet Vacancy Index decreased 2.3% month-on-month, The trend estimate showed a monthly fall of 2.8%.
In New Zealand, New Zealand shares rallied again as a whiff of recovery emerges about the forthcoming earnings season, amid an accumulation of more promising news about the world economy. The NZX50 Index shot up 47.25 points, or 1.12%, to 4,247.546, it's highest since late October 2007, before the global financial crisis. Leading the index higher today was infrastructure investor Infratil, up 4.15% to NZ$2.51, followed by children clothes maker Pumpkin Patch, up 3.79% to NZ$1.37, and Freightways, up 2.69% at NZ$4.58.
In South Korea, Seoul shares went higher, with the benchmark Kospi index gained 0.4% to 1964.43 after official data showed the nation's industrial output unexpectedly climbed 0.8% in December from November. Samsung Electronics Inc climbed 2.2%, while rival chip maker rose 0.6% after swinging to a quarterly profit, thanks to rising chip demand after the release of new smartphones and other devices.
In China, the Mainland China share market closed higher, thanks to late hour buying activities, led by realty and brokerages shares after government's urbanization plan while the securities regulator plans to expand the investment quota for Taiwan investors. The benchmark Shanghai Composite index climbed up 23.50 points from prior day closure to 2,382.47, while the Shenzhen Composite Index rose 1.33 points to 942.60.
Chinese market moved flatter in narrow range during morning as investors worried about market overheating after the benchmark has surged 22% from four-year low on Dec. 3, 2012 and cautious ahead of key economic numbers later this week and the Lunar New Year holidays starting Feb. 10.
Chinese brokerages players continued their gains, led by China Merchants Securities Co after Taiwan's securities regulator said yesterday the island will double the limit on mainland Chinese institutions. Gemdale Corp led rally in Chinese developers after Fitch Ratings said Chinese homebuilding volumes will rise this year. On downside, China Resources Sanjiu Medical & Pharmaceutical Co led retreat in the healthcare companies after rally into bull market drove valuation stretched to the highest level in almost nine months, while Aluminum Corp led decline in materials issue after announcing it swung to a full year net loss.
In Hong Kong, HK shares rose today, with the benchmark Hang Seng index settled at 23822.06, up by 167 points from prior day closure after surging intraday to levels not seen since May 2011. Most of the blue chips recorded gain today, with telecom, financials, energy, and consumer goods led rally on tracking gain in mainland stocks and easing worries about European sovereign debt problems.
Among HK blue chips, HSBC Holdings Plc rose 0.9% at HK$88.05, while China Mobile advanced 0.7% to HK$85.70. Shares of China Unicom Hong Kong added 1% to HK$12.26, ports operator China Merchants Holdings International Co. gained 2.2% to HK$27.45 and footwear major Belle International Holdings Co rose 2.4% to HK$17.78. Aluminum Corp. of China rose 0.3% to HK$3.76, reversing early losses, in spite warning it will post a loss in 2012. Shirble Store plunged 25% to HK$0.54 after it turned red in the first half of 2012. ENN Energy Energy Holdings slipped 1.1% to HK$37 after saying it plans to issue $500 million zero coupon bonds convertible to 79.8 million new shares.
In Singapore, Singapore shares ended higher, in line with regional bourses, with property developer City Developments and Thai Beverage Plc, a food and beverage company, outperforming the market. The Straits Times Index was up 0.8% at 3,285.90.
City Developments rebounded 3.3% to S$11.80 on bottom fishing. The stock had plunged as much as 12% recently after the Singapore government introduced measures to cool the city-state's property market in mid-January. Shares of SMRT Corp underperformed in Singapore market, falling 2.4% to S$1.64 after the Singapore transport operator reported a 31% fall in third-quarter net profit and brokers warned that its earnings could be dragged further by higher expenses.
In India, the Indian benchmark indices ended the session marginally in the green amid firm global cues. The barometer index, BSE Sensex, regained the psychological 20,000 mark, having alternately moved above and below that level in intraday trade. The Sensex was provisionally up 12.57 points or 0.06%, up 38.83 points from the day's low and off 69.99 points from the day's high.
RIL edged higher after the company said it has raised $800 million via perpetual bonds carrying interest rate of 5.875%. Index heavyweight and cigarette maker ITC edged lower. National Aluminium Company surged after strong Q3 outcome. Titan Industries rose after reporting strong Q3 results. Pidilite Industries scaled a record high after reporting strong Q3 December 2012 result. Interest rate sensitive realty shares edged higher as the Reserve Bank of India (RBI) announced a 25 basis points reduction in its key policy rate viz. the repo rate after a monetary policy review on Tuesday, 29 January 2013. Realty major DLF hit 52-week high.
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