News Column

Asian Stocks Rise On Wall Street Cues

May 13, 2014

CANBERA (Alliance News) - Asian stocks rose broadly on Tuesday, with a record close on Wall Street overnight on the back of an improving US economic outlook and optimism about capital market reforms in China underpinning investor sentiment. Investors also digested a raft of Chinese data underscoring weakness in the world's second-largest economy.

China's Shanghai Composite Index slipped 0.1% to 2,051 as investors took some profits off the table following Monday's 2% rally. Coal mining and metal stocks came under selling pressure on concerns the country's economic growth hasn't bottomed out yet.

China's industrial output grew 8.7% in April from a year earlier, slowing slightly from an 8.8% increase in March, data from the National Bureau of Statistics showed. Production was forecast to rise by 8.9%. Retail sales and fixed asset investment also expanded at a slower pace, signaling that the government will struggle to achieve its growth target this year in the absence of any stimulus.

The data follows Monday's figures from the central bank, which showed that China's new yuan-denominated lending amounted to 774.7 billion yuan in April, down from 1.05 trillion yuan in March and below economists' expectations.

Hong Kong'sHang Seng Index, meanwhile, closed 0.4% higher at 22,352, a two-week high. Property developers gained ground on continued expectations the government may relax the city's stamp duty rules.

Japanese shares rallied, with sentiment buoyed by a weaker yen and a slew of positive earnings reports at home. The benchmark Nikkei average jumped 276 points or nearly 2% to finish at 14,425, while the broader Topix Index closed up 1.8%.

Nissan Motor shares soared 5.1%. The carmaker reported a 14% increase in full-year net profit and forecast an operating margin of 5.0% for this financial year excluding China. Other automakers saw widespread buying, with Honda Motor, Mazda and Mitsubishi Motors climbing about 3% each.

Sharp Corp. jumped 5% as the struggling electronics maker said it swung back to a profit in fiscal 2013 after two years of huge losses. Mitsubishi Chemical Holdings rallied 2.2% on a Nikkei report that it plans to buy a majority stake in industrial gas company Taiyo Nippon for USD980 million. Taiyo Nippon shares closed up 10.9% at 889 yen. Hitachi fell 2.9% after the company forecast a drop in profit in the year ending in March.

Australian shares posted strong gains, buoyed by positive leads from the US and European markets as investors awaited the coalition government's first federal budget. The benchmark S&P/ASX 200 rose 0.9% to 5,498, led by miners after JP Morgan raised upgraded its rating on the mining sector to "overweight" from "underweight".

Newcrest, Fortescue Metals Group, BHP Billiton and Rio Tinto rose 1-3%. Northern Star Resources soared 7.6% after it agreed to acquire the Jundee Gold Mine from Newmont Mining for USD82.5 million. Orica tumbled 3.9% after the maker of industrial explosives reported subdued half-yearly earnings.

The big four banks all rose even as disappointing home loan and house price data indicated that Australia's housing boom is starting to pull back from the boom seen late last year. ANZ, Commonwealth and Westpac rose about 0.7% each, while NAB shares advanced 0.9%.

Australian capital city house prices rose a seasonally adjusted 1.7% in the first quarter of 2014, the Australian Bureau of Statistics said, missing forecasts for an increase of 3.0% following the 3.5% gain in the fourth quarter. Meanwhile, the total number of home loans in Australia fell 0.9% in March from the previous month, standing at 52,013. Economist had expected a 1.0% rise.

Seoul shares rallied to their highest level in more than two weeks on foreign fund buying. The benchmark Kospi average rose 0.9% to finish at 1,983. Overseas investors bought shares worth a net 215.4 billion won, snapping an eight-day selling streak, preliminary data showed. Samsung Electronics Co., rose about a percent, extending Monday's 4% rally, after the Dow and S&P 500 hit fresh closing highs yesterday, spurred by a strong rally in technology stocks.

New Zealand shares rose as tech stocks followed their US peers higher. The benchmark NZX-50 Index gained 0.7% to finish at 5,199. Cloud accounting software firm Xero jumped 2.6% and governance app developer Diligent Board Member Services added 0.7%. Infratil advanced 2.2% after the infrastructure investor reported a 5.3% decline in full-year pretax earnings, in line with guidance.

Retirement village developer Ryman Healthcare climbed 3% ahead of its earnings announcement on Thursday, a2 Milk Co. added 2.6% and Telecom Corp of New Zealand closed up 1.7%. Telecommunications network provider Chorus led the decliners on the exchange, falling 2% to USD1.68. In economic releases, food prices in New Zealand gained 0.6% in April from the previous month after easing 0.3% in March, Statistics New Zealand said.

Elsewhere, India's Sensex was rallying 1.5%, hitting a record high for a third consecutive session, after most exit polls showed Narendra Modi-led National Democratic Alliance will form the government at the Centre.

Indonesian shares were little changed and the Taiwan Weighted average edged up 0.1%, while the markets in Malaysia and Singapore were closed for public holidays.

US stocks posted strong gains overnight, as investors brushed off concerns over the situation in Ukraine and cheered Beijing's new blueprint to push ahead with a broad range of capital market reforms. Optimism about merger and acquisition activity also generated some positive sentiment on a day of light economic news. The Dow rose 0.7%, the S&P 500 gained a percent and the tech-heavy Nasdaq climbed 1.8%.

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Source: Alliance News

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