News Column

Asian Stocks Rise After Fed Minutes

July 10, 2014



CANBERA (Alliance News) - Asian stocks rose broadly on Thursday after minutes of the latest Federal Reserve meeting indicated the US central bank was not in a rush to raise interest rates. Mixed trade data out of China, disappointing jobs data from Australia and core machinery figures from Japan capped overall gains to some extent.

Japanese shares fell notably on disappointing core machinery data. The benchmark Nikkei average fell 86.18 points or 0.56% to 15,216.47, extending losses for the fourth day, while the broader Topix index shed 0.91%. Among the prominent decliners, Sumitomo Mitsui Financial Group, Mitsui Engineering & Shipbuilding, Nomura Holdings and Nisshin Steel fell 2-3%. Exporter shares such as Panasonic, Sony Corp, Honda Motor, Toyota Motor, Mazda Motor and Canon closed down between 0.4% and 1.4%, weighed down by a stronger yen.

Core machinery orders, a closely-watched indicator of capital spending, plummeted 19.5% in May from the previous month, the Cabinet Office said, missing forecasts for an increase of 0.7% following a 9.1% contraction in April. On a yearly basis, machine orders tumbled 14.3%. Another report showed that an index measuring activity among tertiary industries rose 0.9% in May from the previous month following a downwardly revised 5.7% decline in April.

Chinese shares ended little changed, with the benchmark Shanghai Composite edging down 0.01% to 2,038.34, as investors digested mixed trade data. Hong Kong'sHang Seng index, meanwhile, rose 0.27% to 23,238.99

China posted a merchandise trade surplus of USD31.6 billion in June, the customs office said, missing forecasts for a surplus of USD36.95 billion. Exports grew 7.2% from a year earlier, missing expectations for a 10.4% increase but up from 7.0% in the previous month, while imports gained an annual 5.5%.

Australian shares recouped early losses to end higher, although gains remained modest in the wake of soft jobs data. Australia's unemployment rate increased more than expected in June, reaching its highest level in 11 years as weak consumer sentiment weighed on business hiring plans, data from the Australian Bureau of Statistics showed. The jobless rate rose to 6% in June, higher than the 5.9% consensus estimate.

The benchmark S&P/ASX 200 rose 0.2% to 5,464.4 after losing 1.1% on Wednesday. Banks ANZ and Commonwealth ended little changed and NAB rose 0.4%, but Westpac eased 0.3%. Big miners BHP Billiton and Rio Tinto both rose 0.4%.

Gold miner Newcrest Mining jumped 3.6% as the precious metal rose for a second straight session on a weaker dollar. Education group Navitas soared 6% on bargain hunting after plunging 31% the day before. Transurban Group added 0.4% after reporting a 13% rise in fiscal 2014 revenue.

Seoul shares rose marginally after Finance Minister nominee Choi Kyung-hwan said he would swiftly introduce measures to stimulate the economy once he takes office. The benchmark Kospi average rose 0.12% to 2,002.84, led by gains in automakers as the South Korean won fell against the greenback. Hyundai Motor rose 2% and its affiliate Kia Motors advanced 0.4%.

The Bank of Korea cut its growth outlook for this year after leaving its benchmark interest rate unchanged at 2.50% for the 14th straight month, in line with expectations. However, the decision was not unanimous. Separately, central bank data showed that export prices in South Korea eased 0.2% in June from the previous month after a 1.6% decline in May.

New Zealand's benchmark NZX-50 index closed up 0.1% at 5,128.01, with growth-oriented stocks pacing the gains amid firmer regional cues. Xero and Pacific Edged rallied about 2.6% each, while heavyweights Telecom and Fletcher Building gained 0.6% and 0.5%, respectively. Meridian Energy led the declines on the exchange, falling 2% to USD1.23.

In economic releases, the manufacturing sector in New Zealand grew at an accelerated pace in June, the latest purchasing managers' index from Business NZ revealed - posting a score of 53.3. That's up from a downwardly revised 52.6 in May.

India's Sensex was up 1.6% after Finance Minister Arun Jaitley unveiled the Modi government's maiden Budget, with proposals to boost growth, lower inflation and keep fiscal deficit under control.

Elsewhere, Indonesia's Jakarta Composite index was rising 1.1% and the Taiwan Weighted average gained 0.8%, while the markets in Malaysia and Singapore were little changed with positive bias. Malaysia's industrial output grew 6.0% year-over-year in May, faster than April's 4.2% growth, official data showed.

US stocks rebounded from a two-day sell-off overnight, as investors cheered better than expected quarterly results from Alcoa and minutes from the latest meeting of the Federal Reserve detailing how the central bank will end its easy monetary policy. The Dow and the S&P 500 rose about half a percent each, while the tech-heavy Nasdaq added 0.6%.



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Source: Alliance News


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