News Column

Asian Stocks Rebound On Offshore Cues

July 14, 2014

CANBERA (Alliance News) - The Asian markets rebounded from last week's losses on Monday after Portugal authorities acted quickly to help ease wider market fears over a possible banking crisis. Risk appetite improved a little bit even as investors waited for cues from a slew of US earnings and Federal Reserve Chair Janet Yellen's semi-annual testimony to the Senate and House Committees this week.

Chinese shares rose the most in a month, helped by gains in automakers after the government decided to waive its 10% purchase tax on "new energy vehicles" which include electric cars, plug-in hybrids, fuel-cell and solar-powered cars. The benchmark Shanghai Composite index rose 0.96% to 2,066.65, its highest level in four weeks.

Hong Kong'sHang Seng index gained 0.49% to finish at 23,346.67 ahead of Chinese GDP, retail sales, industrial production and fixed asset investment figures, all set for release on Wednesday.

Japanese shares gained ground, with a weaker yen and gains on Wall Street Friday underpinning sentiment ahead of a Bank of Japan policy board meeting finishing Tuesday. The benchmark Nikkei average rose 0.88% to 15,296.82, snapping a five-day losing streak, while the broader Topix index gained 0.82%.

The central bank is expected to keep interest rate unchanged at 0 to 0.10%, while targeting monetary base expansion at an annual pace of 60-70 trillion yen. BoJ Governor Haruhiko Kuroda will hold a press conference following the monetary policy announcement.

Sumitomo Dainippon Pharma Co. soared 5.4% after Canada approved its drug Aptiom, used for the treatment of partial-onset seizures in patients with epilepsy. Asahi Glass gained a percent despite reports that its first-half operating profit likely fell 30%. SoftBank Corp. jumped 2.3% on a Nikkei report the company is nearing a deal to acquire T-Mobile US Inc. from German parent Deutsche Telecom AG . Oil & gas explorer Inpex Corp slipped 0.2% after crude prices fell sharply last week on signs of a revival in Libyan supplies.

On the economic front, the country's industrial output rose more than expected in May, revised figures showed. Industrial production rose 0.7% from the previous month versus 0.5% estimated in the preliminary report on June 29, data from the Ministry of Economy, Trade and Industry showed.

Australian shares posted modest gains, led by financials ahead of the release of minutes from the Reserve Bank of Australia's July meeting on Tuesday. The benchmark S&P/ASX 200 index rose half a percent to 5,512.3. The big four banks closed up about half a percent each, mining giant BHP Billiton rose 0.8% and Rio Tinto advanced 0.3% ahead of its production report due on Wednesday. Smaller rival Fortescue Metals Group fell 2.3%, extending recent losses after missing full-year export guidance.

David Jones rose 1.3% as shares emerged from a trading halt. Karoon Gas Australia rallied 2.8% after denying reports it has taken a formal decision on a share buyback. Retailer Wesfarmers rose 0.3% and Woolworths added 0.7%. Woodside Petroleum slid 0.4% after the country's biggest oil producer announced it would take a majority stake in Beach Energy's exploration project in Tanzania.

Seoul shares rebounded from last week's losses as worries over the financial health of a major Portuguese lender eased. The benchmark Kospi average finished up 0.26% at 1,993.88 after losing a percent last week. The South Korean won edged up against the dollar after posting its worst single-day loss in two months on Friday.

Hyundai Hysco Co. dropped 1.4% after the US imposed duties on steel pipe imports from South Korea and eight other nations. Samsung SDI jumped 2.7% after unveiling plans to build one more production line for electric vehicle batteries this year. Builder Hyundai Engineering & Construction rose 1.3% and Daewoo Engineering & Construction rallied 3.4% on hopes the incoming finance minister will announce measures to revitalize the property market.

New Zealand shares gained ground, with sentiment aided by firm regional cues. The benchmark NZX-50 index rose 0.53% to 5,127.87. Online accounting software provider Xero rose a little over 2% to USD25.25, casino operator Sky City Entertainment Group rallied 2.2%, retailer Kathmandu Holdings jumped 2.5% to a two-week high and heavyweight Telecom Corp rose 1.3% to a month high. Energy stocks closed mostly higher, with Genesis, Meridian Energy and Contact Energy rising between 0.6% and 1.7%.

In economic releases, New Zealand's house price index dropped 0.3% from the previous month in June as restrictions on low-equity loans curbed demand at the cheaper end of the market, data from the Real Estate Institute of New Zealand showed. Separately, the latest survey from Business New Zealand revealed that New Zealand's services sector activity, which accounts for about two thirds of the economy, expanded at a slightly accelerated pace in June over May.

Elsewhere, Malaysian shares were marginally higher and the Taiwan Weighted average rose 0.3%, while the benchmark indexes in India, Indonesia and Singapore were down between 0.1% and 0.2%.

Singapore's gross domestic product expanded 2.1% year-over-year in the second quarter of 2014, the Ministry of Trade and Industry's advance estimates showed. That missed forecasts for an increase of 3.5% following the downwardly revised 4.7% gain in the previous three months.

US stocks rebounded from recent losses on Friday as Wells Fargo's quarterly results came largely in line with estimates and investors braced for a busy week of earnings and economic news. The Dow and the S&P 500 rose about 0.2% each, while the tech-heavy Nasdaq advanced 0.4%.

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Source: Alliance News

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