News Column

Asian Stocks Muted Ahead Of Fed Announcement, US GDP Data

July 30, 2014

CANBERA (Alliance News) - Asian stocks ended mixed on Wednesday, with Seoul shares rallying on optimism about the domestic economy, while the markets elsewhere saw muted performance ahead of US GDP data and the Federal Reserve's monetary policy announcement due tonight. Both the EU and the US stepped up sanctions against Russia and the International Monetary Fund warned of potential risks to global growth, raising caution among investors.

Japanese shares ended firmly in positive territory, as a weaker yen and solid earnings reports offset disappointing industrial production data. The benchmark Nikkei average closed up 0.18% at 15,646.23, a fresh six-month high, while the broader Topix index gained 0.1%. Japan's industrial output fell 3.3% in June, after a 0.7% gain in May as companies curbed production due to a pile-up in inventories, official data showed, falling below forecasts for a decline of 1.2%.

Honda Motor rallied 3.1%. The automaker increased its full-year sales and profit forecasts after posting better-than-expected earnings for the June quarter. Construction machinery manufacturer Komatsu inched up marginally as it reported increased revenues and operating income for the three months to June. Hitachi Construction Machinery tumbled 3.2% after cutting its profit forecast for the year to March.

Daiwa Securities gained 1.8% despite the brokerage firm reporting a drop in fiscal first-quarter profit. Nomura dropped 1.4% after reporting a 70% decline in quarterly profit. Budget carrier Skymark Airlines plunged 13.6% after Airbus called off a deal to deliver six A380 jets to the Japanese firm.

Chinese shares fell marginally, snapping six days of gains. The benchmark Shanghai Composite index slipped 0.09% to 2,181.24, dragged down by banks and property developers. PetroChina shares climbed 3.1% after the government launched its corruption investigation into former security chief Zhou Yongkang.

Hong Kong'sHang Seng index rose 0.37% to 24,732.21, rising for the seventh straight day.

Australian shares ended solidly higher, led by gains in banks. The benchmark S&P/ASX 200 index rose 0.62% to 5,622.9, a fresh six-year high. Commonwealth Bank of Australia gained a percent to close at a record high, ANZ advanced half a percent, Westpac rose 0.3% and NAB edged up 0.2%. Insurer QBE rallied 4.5%, a day after issuing a profit warning.

Resource stocks ended mixed, with Rio Tinto adding half a percent and Fortescue Metals Group gaining 2.1%, while BHP Billiton eased 0.2% and Newcrest slid 0.4%. In the energy sector, Woodside, Oil Search, Santos and Origin Energy all rose about half a percent each. Tabcorp Holdings rose 1.2% after it agreed to buy the ACT government's gaming business ACTTAB for USD105.5 million.

Seoul shares rose sharply to hit a three-year high on continued buying by foreign investors on expectations the government's latest economic stimulus package would spur economic growth. The benchmark Kospi average gained a percent to finish at 2,082.61, its highest level since mid-2011. Offshore investors bought shares worth a net 596.5 billion won, extending their winning streak for the 12th consecutive session, preliminary data showed. Shipbuilder Hyundai Heavy Industries bucked the uptrend to end down 9.5% after the company posted its record quarterly loss.

On the economic front, South Korea's industrial output grew at its fastest pace in four years and nine months in June, a government report showed, spurring optimism the economy is gaining traction. Output expanded 2.9% from the previous month following a revised 2.8% decline in May. Another report based on a survey by the Bank of Korea showed that confidence among entrepreneurs in South Korea continued to recede for the third straight month in July.

New Zealand shares extended declines for a third day amid mixed global cues. The benchmark NZX-50 index dropped 0.14% to 5,158.55, with Telecom Corp shares falling sharply on the heels of an analyst downgrade. Shares of the country's largest telecommunications provider fell 2.6%, while biotech firm Pacific Edge led the gainers, climbing 7.1% to 75 cents. Units in Fonterra Shareholders' Fund added 2.1% after Fonterra Co-operative Group cut its forecast milk payout for the 2015 season, citing weaker global dairy prices and high New Zealand dollar.

In economic releases, the total number of building consents issued in New Zealand gained a seasonally adjusted 3.5% in June from the previous month, Statistics New Zealand said - coming in at 1,950. That follows a 4.6% decline in May.

Elsewhere, Singapore's Straits Times index was marginally lower, while the benchmark indexes in India, Malaysia and Taiwan were up between 0.1% and 0.6%.

US stocks finished lower on Tuesday, as investors digested news of fresh sanctions against Russia, mostly positive earnings reports and mixed economic reports on consumer confidence and home prices. The Dow shed 0.4%, the tech-heavy Nasdaq slipped 0.1% and the S&P 500 dropped half a percent.

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Source: Alliance News

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