News Column

Asian Stocks Rise On Upbeat US Data

August 20, 2014

CANBERA (Alliance News) - Asian stocks rose on Wednesday, with sentiment buoyed by upbeat US housing data and easing geopolitical concerns. Overall gains were muted as investors adopted a cautious stance ahead of the release of minutes from the US Federal Reserve's July meeting due later in the day and the Jackson Hole gathering of global central bankers on Friday.

Chinese shares bucked the regional uptrend to end lower as investors took some profits off the table in large-cap shares fearing the new IPOs will drain market liquidity. The benchmark Shanghai Composite index slipped 0.23% to 2,240.21, with media stocks bearing the brunt of the selling after a three-day rally. Hong Kong'sHang Seng index rose 0.15% to 25,159.76, a fresh six-year closing high.

Japanese shares ended a tad higher, extending gains for the eighth consecutive session. The benchmark Nikkei average closed up 0.03% at 15,454.45, erasing early gains driven by a weakening yen, while the broader Topix index inched down marginally. Nippon Telegraph & Telephone Corp rose 2%, Mitsubishi Chemical Holdings advanced 2.6%, Sumitomo Heavy Industries climbed 2.8% and Pacific Metals jumped 3.2%. Heavyweights such as Fanuc, SoftBank and KDDI Corp. rose between 0.2% and 1.4%.

Hitachi Metals soared 3.2% after unveiling plans to acquire Waupaca Foundry Inc. for USD1.3 billion in cash. Among major losers, T&D Holdings, Kobe Steel, Chubu Electric Power and NEC Corp rose about 2% each. Chugai Pharmaceutical Co. declined 1.7% on profit taking after sharp gains earlier this week. Mitsubishi Electric Corp. slipped 0.2%. The company said that it has received an order from Republic of China'sNational Development and Reform Commission for payment of a surcharge amounting to 44.88 million yuan, or approximately 700 million yen.

In economic news, Japan posted a merchandise trade deficit of 963.99 billion yen in July, the Ministry of Finance said - remaining in the red for a record 25th consecutive month. The headline figure missed forecasts for a deficit of 713.9 billion yen following the 823.2 billion yen shortfall in June. Exports grew 3.9% year-over-year to 6.188 trillion yen, while imports rose an annual 2.3% to 7.152 trillion yen. Another report showed that Japan's all industry activity declined as expected in June largely due to the contraction in industrial production.

Australian shares erased early losses to end modestly higher, as banking stocks gained ground, offsetting weakness in the mining sector. Westpac, Commonwealth, NAB and ANZ rose between 0.3% and 1.4%, lifting the benchmark S&P/ASX 200 index up 0.2% to 5,634.6. BHP Billiton tumbled 3.9% to register its biggest fall in five months as the mining giant announced plans to offload some of its smaller assets into a new company.

Rival Rio Tinto shed 0.6% and Fortescue Metals Group dropped 1.5% after posting a 56% jump in full-year profit. Food and beverage company Coca-Cola Amatil declined 2.1% after flagging a second consecutive drop in full-year earnings. QBE Insurance Group shares soared 5.6%. The insurer announced plans to partially float its mortgage insurance business in 2015 after posting an 18% drop in first-half net profit.

On the economic front, the Australian economy remained slightly below trend in July, indicating that growth in the Australian economy will stay below trend in the second half of 2014 and into 2015, the results of a survey by Westpac Bank and Melbourne Institute revealed. The leading index eased 0.1% from the previous month in July after increasing 0.1% in June.

In his opening statement to the House of Representative Standing Committee on Economics, in Brisbane, RBA Governor Glenn Stevens signaled that there will be recovery in the Australian economy, if the central bank persists with the low cash rate.

Seoul shares ended largely unchanged amid institutional selling. The benchmark Kospi average edged up 0.08% to 2,072.78. Institutional investors offloaded shares worth a net 278.2 billion won, while overseas investors bought shares worth a net 212.5 billion won, preliminary data showed.

Electronics giant Samsung Electronics gained 0.6%, automaker Hyundai Motor advanced 0.7% and memory chipmaker SK Hynix climbed 3.5%, while shipbuilder Hyundai Heavy Industries tumbled 3.1% and SK Innovation, the owner of top refiner SK Energy, slumped 6.3%.

New Zealand shares rose on optimism over corporate earnings as Fletcher Building and Trade Me Group posted encouraging full-year results. The benchmark NZX-50 index gained 0.51% to finish at 5,140.34. Fletcher Building shares rose 0.9% as the country's biggest listed company reported a 4% gain in annual profit, beating estimates.

Online auction site Trade Me rallied 2.6% after its full-year profit met forecasts previously published by the company. Energy companies paced the declines, with TrustPower, Genesis Energy and Meridian Energy falling 1-2%.

Elsewhere, the key benchmark indexes in Indonesia, Malaysia, Singapore and Taiwan were up between 0.2% and 0.5%, while India's Sensex was down 0.4% after gains in the last six consecutive sessions.

US stocks rose overnight, with solid earnings from Home Depot and encouraging economic data on inflation and the housing market underpinning sentiment. Consumer prices rose at the slowest pace in five months in July, the Labor Department report showed, easing recent concerns about the outlook for interest rates. The Dow and the S&P 500 rose about half a percent each, while the tech-heavy Nasdaq added 0.4% to close at a fresh 14-year high.

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Source: Alliance News

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