logo
  

Asian Shares Rise In Cautious Trade

Asian Market 100912 30May16

Asian stocks rose broadly on Monday as a weaker yen and steadier oil prices added to optimism about the health of the U.S. economy. Investors shrugged off comments by Federal Reserve Chair Janet Yellen suggesting than an interest rate hike could be around the corner.

Chinese shares closed marginally higher ahead of manufacturing data due on Wednesday. The benchmark Shanghai Composite inched up 1.41 points or 0.05 percent to 2,822.45 while Hong Kong's Hang Seng index closed 0.26 percent higher at 20,629.39.

Japanese shares hit a one month high as U.S. rate hike bets and media reports that the government would delay a sales tax hike scheduled for next April helped the dollar/yen pair to break above 111 levels for the first time since late April.

Investors shrugged off weak retail sales figures, which showed that the country's retail sales growth fell in April for the second consecutive month, underscoring weakness in private consumption.

The Nikkei average rose 233.18 points or 1.39 percent to close above 17,000 points for the first time in a month, while the broader Topix index closed 1.19 percent higher at 1,366.01. The weaker yen boosted automakers, with Honda Motor, Mazda and Nissan climbing 3-4 percent.

Electronics maker Panasonic rallied 3.1 percent, energy explorer Inpex Corp added 1.5 percent and Fast Retailing, owner of clothing retailer Uniqlo, advanced 1.3 percent. Toshiba Corp jumped 4.2 percent after JP Morgan raised its rating on the stock.

Australian shares ended flat near nine-month highs, as gains in energy stocks offset weakness in the mining sector. The benchmark S&P/ASX 200 index and the broader All Ordinaries index moved in a narrow range before finishing marginally higher at 5,408 and 5,473 respectively.

Santos, Woodside Petroleum, Oil Search and Origin Energy rose between 0.7 percent and 1.5 percent after oil prices gained about 2 percent last week to post a third consecutive week of gains, boosted by a larger-than-expected weekly draw on inventories. LNG soared 6.5 percent and Worleyparsons rallied 3.1 percent.

Cleaning company Spotless Group Holdings advanced 5.5 percent after reaffirming its earnings forecast and unveiling a plan to sell its laundry business. Pies and frozen desserts supplier Patties Foods soared 17.7 percent after receiving a non-binding takeover proposal from private equity firm Pacific Equity Partners.

Mining giant BHP Billiton shed 0.7 percent and smaller rival Fortescue Metals Group lost 1.3 percent, tracking weakness in Dalian iron ore future prices. Gold miners Newcrest, Evolution Mining and Northern Star Resources fell 2-6 percent as gold hit three-month lows on a stronger dollar.

The big four banks closed down between 0.2 percent and 0.9 percent after an industry survey showed sales of new homes in Australia fell in April after a surprisingly strong surge the previous month.

Seoul shares edged lower despite a central bank survey portraying improvement in manufacturing business confidence. The Kospi average slid 2.04 points or 0.10 percent to 1,967.13 on institutional selling. Hyundai Merchant Marine shares surged by the daily permissible limit of 30 percent after the company said it would reach an agreement soon on charter-fee cuts with third-party ship-owners.

New Zealand shares hit another record high, with the benchmark S&P/NZX 50 index closing 27.09 points or 0.39 percent higher at 7,019.64. While Air New Zealand and Tower jumped around 4 percent each after recent steep losses, Skellerup Holdings and Steel & Tube Holdings fell over 2 percent each.

India's Sensex was moving up 0.2 percent after climbing more than 5 percent last week. Indonesia's Jakarta Composite index was rising 0.4 percent and the Taiwan Weighted added 0.9 percent while Malaysia's KLSE Composite was declining 0.3 percent and Singapore's Straits Times was marginally lower.

On Wall Street, stocks posted modest gains on Friday to cap off their strongest week since March, as investors welcomed Yellen's comments on growth and the interest rate outlook.

During a conversation with Harvard Professor Gregory Mankiw, Yellen said she expects the economy to continue to improve and it may be appropriate for the Fed to raise rates in the coming months.

The second reading on first-quarter U.S. GDP was revised higher and a gauge of consumer sentiment remained at an eleven-month high in May, giving investors a reason to believe that the struggling U.S. economy is finding its legs.

The Dow rose 0.3 percent on Friday, while the Nasdaq and the S&P 500 gained 0.7 percent and 0.4 percent, respectively, to reach their highest levels in over a month.

For comments and feedback contact: editorial@rttnews.com

Major central banks, led by the U.S. Fed, dominated the economics scene this week with some delivering histroic shifts. In the U.S., the Fed was in focus as Chair Jerome Powell announced the latest policy decision and forward guidance. In Asia, all eyes were on the Bank of Japan as markets waited to see if the central bank would exit its ultra loose monetary policy. Find out how the Swiss central bank gave a surprise in Europe and learn what is the path ahead for U.K. interest rates.

View More Videos
Follow RTT