Tokyo market closed three month high as yen fall against the dollar and the euro to the lowest level in about a month prompted investors to buy blue chip exporters, while hopes of interest rate slash boosted up Australian market. Meanwhile firmer trade on key Asia Pacific bourses also boosted risk appetite on the New Zealand, Singapore, and Indian stocks.
Spain sold EUR 2.51 billion of bills on Tuesday. The three-month bills were at average yield of 1.285% versus prior 1.735% in December. The six-month bills were at average yield of 1.847% versus prior 2.435%.
PMI data from Eurozone showed more than expected improvement. Eurozone PMI manufacturing improved to 48.7 while PMI services rose to 50.5. German PMIs were strong with manufacturing PMI rose to 50.9 while services PMI rose to 54.5.
Market gains were, however, limited as many investors opted wait and see stance amid uncertainty over the Greek situation on lack of progress on Greeces debt-swap talks overnight, which raised concerns about a disorderly default by the country. Greece is trying to get its creditors to swap Greek government bonds for new ones that have half the face value. Greece faces an important bond repayment deadline in March.
Uncertainties over the Greek situation remain on the environment after Eurozone finance ministers rejected private investors proposal on the debt swap deal. The common ground between private bondholders and EU are not found yet. IIF has said they made the maximum offer already but euro zone ministers saying that the IIF proposal would leaves debt substantially above 125% of GDP in 2020, missing the target of 120% of GDP.
Market participants also like to see the economic data, which is going to release both side of the Atlantic Ocean later in the global day on Wednesday, to judge about the health of global economic growth. In the European session, German IFO business climate for January and U.K. advanced fourth quarter GDP, Bank of England minutes of its January meeting also schedule to release today. Meanwhile, in the US, house price index for November and pending home sales for December are set for release. The Federal Reserve will release rate forecasts for the first time today.
Back to countries, the Australian financial market ended higher, with the benchmark All Ordinaries Index up by 1%, registering first gain in the week, as broad based buying appetite on growing expectation of rate cut from the central bank after domestic inflation eased in December quarter. Almost all sectoral indices were in green, with shares from banks and financials, industrials, mining, and retailers led gains.
Australian banks were the best performers on the S&P/ASX200 index on expectation that the Reserve Bank of Australia may cut interest rates in the coming months after official data showed inflation was continuing to slow. Westpac Bank advanced 3.5% to A$21.30, Commonwealth Bank 2.4% to A$51, NAB Bank 2% to A$24.20, and ANZ Bank 2.2% to A$21.42
The Australian Bureau of Statistics released CPI data today, showing domestic inflation was unchanged in the December quarter 2011, compared with a rise of 0.6% in the September quarter 2011. The CPI rose 3.1% through the year to the December quarter 2011, compared with a rise of 3.5% through the year to the September quarter 2011. The most significant price rises in the December quarter 2011 were for domestic holiday travel and accommodation (+7.3%), rents (+1.0), telecommunication equipment and services (+1.1%), beer (+1.2%) and automotive fuel (+0.7%). The most significant offsetting price falls were for fruit (–13.4%), pharmaceutical products (–5.6%), vegetables (–5.0%), audio, visual and computing equipment (–3.4%), international holiday travel and accommodation (–1.9%) and motor vehicles (–1.2%).
In Japan, the Tokyo financial market posted gain for second consecutive day in row, with the Nikkei225 index up 1.12% from prior day to close Wednesday session at 8,883.69, a highest level last seen on Oct. 31, 2011, as fall in yen against the euro and the US dollar improved appetite for risky assets. Almost all sectors ended up, with shares of shippers, exporters, and rubber products led gain.
Shares of Apple suppliers, including Toshiba, Ibiden, and Murata Manufacturing surged after Apple Inc. reported earnings that sailed past analyst estimates. The trio added 1.8% at 344 yen, 3.3% at 1,623 yen, and 2.7% at 4,260 yen, respectively.
Automakers were higher on report that Nippon Steel Corp. agreed to cut material prices for Japans biggest carmaker. According to Nikkei newspaper report, the agreement represents a reduction of 5,000 yen a ton for the six months ending March 31 from the first-half ended September. Toyota Motor surged 1.9% to 2,857 yen, Nissan Motor Co 2.5% to 739 yen, Mazda Motor 4.6% to 138 yen, and Honda Motor 3.8% to 2,773 yen.
The Japanese currency fell to a one-month low against the greenback and the European currency. Yen was presently at 77.95 against the dollar, the lowest since Dec. 29. Against the euro, the yen weakened to 101.52 from 100.20 at the close of trading yesterday in Tokyo. A weaker yen makes Japanese goods less expensive overseas and improves repatriated earnings.
The Japan posted a trade deficit of 2.492 trillion yen in 2011, marking the first red ink in 31 years, as the March quake-tsunami and strong yen hit exports for 2011, and high fuel costs pushed up import bills, according to preliminary data released Wednesday by the Finance Ministry. Exports fell 2.7% on the year to 65.55 trillion yen. Imports expanded 12.0% to 68.04 trillion yen. Japans last trade deficit, in 1980, was 2.6 trillion yen. In 2010, the country logged a trade surplus of 6.634 trillion yen.
Japan saw a merchandise trade deficit of 496.53 billion yen in December. Imports climbed 5.6% on year while Exports contracted 8.3% on year
The Japan central bank forecasted on Tuesday that domestic economy might shrink 0.4% in fiscal 2011, a reversal of its previous projection of 0.3% growth. The Bank of Japan said it expected growth of 2% in fiscal 2012, a slight reduction from its previous prediction of 2.2% growth. The bank said the reversal in the forecast was due to past GDP statistics being revised, as well as the financial slowdown in the rest of the world. The BOJ said that the outlook was for moderate recovery as the pace of recovery in overseas economies picks up and reconstruction-related demand after the (March 2011) earthquake disaster gradually materializes.
In India, the barometer index, BSE Sensex, was up 0.44% to 17,070 aroundlate afternoon, regaining the psychological 17,000 mark today, tracking cues from other Asian markets and higher opening og European bourses. Data showing resumption of buying by foreign funds on Tuesday, 24 January 2012, also underpinned sentiment. The market breadth, indicating the overall health of the market, was strong. Index heavyweight Reliance Industries (RIL) edged higher for the second day in a row. Metal stocks rose after LMEX, a gauge of six metals traded on the London Metal Exchange, gained 0.3% on Tuesday, 24 January 2012. IT stocks gained after strong first quarter results by US tech major Apple Inc. FMCG stocks rose after good Q3 results announced by FMCG companies recently. Capital goods stocks declined on profit taking after recent gains. Sugar stocks rallied on firm global sugar prices.
Powered by Capital Market - Live News
