Todays rally in the Asian markets were credited to reports stated European Union leaders reached an agreement to introduce a permanent eurozone bailout mechanism in July, and 25 out of 27 EU countries agreed to sign a pact for stricter budget discipline.
Meanwhile better than expected Japan industrial production for December, talks of chinas liquidity injections via investing pension funds in the capital market, and positive statement from Greece PM about debt-swap talks also improved risk sentiments.
Japanese industrial production rose a seasonally adjusted 4% in December from the previous month as the impact of the flooding in Thailand on Japanese manufacturers began to ease.
Greek Prime Minister Papademos told reporters after the European Union summit in Brussels that Greece aims to complete debt-swap talks with bondholders by the end of this week. Papademos said he is strongly committed to reaching a deal. The country faces a 14.5 billion-euro bond payment on March 20, 2012.
But market gain across the regional bourses were limited, as lingering uncertainty of the debt swap agreement between Greece and its private-sector creditor and mounting fears that Portugal would follow Greece into a debt restructuring. Investors are concerned that Portugal may need another bailout or a Greek-style debt restructuring if it cannot regain access to the capital markets. In the European morning, the Portuguese 10-year government bond yield was at 16.218%.
Coming to country wise movement, the Australian stock market ended slight lower, as losses in shares of energy, mining, realty, and financials issues overshadowed gain in retailers and consumer goods stocks.
Consumer staple sector outperformed the S&P/ASX200 index, jumped 0.7%, buoyed by speculation of consolidation in the sector after Woolsworth announced it would sell its consumer electronics chain Dick Smith after announcing its first-half year ended December sales of A$29.7 billion, a 5% increase on the previous year. Shares of Woolsworth advanced 1.4% to A$24.79.
Telecom sector was second best performer, gaining 0.6%, powered by rally in sector heavyweight Telstra after announcing it has won a contract to build Western Australias regional mobile communication project. Share of Telstra added 0.6% to A$3.33. Financial sector was 0.3% down, after ratings agency Fitch put Australias big four banks on a credit downgrade watch yesterday because of their strong reliance on overseas funding. NAB declined 0.3% to A$23.85, ANZ 0.3% to A$21.41, and Commonwealth Bank 0.7% to A$50.66.
The Japanese benchmark Nikkei Stock Average ended 0.11% higher at 8,802.51, registering first gain in four consecutive sessions, as buying was spirited by better than expected domestic industrial output data for December and substantial buying of Nikkei futures. However, market gain was limited because of yen strength against greenback and doubt about domestic corporate earnings for the April-December period after many companies that released their earnings reported weaker-than-expected figures or substantial profit declines.
Machinery makers gained after Japans industrial production rose 4% in December from the month before. Fanuc Corp gained 1% to 12,810 yen and Hitachi Construction Machinery 2.9% to 1,510 yen.
Sumitomo Mitsui Financial Group Inc. advanced 1.5% to 2,425 yen after Japans second-biggest lender by market value said it will achieve full-year profit forecast and would buy back as much as 80 billion yen of stock.
Advantest Corp surged 7.1% to 875 yen after Daiwa Securities Capital Markets Co raised its rating of the maker of memory-chip testers to neutral from underperform, citing company sales is increasing in South Korea, boosting expectations for an earnings recovery in the fiscal 2012.
Toshiba Corp declined 1.8% to 323 yen after an electronics maker cut its full-year operating profit target by 10% to about 210 billion yen due to weak television sales and a strong yen.
Fujifilm Holdings Corp tumbled 6.9% to 1,807 yen after revised down its net-income forecast by 48% to 28 billion yen, citing fall in net profit was mostly due to weakness of the fundamental trend of recovery in the US economy as well as the sovereign debt crisis in Europe and other factors prompting economic stagnation.
Kao Corp dropped 5.9% to 2,006 yen after a manufacturer of household and chemical products reduced its net-income forecast by 7% to 53 billion yen for the year ending March 31. Company has announced net profit of 49 billion yen for the nine months ended Dec. 31.
Kyushu Electric Power Co tumbled 4.2% to 1,095 yen after the utility reported a 90.5 billion yen loss for the nine months ended Dec. 31, down from a 29.5 billion profit in the year-earlier period.
The Ministry of Economy, Trade and Industry said on Tuesday that Japanese industrial production rose a seasonally adjusted 4% in December from the previous month as the impact of the flooding in Thailand on Japanese manufacturers began to ease. For the October-December period, output fell 0.4% from the previous quarter. It rose 4.3% in the July-September period as the supply chains for parts for cars and electronics recovered after the March 11 earthquake and tsunami. Japans industrial output fell 3.5% in 2011 on the previous year. In separate figures released Tuesday, the government said the jobless rate rose slightly to 4.6% in December from 4.5% in November. Household spending rose 0.5%.
The Chinese benchmark Shanghai Composite index grew 0.3% to 2,292.61, as investors chased for bargain hunting on expectation that market liquidity would improve after Securities Times reported on Tuesday that the investment plan of pension funds will come out as soon as the first quarter, which may pump up to 580 billion yuan worth of funds into the capital market eventually. 6 of 10 SSE sectoral sub-indices were up, with shares from utilities, energy, technology, consumer staples, industrials, and financial issues logged gain, while shares from telecommunication services, consumer discretionary, materials, and healthcare issues logged losses.
Shares of consumer staple issues gained, with breweries producers led rally on hopes for strong earnings after Hebei Hengshui Laobaigan Liquor forecasted its 2011 net profit to rise around 100%. Shares of Hebei Hengshui Laobaigan jumped 8.5% at 22.55 yuan, Jiangsu Yanghe Brewery JSC 2.6% at 127.77 yuan, and Luzhou Lao Jiao 2.5% to 37.11 yuan.
In Hong Kong, the Hang Seng index accumulated 1.14% gain to 20,390.49, rising for a seventh session out of eight, powered by bargain hunting in financials and realty stocks following steep selloff prior day, overshadowing steep fall in steelmakers. Local market opened higher and managed to hold initial gain throughout morning. Meanwhile the benchmark index widened further in afternoon trade on tracking firm opening of the European bourses today.
Aluminum Corporation of China (CHALCO) tumbled 3.8% at HK$3.78 after the aluminum maker warned its net profits for the year 2011 would fall by more than 50% from that for the corresponding period last year, due to Europes debt crisis and impacts of the global economic environment, and steep fall in aluminum prices in the fourth quarter of the year 2011. Meanwhile, the price hike of electricity also increased the production cost of CHALCO.
Angang Steel Co erased 11% to HK$5.58 after steelmaker forecasted a net loss of about 2.15 billion yuan for the year ending 31 December 2011 as compared to the profit of 2.04 billion yuan in the previous financial year. The company said turnaround to loss was mainly attributable to the increase in the prices of the raw materials and fuels exceeded the increase in the prices of steel products; and certain furnaces suspended production for certain period of time for repair and maintenance.
Maanshan Iron & Steel dipped 7.6% to HK$2.68 after the steelmaker warned its net profit for the year 2011 to would decrease by over 50%, cue to the weakened market demand for steel products, falling steel prices, and increases in the prices of fuel and raw materials such as iron ores.
In India, the Bombay Stock Exchange Sensex surged 330.25 points or 2% to 17,193.55. The benchmark Sensex rose nearly 1,740 points or 11.25% in January. Positive global cues and strong earnings by heavyweights supported the markets today. Markets maintained the strong buying momentum throughout the day, led by broadbased buying among sectors like Banks, realty, metal, auto, Oil & Gas and Technology.
ICICI Bank surged 5.9% after announcing 20% year-on-year (y-o-y) growth in net profit at Rs 1,728 crore for the quarter ended December 2011, compared with Rs 1,437 crore in a year ago quarter. State Bank of India jumped 3.9% after the government approved a capital infusion of Rs 7,900 crore in the public sector major.
Tata Global Beverages surged 10%, a day after the company outlined its plans to roll out stores in alliance with global coffee chain Starbucks. The joint venture, in which Tata Global will be a 50 per cent partner, will launch 30-50 outlets this year with an investment of Rs 400 crore ($80 million) to be split equally.
Among other Asian bourses, the Indonesia Jakarta Composite index added 0.68% to 3,941.69. Singapore Strait Times index rose 0.64% to 2,906.69. South Korea KOSPI was up 0.8% to 1,955.79. Taiwan TAIEX index escalated 1.5% at 7,517.08.
Powered by Capital Market - Live News
