Investors appetite for risk encouraged by better than expected purchasing managers data, which showed that manufacturing activities in mainland China, Germany, UK and US expanded in January, easing concern about global growth. Chinas January manufacturing purchasing managers index (PMI) rose to 50.5 from Decembers 50.3. The Euro-zone manufacturing PMI rose from 46.9 to 48.8 in January. The UK manufacturing gauge rose from 49.6 to 52.1 The Italian PMI jumped 2.5 points to 46.8. The United States ISM manufacturing survey rose a point from 53.1 to 54.
In addition, upward rally was also supported by Greek Finance Minister statement earlier in the day that talks with private creditors on a bond swap deal was one step away. This helped boost sentiment as a deal is critical to Greece securing its next round of bailout funds before a bond repayment comes due in March.
Furthermore, gains across the regional bourses also spirited by tracking strong rally in the Mainland China market after Chinese Premier Wen Jiabao said that the government would support cash-strapped private small businesses with a 15 billion-yuan fund as economic growth moderates in the worlds second-largest economy. Wen said that the government would also extend preferential income tax policies for small enterprises until 2015 and encourage banks to issue special bonds to raise funds to lend to these companies.
Market upward momentum also supported by higher opening of European bourses as well as positive US index futures. European markets heading for a third day of gain on Thursday, as merger talks between Xstrata Plc and Glencore International Plc boosted shares of mining companies. Futures contracts on the Standard & Poors 500 Index expiring in March gained 0.2% today, indicating higher opening of the Wall Street.
Coming to countrywide performances, the Australian stock ended higher for the first time in four days today, pushing up the broader All Ordinaries index by 1%, as risk appetite improved on tracking firm global cues. All sectoral indices ended above the neutral line, with gains were lead by shares of miners and energy companies after sharp rebound in commodity prices overnight, meanwhile shares of banks and financials and property developers also higher on bargain hunting. Industrials stocks jumped after the AIG /PWC Australian Performance of Manufacturing Index expanded for a second consecutive month in January.
Wesfarmers was up 0.6% to A$29.90 after announcing quarterly sales figures, with sales at supermarket chain Coles up 6.7% on the year to A$9.4 billion. The Coles result looks solid and is in line with expectations. Lynas was up 19% to A$1.59 after Malaysian authorities approved a temporary operating licence for its $200 million rare earths processing plant.
Australian Bureau of Statistics Building Approvals data show that the number of dwellings approved fell 1.0% in December 2011, in seasonally adjusted terms, following a rise of 10.1% in November. Dwelling approvals decreased for the month of December in Victoria (-16.7%), South Australia (-9.1%) and New South Wales (-5.0%), but rose in Queensland (24.6%), Tasmania (15.6%) and Western Australia (6.0%) in seasonally adjusted terms. In seasonally adjusted terms, approvals for private sector houses rose 0.2% in December with rises in Western Australia (6.3%) and Queensland (4.7%), while South Australia (-8.3%), New South Wales (-3.7%) and Victoria (-3.4%) fell. The value of total building approved increased 1.9% in December in seasonally adjusted terms, following a decrease of 0.5% in November. The value of residential building increased 1.0% while non-residential building rose 3.3%.
In separate report Australian Bureau of Statistics released International Trade in Goods and Services data for December, showing the balance on goods and services was a surplus of A$1,709m in December 2011, a rise of A$366m on the surplus in November 2011. goods and services credits rose A$621m (2%) to A$27,792m. goods and services debits rose A$253m (1%) to A$26,082m
In Japan, Tokyo stocks rose Thursday on hopes for the global economic outlook, with the benchmark Nikei225 index accumulated 0.76% gain. But the yens rise against the US dollar capped upside momentum.
21 of 33 sectors on the Tokyo Stock Exchange logged gains, with shares from securities & commodity futures outperformed the benchmark index, powered by better than expected earnings report from Nomura Holdings and on optimism increasing brokerage income after surge in trading volume. Trading volume totaled 2.25 billion shares, the third-highest figure for the year Shares in Daiwa Securities Group rose 4.5% at 281 yen. Nomura Holdings surged 7.1% to 300 yen after announcing 33% on-year gain in net profit in the October-December period.
Automakers were higher after upbeat JAMA domestic vehicle sales report. Toyota Motor added 1.8% at 2,906 yen and Honda Motor 1.8% at 2,722 yen. Sales of vehicles with engine sizes above 660cc stood at 263,267 in January, up 40.7% on the previous year, as the government restored subsidies for eco-friendly vehicles, the Japan Automobile Dealers Association said. The government gives a subsidy of 100,000 yen for an environmentally friendly passenger car and up to 900,000 yen subsidies for trucks and buses. Toyota was the biggest overall beneficiary of the move, selling 124,633 vehicles, up 47.1% on the previous year, but Honda and Isuzu sales went up proportionately even more, at 59.2% and 60.6% respectively.
Sharp Corp went limit-down of 100 yen to 528 yen after the consumer electronics maker forecasted a full-year net loss of 290 billion yen on Wednesday, blaming falling prices, a high yen and the global economic slowdown. For the nine months to December it made a net loss of 213.5 billion yen, compared with a 21.83 billion yen profit in the corresponding period in the previous year. During the same period, operating losses came to 9.1 billion yen, reversing operating profit of 66.5 billion yen in the previous year, while sales fell 18.3% to 1.9 trillion yen. For the year to March, the company expects only to break even at the operating level, compared with an earlier forecast of an 85 billion yen profit. It lowered its sales estimate by 8.9% to 2.55 trillion yen from 2.80 trillion yen.
Sumco Corp. locked at lower circuit of 100 yen to 575 yen after company said in the statement to the exchange that it may incur extraordinary loss of approx 58.2 billion yen as business restructuring expenses in relation to the plan as well as reversal of deferred tax assets of 27.3 billion yen after considering uncertainties in the market environment, which will result in net losses of about 85 billion yen ( previous forecast of 9 billion net loss) for the fiscal year ended January 31, 2012.
In China, the Shanghai Composite Index ended 2% higher at 2,312.56, as investors chased for bargain hunting across the board after Premier statement to support small firms and banks. Meanwhile, rally was also supported by encouraging manufacturing data in the US, Europe and China.
Chinese banks and financials were up on hopes that Beijing will help banks replenish capital after report that Central Huijin Investment Co might accept lower dividend payout ratios from the lenders to help them replenish capital. Industrial & Commercial Bank of China advanced 2.3% to 4.38 yuan, China Construction Bank 2.3% to 4.85 yuan, and Agricultural Bank of China1.9% to 2.73 yuan.
Agriculture related companies in China jumped on growing hopes for supportive policies for the industry after the central government said yesterday that it would continue to increase subsidies and investment in the agricultural sector as part of its efforts to ensure food supply in the long term. Xinjiang Talimu Agriculture Development Co. locked at 10% upper circuit at 8.22 yuan. Hunan Dakang Pasture Farming Co. jumped by 10% daily limit to 12.03 yuan. Dalian Zhangzidao Fishery Group Co added 2.4% to 23.21 yuan.
In India, Indian markets gained for the third straight session today, with the barometer index, BSE Sensex, was up 0.6% to 17,405.62, on the back of sustained buying visible in the teck, realty and IT stocks. Telecom stocks were mixed after the Supreme Court in its verdict in 2G-telecom scam quashed 122 telecom licenses issued after January 2008, but Bharti Airtel ended 6.5% higher on expectation that the telecom major could emerge as one of the major beneficiaries following todays Supreme Court verdict. Cement stocks rose after monthly dispatches data, with ACC hitting a 52-week high and Ambuja Cements hitting a record high. FMCG stocks also rose.
Among other Asian bourses, the Hong Kong hang Seng Index advanced 2% to 20,739.45. Indonesia Jakarta Composite index added 1.3% to 4,016.90. Singapore Strait Times index dropped 0.13% to 2,901.04. South Korea KOSPI was up 1.3% to 1,984.30. Taiwan TAIEX index escalated 1.4% at 7,652.46.
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