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Most markets in the Asia-Pacific region closed higher on Wednesday, tracking the positive lead from Wall Street. Positive trade data from Japan and an announcement of an economic stimulus package in Hong Kong as well as higher commodity prices lifted sentiment across the markets. However, South Korea’s KOSPI Index ended in negative territory on increasing concerns over security in the region after North Korea declared that the armistice that ended the Korea War in 1953 is no longer valid.
The Nikkei 225 Average opened sharply higher at 9,427 compared to its previous close at 9,311, led by positive cues from Wall Street, and continued to surge ahead to a high of 9,491 in morning session. Positive economic data on the home front, which signaled that exports may see a modest recovery from the recent slump, and the weakening of the local currency against the greenback also lifted sentiment. Due to a lack of buying support at higher levels, the index gave back some of its gains and ended the session with a gain of 128 points, or 1.37%, at 9,439.
On the economic front, the Ministry of Finance revealed that the country registered a merchandise trade surplus of 69.0 billion yen in April, compared to expectations of a trade deficit of 69.5 billion yen, marking the third straight month of surpluses. Exports plummeted 39.1% year-over-year, while imports fell 35.8%. On a seasonally adjusted basis, exports were up 1.9% in April, the report revealed.
The minutes released by Bank of Japan for its recent meeting on April 30 revealed that board members felt that there was no need for additional policy steps to combat the economic slowdown. The number of downgrades among Japanese firms may continue to increase, the board said.
Nikon Corp advanced 3.48% after the company announced plans to trim its workforce by 1,000 employees in its effort to reduce costs. Seven & I Holdings lost 1.47% after the company revealed that it would shut down the Sapporo outlet of group company Seibu Department Stores Ltd. by the year-end and sell the property after its closure.
Among banking stocks, Mitsubishi UFJ advanced 2.13%. Mizuho Financial gained 1.31%, Resona Holdings edged up 0.07%, and Sumitomo Mitsui added 0.80%.
Notwithstanding a bounce in oil prices, oil stocks ended mixed. Inpex lost 1.67% and Nippon Oil shed 1.70%, but Showa Shell advanced 2.12%.
In Sydney, the All Ordinaries Index, which closed Tuesday's trading session at 3,782, opened higher at 3,791 and continued to surge ahead to 3,828 in early trading on positive cues from Wall Street and higher commodity prices. However, traders preferred to sell stocks in order to participate in the A$2.85 billion capital-raising program of ANZ Bank, dragging the index lower. Amid alternate bouts of selective buying and selling, the market ended with a gain of 13.70 points, or 0.36%, at 3,795. The benchmark S&P/ASX 200 Index followed a similar trend and ended up at 3,801, representing a gain of 12.7 points or 0.3%.
Resource stocks advanced, led by higher commodity prices in the international market. Oil stocks also advanced after crude oil prices continued to move northward. Woodside Petroleum added 0.28%, Santos gained 1.54% and Oil Search advanced 2.08%.
Stocks across the sectors witnessed selling, as investors raised funds to participate in the capital-raising program of ANZ Banking. The bank is planning to raise $2.85 billion through a share placement. The bank intends to utilize the proceeds from the issue for funding its potential acquisition of the assets of Royal Bank of Scotland and for other corporate purposes. Financial stocks saw weakness, while gold and retail stocks also came under selling pressure.
In Hong Kong, the Hang Seng Index surged up more than 5% after the government announced a fresh stimulus package equivalent to approximately US$2.2 billion, involving tax cuts, fee waivers and spending. All but one of the 42 components of the Hang Seng Index posted impressive gains. The Hang Seng index ended the day with a gain of 5.26% or 897 points at 17,885.
Property stocks advanced on expectations that the stimulus package would spur economic activity. Henderson Land soared 7.71% and SHK Property gained 5.13%. Except New World Development, which edged down 0.28%, all other stocks in the sector posted gains.
Li & Fung, which supplies clothes and toys to major retailers in the U.S. such as Wal-Mart and Target Corp., was the major gainer following the upbeat consumer confidence reading in the U.S. The stock soared 10.82%.
In South Korea, the benchmark KOSPI Index ended in negative terrain, as security concerns overshadowed the positive sentiment across the region. After showing some degree of volatility, the index finally ended in negative territory with a loss of 10.02 points, or 0.73% at 1,362.
Heavyweight Samsung Electronics edged down 0.53% on heavy selling pressure. Among technology stocks, Hynix Semiconductor declined more than 4% after a U.S. court gave an unfavorable verdict on its patent infringement case against a chipmaker based in the U.S.
Shipbuilders dragged the market down on bleak investor confidence. Daewoo Shipbuilding lost 5.75% and Samsung Heavy Industries slipped 2.08%. However, Hyundai Heavy Industries ended in positive territory, posting a gain of 1.16% after reporting a 15% rise in sales during April on an annual basis.
In India, the stock market ended higher, mirroring the positive sentiment across the Asian markets and the gains on Wall Street. The broader market witnessed across-the-board buying interest, with mid-cap and small-cap stocks leading the way. Hectic activity on the options front ahead of the close of May series tomorrow also lifted the indices. The BSE Sensex closed at 14,110, up 520.41 points, or 3.84%.
Among the other major markets in the region, China's Shanghai Composite Index gained 44.35 points or 1.71% to close at 2,633, Indonesia's Jakarta Composite Index added 1.90% or 35.26 points to close at 1,893, Singapore's Strait Times Index ended higher at 2,306, representing a gain of 67.29 points or 3.01% and Taiwan's Weighted Index rose 207.33 points or 3.10% to 6,890. |