Asia Pacific stocks closed sharp higher on Friday, July 27, 2012, as better than expected US economic data and the ECB Governor Mario Draghi's pledge for full support to the euro rejuvenated appetite for risk assets.
Bargain hunters across the region jumped into the markets for value buying on speculation ECB will unveil some concrete plans and better-than-expected U.S economic data
European Central Bank President Mario Draghi signaled on Thursday that central bank officials are prepared to do whatever is needed to ensure the euro's survival and act on surging bond yields. Draghi said that tackling high sovereign borrowing costs comes within the central bank's mandate, suggesting that the ECB is ready to defend Italy and Spain, whose borrowing costs have hit levels considered unsustainable. His comments came as Spanish policy makers called on the central bank to fight a renewed bout of financial turmoil that pushed the country's bond yields to euro-area records this week.
There are hopes that the ECB will start its asset purchase programme or long-term funding arrangements at its policy meeting next week.
Slew of latest economic data from the United States were mixed, indicating that the economy was still growing, but at a decelerating pace, also encouraging appetite for riskier assets. US durable goods orders rose by 1.6% in June after a similar gain in May. Economists had expected only a rise of 0.4%. Excluding transport and aircraft, orders were up 0.6%. New claims for unemployment insurance benefits decreased by 35,000 in the week ended July 21 to a near 4-year low of 353,000. Economists had expected a result near 380,000. A separate report showed that contracts to buy previously owned US homes unexpectedly declined 1.4% in June.
Markets have been roiled early this week by fears that Spain, the fourth-largest economy among the 17 that use the euro, could need a bailout along the lines of Greece, Ireland and Portugal because its borrowing rates are high.
Around late afternoon, the MSCI Asia Pacific Index spurted 1.6%, headed for its biggest gain since June 29, and paring a weekly drop to 0.6%.
In the Asia Pacific region, the South Korea's Kospi Composite index advanced 2.6% to 1,829.16, while Singapore's Strait Time index lost 0.2%, making both the top gainers and losers respectively in the region.
Amongst other regional bourses, Japan's Nikkei225 index gained 1.46%, Australia's All Ordinaries index rose 1.45%, New Zealand's NZX50 added 0.45%, Hong Kong's Hang Seng index added 2.02%, China's Shanghai Composite index added 0.13%, Indonesia's Jakarta Composite index rose 1.98%, Malaysia's KLSE Composite added 0.06%, Taiwan's Taiex rose 2.2%, and India's Sensex jumped 1.24%.
Back to country wise performances, the Tokyo stockmarket closed sharp higher, with the benchmark Nikkei Stock Average spurted 1.5%, while broader Topix index escalated 1.6%, on tracking strong cues from overnight gains in foreign markets and Japanese yen depreciation against major currencies.
Japanese yen depreciated against other major currencies as demand for safe heaven assets diminished after European Central Bank President pledged to do whatever that was necessary to protect the Eurozone from collapse. Around afternoon JST, the yen is trading around lower 78-level against the US dollar and lower 96-level against the euro.
Among key movers and shakers, Nomura Holdings Inc climbed 5% to 272 yen after Japan's largest brokerage net income topped estimates. The company said current brokerage head Koji Nagai will take over from chief executive Kenichi Watanabe on Aug. 1, who is stepping down to take responsibility for Nomura's involvement in an alleged insider-trading scandal. Mr. Nagai has a strong track record in sales for both retail and institutional investors, having spent his 31-year career mainly in Japan.
Nippon Steel Corp rose 6.7% to 160 yen after the Nikkei newspaper reported that the company agreed to cut material prices for Toyota Motor Corp.
JFE Holdings ended 7.1% higher at 1,061 yen after the steel maker reported a better-than-expected group fiscal year net profit outlook and amid expectations for stronger demand in China. Expectations for stronger steel demand in China grew after Changsha, the capital of central Hunan province, unveiled an ambitious infrastructure development package on Thursday.
Olympus added 3.3% to 1,446 yen after medical-equipment provider Terumo proposed a surprise merger with the firm.
Advantest Corp. slumped 9.4% to 977 yen after operating profit for the first quarter missed analysts' estimates and CLSA downgraded the shares to sell.
In Australia, equities on the Australian share market climbed higher on Friday, July 27, 2012, following a global rally as investors took heart Europe will take every step possible to address its burgeoning debt crisis. Domestic shares accelerated into the Australian close today amid growing optimism over central-bank support for Europe's weakest regions.
The ASX200 benchmark share index closed at its high for the day, adding 62.1 points, or 1.5% - the third-biggest one-day gain this year - to 4209.8 points. The broader All Ordinaries added 60.6 points, or 1.5%, to 4234.4. For the week, the ASX200 rose about 0.25%, adding to the previous week's 2.9% advance. All major sub-indexes were higher, led by a 1.9% surge by materials, while financials rose 1.5%, industrials and energy stocks 1.4% and consumer staples 1.2%.
In China, Key benchmark indices on the Mainland China market finished lackluster session slight higher on Friday, July 27, 2012, as positivity arose from ECB chief's remarks was mostly countered by ongoing uncertainty over market outlook in near term amid a slowdown in domestic economy. The Shanghai Composite Index settled the day 2.76 points or 0.13% higher from prior day to 2,128.76.
Chinese stock market hit lowest level in more than three years on Thursday. The benchmark index ended Thursday's trade at 2,126, a lowest level since March 9, 2009, when benchmark index closed at 2,118.75.
Lenders went up after Credit Suisse statement that Chinese banking stocks have the potential to rally due to overselling. China Construction Bank closed up 1.6% at 3.93 yuan. Bank of China was up 1.1% at 2.72 yuan, China Merchants Bank added 1.7% to 9.75 yuan, and Bank of Communications ended up 1% at 4.22 yuan.
In India, Indian stocks closed modest higher today, with the Sensex provisionally fished trading at 16,856.81, higher by 217 points or 1.3% from prior day, inline with gain in other regional bourses after European policy makers said that they would try their best to preserve the Euro.
India's largest private sector bank by net profit ICICI Bank rose after strong Q1 results. PSU bank stocks declined across the board after three state-run banks -- Punjab National Bank, Union Bank of India, and Bank of India -- today, 27 July 2012, reported rise in the ratio of net non-performing assets (NPAs) at the time of announcement of first quarter results.
State-run power generation major NTPC gained after good Q1 result. Index heavyweight and cigarette maker ITC held firm after the company reported strong Q1 results during trading hours on Thursday, 26 July 2012. Another index heavyweight Reliance Industries (RIL) pared gains. Reliance Communications hit a record low.
Powered by Capital Market - Live News