Asian Markets, Fundamentals

Asian Stocks Continue Higher on Improved Earnings and Profit Forecasts

Asia Session Key Developments

• MSCI Asia Pacific Index at Highest Level Since September 25
• Earnings Forecasts Carry the Markets Higher

Asian Stocks Rebound Following the Fed Rate Decision, Higher Commodity Prices

Stocks in Asia/Pacific were slightly higher again today, as the markets reacted to improved earnings and profit forecasts. The negative U.S. data released yesterday had a muted effect, as the market crept higher on RBA’s Stevens testimony as well as Japan’s Tertiary Industry Index that was released earlier. The MSCI Asia Pacific Index is now at its highest since September 25. Futures are trading significantly higher after the markets closed, indicating that Asian equities may be able to carry over this momentum into next week.

NKY 225                                           10,597.33

The Nikkei moved higher again today, adding 80.14 points (0.76%) to 10,597.33 by the end of the session. Advantest Corp. rose 4.47%, as the company continues to show strength after Monday’s data showed that exports surprisingly increased for June. Trend Micro Inc. gained 3.24% after Nomura upgraded the company’s rating to “buy” from “neutral”. TDK Corp. also moved 3.04% higher as industrials experienced a strong day. The Bank of Japan Monetary Policy Meeting Minutes released today indicated that emergency credit programs may be extended into 2010. The Tertiary Industry Index was also released today, with government stimulus spurring demand for services.

HSI                                                         20,893.33

The Hang Seng shrugged off earlier session losses to edge up 32.03 points (0.15%). China Petroleum gained 1.95% on the day as the company continues to receive support from commodities. Li & Fung rallied again today after it announced it may use up to $1 billion on acquisitions to boost growth. Esprit Holdings jumped 8.06% after it released positive earnings. Hong Kong released GDP numbers today, with growth expanding 3.3% from the first quarter, versus expectations for a rise of 1.2%.

ASX 200                                            4,461.00

The ASX 200 was slightly higher today, as momentum carried the index up 25.10 points (0.57%) to close at 4,461. Consolidated Media Holdings rose 2.8% on reports that Seven Network Ltd. is considering a takeover bid for the company. James Hardie Industries gained 3.6% after the company was upgraded by Credit Suisse. RBA’s Stevens discussed the future of the Australian economy today in a testimony to Parliament. He emphasized that interest rates need to be raised from “emergency” levels as the economy rebounds.

Notable Asian Session Event Risk / Economic Releases