Asian Markets, Fundamentals

Stocks in Asia/Pacific Surge as Reserve Bank of Australia Raises Outlook for Global Growth

Asia Session Key Developments

• Gold Hits new Record High
• Japanese Trade Figures Top Economists Expectations
• Australia’s Central Bank Says Economy Entered a “New Upswing”
• Japan’s Fujii says the Scale of Second Extra Budget Has Yet To Be Decided

The Asian equities market soared on Wednesday subsequent to the Australian central bank stating that the country’s economy had entered a “new upswing, while commodities traded higher during the trading session, with gold prices rising to a new record high of 1,178.18. Reserve Bank of Australia Deputy Governor Ric Battellino held an improved outlook for the $1T economy and said that the Asian economists are recovery rapidly, and expects mining investors to increase substantially going forward. Meanwhile, Japan’s trade balance widened to JPY 801.7B in October from a revised reading of JPY 525.3B in the previous month as exports slipped at an annual rate of 23.2% to market the slowest rate of decline in a year, while imports tumbled 35.6% to exceed expectations for a 34.0% drop. Moreover, Japan’s Finance Minister Hirohisa Fujii announced that the government will stick to its plan to compile next year’s budget by the end of this year, while also stating that the scale of the second extra budget has not been decided yet.

Nikkei 225                          9,441.64

The Japanese equity markets pushed higher on Wednesday as the trade report reinforced an improved outlook for the region, leading the Nikkei 225 to advance 40.06 points (0.43%) and close at 9,441.64, ending a five-day losing streak. Utilities added 1.75% to lead the advance, followed by a 1.09% gain in consumer goods, while financials plunging 1.30% to taper the rise. Shares of Kawasaki Heavy Industry rallied 3.96% as Citigroup Global Markets Japan raised its rating on the firm to “buy” from “hold,” while Japan Airlines, Asia’s biggest carrier by sales jumped 3.45% as it secured a loan agreement with the state-owned Development Bank of Japan. At the same time, Nippon Yusen shed 4.84% to extend yesterday’s decline as the Baltic Dry Index, which gauges the cost of shipping commodities, slid 1.9%, while Denso Corp added 2.73% as KBC Securities increased its rating on the firm to “buy” from “hold.”

Hang Seng                        22,611.80

Hong Kong shares closed to the upside on Wednesday, leading the benchmark equity index to leapt 188.66 points (0.84%) and end the trade at 22,611.80 as 8 of the 9 components traded higher on the day. Shares of Bank of China, the nation’s third-largest lender by market value, tumbled 3.03% subsequent to the bank stating that it is studying “various options” to replenish capital, while PetroChina added 2.24% as China is increasing gas output to ease a supply shortfall caused by a cold snap this month. Meanwhile, China Life Insurance soared 4.49% on speculation its oversea unit, which operates outside of mainland China, will present an initial public offering in two years, while China Unicom advanced 2.08% as the National Development and Reform Commission announced it will ease price controls in an effort to increase the competitiveness of fixed-line operators.

S&P/ASX 200           4,722.20

Stocks in Australia advanced on Wednesday amid the central bank stating the $1T economy entered a “new upswing,” leading the S&P/ASX 200 to climb 37.20 points (0.79%) and close at 4,722.20, with 9 of the 10 components gaining on the day. Shares of Suncorp-Metway Ltd rose 2.51% as the company abandoned the sale of its banking arm, while Cochlear, the global supplier of the best-selling hearing implant, pushed 4.75% higher subsequent to JPMorgan Chase & Co. raising its target price on the company from A$56.90 to A$58.04. Meanwhile, the top seller of home siding in the U.S., James Hardie Industries, added 2.57% after the U.S. S&P/Case-Shiller home-price index recorded its fourth monthly gain, while Riversdale Mining surged 11.89% as Brazil’s Cia. Siderurgica Nacional SA plans to take a 16.3% stake in the firm.

Notable Asian Session Event Risk / Economic Releases