Asian Markets, Fundamentals

Asian Stock Markets Rally as Global Growth Prospects Improve

Asia Session Key Developments

• Australian Foreign Reserves Narrows in February
• Construction in Australia Grows at Slower Pace
• Japan Reserve Assets Tip Lower for Second Month

Stocks in Asia/Pacific ended the week on a higher note subsequent to the drop in U.S. jobless claims, while the Japanese yen weakened amid speculation that the Bank of Japan will expand easing measures in order to support the domestic economy. Meanwhile, the economic docket overnight showed official reserve assets in the world’s second largest economy narrowed for the second time in the past seven months, with the figure slipping to $1051.1B in February from $1053.1B in the previous month. Meanwhile, construction in Australia grew at a slower pace in February as the AiG’s Performance of Construction Index pulled back to 52.8 from 57.7 in the previous month, while the nation’s foreign reserves weakened to A$44.3B during the same period from A$46.6B in January.

Nikkei 225                          10,368.96

Stocks in Japan pared yesterday’s decline, leading the Nikkei 225 to rally 223.24 points (2.20%) on Friday and close at 10,368.96. Eight out of the ten components pushed higher on the day, with consumer services rising 2.96%, which was followed by 2.58% advancement in technology. Shares of Mitsui Chemicals soared 4.92% as the company announced it will take additional measures to cut costs, while JFE Holdings added 2.99% as the Nikkei English News said the company plans to purchase a 24% state in China’s Pancheng Yihong Pipe Co. for approximately 1 billion yen. In addition, Kawasaki Kisen Kaisha climbed 4.89% as Mitsubishi UFJ Financial Group lifted the company’s stock rating from “market perform” to “outer perform,” while Sony added 3.39% following a Wall Street Journal report that said the firm will release new hand-held products which will compete against Apple.

Hang Seng                        20,787.96

The Hong Kong equity market pared yesterday’s decline, leading the benchmark equity index to gain 212.19 points (1.03%) and close at 20,787.97as all nine components advanced on the day. Shares of Cosco Pacific surged 3.64% as the shipping company expects annual profit on trade and rates, while Li & Fung, the biggest supplier of toys and clothing to Wal-Mart, added 2.21% amid the drop in U.S. jobless claims. Moreover, PetroChina gained 1.82% as crude pushed higher on Friday due to speculation that a recovery would boost demand for oil, while Aluminum Corporation of China advanced 2.08% on the back of higher metal prices.

S&P/ASX 200 Index           4,767.20

Shares in Australia rallied for the sixth successive session on Friday, leading the S&P/ASX 200 to increase 16.70 points (0.35%) and close at 4,767.20. Nine out of the ten components pushed higher on the day, with technology rising 1.72%, while telecommunications shed 0.36% to taper the advance. Shares of Australian Worldwide Exploration leapt 4.71% amid the company publicizing that it will begin drilling off New Zealand’s coast, which could potentially contain 250 million barrels of oil, while Tower Australia added 1.59% after the Australian Prudential Regulation Authority and Foreign Investment Review Board approved Dai-ichi Mutual Life Insurance’s bid to increase their stake in the insurance firm. At the same time, AWB slumped 2.27% as Commonwealth Bank of Australia expects a drop in grain harvest, while OZ Minerals added 2.27% on the back of higher metal prices.

Notable Asian Session Event Risk / Economic Releases