Asian Markets, Fundamentals

Asian Stocks Advance, ASX Falters as Employment Report Disappoints

Asia Session Key Developments

• Australian Employers Add Fewest Jobs in Six Months
• Japan’s GDP Expands Less Than First Estimated
• Lending in China Tops Forecast

Stocks in Asia tipped higher on Thursday as market participant held an improved outlook for global growth, while the ASX 200 bucked the trend as employment in the $1T economy rose the least in six months. Meanwhile, the economic docket in Japan showed that the economy expanded less than previously forecasted in the fourth quarter as companies scaled back on spending, while Australia’s labor market added 0.4K jobs in February, which fell short of expectations for a 15.0K rise. At the same time, consumer prices in China increased to an annual pace of 2.7% in February, with producer prices jumping to 10.3% to top forecasts for a n 8.5% rise, while retail spending surged 22.1% from the previous year. Moreover, industrial outputs increased 12.8%, with fixed investments advancing 26.6%, while new Yuan loans jumped 700.1B from January.

Nikkei 225                          10,664.95

Stocks in Japan pared yesterday’s decline, leading the Nikkei 225 to rally 101.03 points (0.96%) on Thursday and close at 10,664.95. Nine out of the ten components pushed higher on the day, with financials leading the way, climbing 1.70%, while oil & gas slid 0.55% to taper the advance. Shares of Mitsui & Co. added 2.73% subsequent to the Nikkei newspaper stating that Vale SA is aiming to increase prices of iron ore by 90%, while Okuma leapt 5.83% after Japan Machine Tool Builders’ Association announced orders amounted to 64.8 billion yen in February. At the same time, Shinsei Bank sank 3.85% as the lender may abandon its merger with Aozora Bank and instead sell shares to raise 75 billion yen, while Sumitomo Heavy soared 4.80% amid MF Global placing a “buy” rating on the stock.

Hang Seng                        21,228.20

The Hong Kong equity market advanced on Thursday for the fifth successive session, leading the benchmark equity index to climb 19.91 points (0.96%) and close at 21,228.20. Five out of the nine components rallied on the day, with consumer goods climbing 3.07%, while basic materials lost 0.63%. Shares of Cathay Pacific Airways added 1.84% as Redford Assets rated the company a new “buy,” while China Mobile tipped 1.62% higher as China’s banking regulator remained “supportive” of the firm’s acquisition of a 20% stake in Shanghai Pudong Development Bank.  Moreover, New World Development dropped 1.05% as the company sold new apartments at The Masterpiece project it co-developed with the government to VIP clients before making them available to the public, while Aluminum Corp of China slid 0.86% on the back of lower metal prices.

S&P/ASX 200 Index           4,814.20

Shares in Australia extended yesterday’s decline, leading the S&P/ASX 200 to retreat 5.80 points (0.12%) and close at 4,814.20. Seven out of the ten components declined on the day, with technology leading the way, losing 1.93%, and was followed by a 0.62% decline in industrials. Shares of BHP Billiton slipped 0.53%on the back of lower energy prices, while Lihir Gold, Australia’s second largest gold producer sank 2.68% as the company, along with Equigold agreed to a $1.1 billion merger. At the same time, Fortescue Metals soared 2.07% as ING Groep NV expects annual contract prices for Australian iron ore to rise 80%, while Leighton Holdings added 1.67% after its Asia unit won a A$463 million contract to build a section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link.

Notable Asian Session Event Risk / Economic Releases