On Wednesday, Asian stocks have gained mainly because of the rebound in the financial shares. Despite the decline in share prices of raw material and industrial companies, this is definitely a positive movement for the Asian stocks.
Sharp Corp. shares surged 7.2% after the news report broadcasted by Kyodo News. It stated that Intel Corp. may invest around $500 million in the TV making company from Japan and this report definitely boosted the morale of the company. China Construction Bank Corp., the second largest lender of the country by assets, also experienced a rise of 3.2%. Recently, Financial News stated that China Construction Bank Corp. can continue keeping non-performing loans under control even though the economic growth may slow down. On the other hand, Iluka Resources Ltd. experienced losses of 6.4%. Goldman Sachs Group Inc. recently advised the company to sell some of its shares for lowering of mineral sand prices and that probably have resulted this loss. Incidentally, Iluka Resources Ltd. is the largest zircon producing company in the world.
In Tokyo, The MSCI Asia Pacific Index increased by 0.1%. Incidentally, tomorrow, MSCI Inc. will announce the rebalancing of its indexes which is done semi-annually. The Hang Seng China Enterprises Index of mainland shares, which is listed in Hong Kong, also was able to halt a four day 3.9% slide, before the leadership congress of China could conclude. The Hang Seng China Enterprises Index however increased by 1.7%. Volatility measurements in both Hong Kong and Japan fell though.
Chairperson of Chinese division of JPMorgan Chase & Co., Jing Ulrich stated that the economy has started to stabilize. She also stated that in the next few months, it is expected that the corporate earnings will be recovered. She commented that recovery in different sectors such as industrial production, power generation, retail sales etc. denote towards that market only. The surprisingly better performance of Chinese exports has also boosted the market.
After a record 7-day losing streak, Nikkei 225 Stock Average saw increase of 0.1%, however the volume is still 33% below the normal 30-day average. The Nikkei Volatility Index saw 2.7% drop and it is now the lowest since February, 2011. Kospi from South Africa and S&P/ASX 200 Index from Australia – both however added 0.2%.Incidentally, the customer confidence in Australia has reached a 19-month high, thanks to the boost that household optimism received after the Central Bank interest rate cut.
Shanghai Composite from China added 0.4%, whereas, the HSI Volatility Index dropped by 5%. This is the biggest drop for HSI Index since last September. According to Ding Shuang, the former employee at China’s Central Bank, any fresh stimulus should not be expected for the country after the transition in its leadership. As Shuang stated, the Growth Rate of the country is within reach and the employment situation is acceptable as well. Hence, the economic rebound may only happen during first half of the next year.
As it missed the second quarter estimated earnings, the biggest phone company in South-East Asia, Singapore Telecommunications Ltd. shares were down by 0.9%. Fairfax Media Ltd. on the other hand saw a rise of 4%, after the US based rural media business of the company was sold to Penton Media for $79.9 million.
Shionogi & Co., the Japan based company rose by 2.2% after it developed an experimental treatment for HIV, along with, Pfizer Inc. and GlaxoSmithKline Plc. The treatment has been seen to work against late-stage patients and a regulatory filing will most probably be done by end of 2012.
Among banks, The China Construction Bank saw its share prices increasing by 3.2%. After experiencing continuous declines for 5 straight days, National Australia Bank finally advanced 0.6%.