Asia Stocks Mostly Up; Earnings Aid Sydney
Most Asian stock markets made strong gains Wednesday, as the Australian market reached a closing level not seen for almost four-and-a-half years, though Japanese shares took a hit.
Australia’s S&P/ASX 200 index rose 0.9% to end the day at 5,003.70 — its best close since Sept. 22, 2008. That date marked a week after the collapse of Lehman Brothers heralded the onset of the global financial crisis.
Japan’s Nikkei Stock Average , which last week reached its highest close since September 2008, finished with a loss of 1% at 11,251.41 Wednesday. South Korea’s Kospi climbed 1.5% to cut year-to-date losses to 1.2%.
Hong Kong, Taiwanese and mainland Chinese markets were closed for the Lunar New Year holiday.
While trading in Asia weren’t at full strength due to the holiday, share markets were grinding higher globally as “positive earnings results enable the bulls to enjoy a little more sunshine,” according to Perpetual Investments investment market research chief Matthew Sherwood.
Aiding sentiment in Asia, the Dow Jones Industrial Average ended Tuesday trading at a level not seen in more than five years.
Earnings Down Under
Corporate earnings helped the Australian market to gain on Wednesday, as shares of banking giant Commonwealth Bank of Australia rose to a record 67.38 Australian dollars ($69.41) early in the session, before settling back to A$67.11 for a 2.4% advance.
The gains came after the bank reported a 6% increase in adjusted profit — with the figure exceeding analysts’ expectations — and raised its interim dividend.
Other Australian companies updating investors on earnings included engineering firm Leighton Holdings Ltd , which surged 11.2% after reporting a return to profit in 2012.
“The pendulum is swinging to earnings,” Sherwood said, speaking about the Australian market. “Earnings growth has to come through, or the market is going to top out.”
During the Asian session, U.S. President Barack Obama made his highly anticipated State of the Union address, during which he said the U.S. would start talks on a potential free-trade deal with the European Union.
Sherwood said that such a deal marked a “long-awaited” effort to enhance trade links between the two largest economic regions in the world.
“Moves by politicians to increase the level of overall trade is a win-win situation” in general, he said, adding that the deal may work to benefit to the global economy.
Tokyo heads lower
Meanwhile, earnings reports also moved some shares in Japan, with Pioneer Corp. falling 10.7% after saying it plans to cut jobs and now expects to post a full-fiscal-year loss.
Shares of Olympus Corp. dropped 2.7% after the technology firm posted a narrower quarterly loss, but trimmed its own full-year forecast due to weak camera sales.
Electric utility Tokyo Electric Power Co. fell 8.5% after announcing late Tuesday that it will open up bidding to build fossil-fired power plants. Rival Kansai Electric Power Co. dropped 4.2%.
Uncertainty over currency moves worked to depress share prices for some forex-sensitive firms in Japan after the yen moved higher overnight.
An official from the Group of 20 major economies signaled fellow members of the bloc weren’t endorsing Tokyo’s weak-yen policies, as previously believed.
Sony Corp. lost 5.6%, Panasonic Corp. fell 3.4%, Mitsubishi Motors Corp. declined 1.8% and Mazda Motor Corp. dropped 2.8%.
At the same time, South Korean exporters — which can benefit if Japanese rivals lose competitiveness from a rising yen — booked some gains. Read: Yen’s boon to Japan needn’t be South Korea’s bane
Kia Motors Corp. rose 4.1%, and affiliate Hyundai Motor Co. advanced 2.1% in the auto sector.
Technology heavyweight and Apple Inc. competitor Samsung Electronics Co. rose 1%, while chip maker SK Hynix Inc. improved by 1.8%.
Marketwatch
