Asian Stocks Rise After Alcoa Results, China Data

Most Asian markets rebounded Tuesday after a higher finish on Wall Street and better-than-expected results from Alcoa Inc. Mainland Chinese shares rose after a choppy session as investors digested data showing an increase in consumer prices.

Japan’s Nikkei Stock Average JP:NIK +2.58%  jumped 2.6% for its highest finish in six weeks, Australia’s S&P/ASX 200 AU:XJO +1.50% gained 1.5% and South Korea’s KospiKR:SEU +0.74% added 0.7% to catch up with extended gains on Wall Street, where stocks clinched a third straight day of gains Monday.

The Shanghai Composite IndexCN:SHCOMP +0.37%  inched up 0.4% after changing direction a few times, while Hong Kong’s Hang Seng Index HK:HSI +0.41%gained 0.3% in afternoon trade.

“The good vibes from the commencement of Wall Street’s second-quarter reporting season has continued to spread cheer,” said Betty Lam, a sales trader at CMC Markets.

Alcoa AA +1.41%  began the U.S. reporting season at the end of the regular Wall Street trading session, with the aluminum major’s adjusted second-quarter earnings topping estimates.

However, “not all Asian markets are feeling the love, with Chinese equities bouncing between green and red today, fueled by mixed pricing and inflation data,” Lam said.

Official data released Tuesday showed June consumer prices in China rose 2.7% from the year-earlier month, while producer prices continued to deflate for the 16th straight month, dropping 2.7%.

The data had “little implication for policy, given a pop in food prices was the sole driver” of the surprise increase in consumer prices, said Annette Beacher, TD Securities’ head of currencies and interest-rates research in the Asia Pacific.

“The People’s Bank of China has little incentive to alter current monetary policy settings, given buoyant house prices and gross domestic product likely to expand this year close to the target rate of 7.5%,” Beacher said.

U.S. equity index futures advanced after the inflation figures, while the Australian dollar AUDUSD +0.66% — which is sensitive to Chinese economic data — charted a choppy path, also reacting to data showing business conditions hit a four-year low.

In Hong Kong trade, shares of China Mobile Ltd. HK:941 +0.69% CHL -0.06%  rose 0.4%, and China Resources Land Ltd. HK:1109 +0.98% CRBJF -5.19%  gained 1.2% to recover some recent losses, while Industrial & Commercial Bank of China Ltd. HK:1398 -0.21%IDCBY -0.16%  slipped 0.2%.

Property developers declined in Shanghai, meanwhile, with Gemdale Corp.CN:600383 -4.37%  losing 4.4%, and Poly Real Estate Group Co. CN:600048 -2.79%  falling 2.8%.

Gains were spread across several sectors in Tokyo. Shares of Sumitomo Realty & Development Co. JP:8830 +4.74% SURDF +3.24% climbed 4.7%, utility Tokyo Electric Power Co. JP:9501 +6.37% TKECY +0.64% rose 6.4%, apparel retailer Fast Retailing Co.JP:9983 +4.48% FRCOY +0.58%  added 4.5% and telecommunications firm KDDI Corp.JP:9433 +4.10%   KDDIY -1.03% gained 4.1%.

Dai-ichi Life Insurance Co. JP:8750 +2.04%  DCNSF +3.58% advanced 2% and Tokio Marine Holdings Inc. JP:8766 +2.23%TKOMY -1.18% rose 2.2% after the Nikkei newspaper reported Japanese insurers were likely to be excluded from new global capital requirements set to take effect in 2016.

Hino Motors Ltd. JP:7205 +4.12%HINOY +3.31% jumped 4.1% after a separate Nikkei report said it was expected to double its group operating profit in the quarter ended June 30.

Meanwhile, Alumina Ltd. AU:AWC +3.00% AWC -1.62%  climbed 3% in Sydney after Alcoa’s results.

Also supporting the Australian advance, Commonwealth Bank of Australia AU:CBA +1.67%  CBAUF -4.14%  rose 1.7%, and BHP Billiton Ltd. AU:BHP +2.13% BHP +0.16%  advanced 2.1%.

 

Source: Market Watch