Thursday, June 30, 2011

ASIAN MARKET REPORT

Market Summary

      Stock Market

·        Asian stocks soared, with the regional benchmark index moving toward its highest close in a month, as worries about a banking crisis tempered after Greece successfully passed austerity measures and German financial institutions prepared toward an agreement to roll over Greek debt holdings.

·        Japanese stocks edged up for a third day after Greece passed austerity measures needed to assure aid from the European Union, and as utilities rose on expectations they will be permitted to restart nuclear plants.

·       Australia’s S&P/ASX 200 Index rose 1.7 percent. Hong Kong’s Hang Seng Index climbed 1.5 percent, while China’s Shanghai Composite Index closed up 1.2 percent. South Korea’s Kospi Index up 0.3 percent. Japan’s Nikkei 225 (NKY) Stock Average added 0.2 percent, after swinging between gains and losses at least six times.

·        India’s benchmark stock index jumped to the highest level in almost two months, erasing a quarterly decline, as concerns of a Greek debt default subdued and overseas investors went long local shares.

Forex Market

·     The euro advanced to an almost three- week high against U.S. dollar on prospects the European Central Bank will raise interest rates next week to stave off inflation as the risk of a prompt Greek default reduced.

·     New Zealand’s dollar skyrocketed to a record as reports revealed business confidence and home-building approvals hiked.

·     New Zealand’s economy is being supported by high prices for its milk, meat and lumber exports, which are bolstering demand for the nation’s currency, central bank Governor Alan Bollard said.

·     The Australian dollar advanced to a three-week high versus the greenback before a central bank report that economists said will show bank lending expanded last month. Australia’s currency also jumped as optimism Greece will avert a default supported higher-yielding assets.

      Commodity Market

·  Oil climbed for a third day, reducing its first quarterly loss in a year, as traders bet U.S. demand may be increasing and Greece geared up for a second vote on austerity measures intended to avoid a debt default.

·  Gold may rise for a third day, trading toward an 11th quarterly increase, as concerns about European debt crisis eased after Greece passed austerity measures required to prevent the euro area’s first default.

·  Copper rose to a two-month high, prepared for its first monthly gain in four, after Greece passed austerity measures needed to assure financial aid, taming concern of a default that may destabilize the banking system.

·  Sugar Australia, a unit of Wilmar International Ltd.-owned Sucrogen, imported sugar for a second time in three years to meet domestic demand after a cyclone in February and wet conditions in growing regions cut supply in the world’s third-biggest shipper.

Bond and Yields

·         Treasuries rose, curbing a three-day decline, on speculation the debt crisis in Europe will contagious even as Greece takes measures to ward off a default.

·         U.S. government debt moved toward a quarterly gain on concern countries such as Ireland and Portugal will strive to draw investors, boosting demand for the safest securities. Bonds climbed even after Standard & Poor’s said it will cut the U.S. credit rating to its lowest level if the government flunks to increase the debt limit, leading to a default. The Federal Reserve’s second round of quantitative easing, also known as QE2, concludes today.

·         German two-year notes erased an earlier gain, with the yield rising one basis point to 1.57 percent as of 8:37 a.m. in London. Earlier, yields dropped two basis points to 1.54 percent.

·         Japan’s bonds fell for a second day after Asian stocks extended a global rally in equities, lowering demand for the relative safety of government debt.

·         Yields on benchmark 10-year bonds advanced to a two-week high as the Greek parliament’s passage of an austerity package reduced the risk the nation will default. Treasuries slumped in New York yesterday, with 10-year yields surging 25 basis points this week.

View full report here >>