Fed turns upside pilot for Asian Stocks

Courtesy : UTVI.com

Asian markets displayed a firm undertone today as hopes of the US Fed extending its ultra low interest rate policy for a longer period of time supported the sentiments. Banking and manufacturing stocks hogged the limelight on growing expectations that the Fed will leave the interest rates at their lowest level, in an attempt to give more to support the U.S. economy, as noted in the minutes of the last US Fed meeting.

The Australian market ended in positive territory amid strong global advances. The benchmark S&P/ASX200 Index added 7.20 points, or 0.15% to close at 4,961, while the All-Ordinaries Index ended at 4,983, representing a gain of 9.10 points, or 0.18%.

On the economic front, a report released by the Department of Education, Employment and Workplace Relations, or DEEWR, revealed that Australia's leading indicator of employment dropped for the third month in a row in April. According to the report, the index fell to minus 1.099 from minus 1.076 in the previous month.

A report released by the Australian Federal Chamber of Automotive Industries revealed that sales of new cars in the country increased 25.2% year-on-year in March. This marks a record monthly sales figure for March, eclipsing the previous record set in 2007. As per the report, a total of 94,744 passenger car sales were pushed through during the month.

New Zealand shares gained for their fourth straight day as offshore investors returned to the local market at the start of the quarter, in a day where the headlines were dominated by Fonterra Cooperative Group. The NZX 50 Index rose 16.17, or 0.5%, to 3325.08.

The Japanese stock ended in green after yesterday's losses though profit taking at higher levels trimmed the gains. The Bank of Japan announced to keep interest rates unchanged, lifting the sentiment amid an overall tone of optimism that the global economic recovery will be sustained. Nikkei 225 rose today by 0.09% or 10.51 points closing at 11292.83. The broader Topix index of all First Section issues was up 4.75 points, or 0.48%, to 996.

The Bank of Japan, at the end of its two-day policy meeting, revealed that it will maintain its un-collateralized overnight call rate unchanged at 0.10%. The central bank, while withholding announcement on further support measures to tackle deflation, pledged to maintain an extremely accommodated financial environment. The bank retained its assessment of the domestic economy, saying growth is picking up mainly due to various policy measures taken at home and abroad, although there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand.

Hong Kong stocks also surged, hitting a two-month high on upbeat banking stocks.In Hong Kong, the benchmark Hang Seng Index ended the morning up 1.46 percent at a 2-� month high of 21,851.06.

The Chinese stocks were up after an early setback. The Shanghai Composite Index slipped initially, extending the yesterday's losses but firmed up later on as banks and resources witnessed good buying. The index closed slightly up on the day at to 3,158.68.

International pressure is building to let the Chinese currency, the yuan or remnimbi, appreciate against the dollar. China will get to know that more yuan flexibility would benefit it, U.S. Treasury Secretary Timothy Geithner said yesterday.

In Mumbai, the key benchmark indices registered small gains in what was a highly volatile trading session. Weak European markets and lower US index futures triggered profit taking after Indian stocks scaled their highest level in more than 25 months in early afternoon trade. The barometer index BSE Sensex fell below the psychological 18,000 level after racing above that level in early afternoon trade. The Sensex was provisionally up 24.76 points or 0.14%, up 87.82 points from the day's low and off 81.73 points from the day's high.

In commodities, crude fell today as the US dollar hit its highest level in nearly two weeks against the Euro- topping out at 1.3346. Crude oil futures slipped near $86 per barrel in Asia today, showing signs of easing as some profit selling emerged ahead of the weekly inventories data from the US department of Energy. The commodity raced up yesterday, rallying above $87 per barrel in tune with falling dollar and steady equities. The counter was last seen quoting at $86.38, down 46 cents on the day for front month futures in GLOBEX.