Asian Markets Rise On Earnings Optimism

Asian stock markets are higher on Thursday following the mostly positive cues from Wall Street overnight amid upbeat corporate earnings results and as U.S. Federal Reserve Chairman Jerome Powell reinforced his view of a strong outlook for the U.S. economy on his second day of testimony. Crude oil prices edged higher in Asian trades after rising overnight.

The Australian market is higher following the mostly positive cues from Wall Street and as Australia’s unemployment rate for June came in line with expectations. However, gains are modest as investors digested production results from major oil companies.

In late-morning trades, the benchmark S&P/ASX 200 Index is adding 13.60 points or 0.22 percent to 6,258.70. The broader All Ordinaries Index is up 17.90 points or 0.28 percent to 6,347.00.

The major miners are gaining. BHP Billiton is adding 0.3 percent, Fortescue Metals is higher by 1 percent and Rio Tinto is advancing more than 1 percent.

South32 reported a 24 percent fall in fourth-quarter coking coal production. However, the miner’s shares are rising almost 1 percent.

The big four banks are mixed. ANZ Banking is adding 0.2 percent and National Australia Bank is up 0.1 percent, while Commonwealth Bank is down 0.1 percent and Westpac is declining 0.2 percent.

Among oil stocks, Oil Search is losing 0.5 percent even as crude oil prices rebounded overnight. Woodside Petroleum reported a 20 percent increase in revenue for the second quarter, helped by the ramp up of the Wheatstone LNG project and higher oil prices. However, the company’s shares are down 0.5 percent.

Santos recorded a 3 percent decline in second-quarter production and said it has cut net debt by 4 percent since the start of the quarter. In addition, the company’s board said it will consider a dividend declaration in August. Santos’ shares are rising almost 1 percent.

Gold miners are weak as gold prices stayed at one-year lows. Evolution Mining is losing more than 1 percent and Newcrest Mining is down almost 1 percent.

In economic news, the Australian Bureau of Statistics said that the jobless rate in Australia came in at a seasonally adjusted 5.4 percent in June. That was in line with expectations and unchanged from the previous month.

The Australian economy added 50,900 jobs last month to 12,573,600 – shattering expectations for an increase of 16,500 following the addition of 12,000 in May.

In the currency market, the Australian dollar is higher against the U.S. dollar on Thursday. The local currency was quoted at US$0.7398, up from US$0.7350 on Wednesday.

The Japanese market is advancing following the modest gains overnight on Wall Street and higher crude oil prices. Investors also cheered data that showed Japan’s trade balance returned to a surplus in June. Tech and oil stocks are among the leading gainers.

The benchmark Nikkei 225 Index is adding 109.89 points or 0.48 percent to 22,904.08, off a high of 22,913.48. Japanese shares closed at their highest level in more than a month on Wednesday.

The major exporters are mixed on a stronger yen. Mitsubishi Electric is rising almost 3 percent and Sony is adding 0.3 percent, while Panasonic is declining 0.3 percent and Canon is edging down less than 0.1 percent.

In the auto sector, Honda is edging up less than 0.1 percent and Toyota is adding 0.2 percent. In the banking space, Mitsubishi UFJ Financial is advancing more than 1 percent and Sumitomo Mitsui Financial is adding 1 percent.

Among oil stocks, Inpex is gaining almost 4 percent and Japan Petroleum is edging up 0.1 percent after crude oil prices rose 1 percent overnight.

Among the market’s best performers, Screen Holdings is gaining almost 5 percent, while Showa Shell Sekiyu and Advantest are rising almost 4 percent each.

On the flip side, Tokyo Gas and Nippon Paper Industries are losing almost 3 percent each.

In economic news, the Ministry of Finance said that Japan posted a merchandise trade surplus of 721.408 billion yen in June, up 66.5 percent on year. That exceeded expectations for a surplus of 531.2 billion yen following the 578.3 billion yen deficit in May.

Exports advanced an annual 6.7 percent to 7.052 trillion yen – shy of forecasts for 7.0 percent and down from 8.1 percent in the previous month. Imports were up just 2.5 percent on year to 6.330 trillion yen versus expectations for a gain of 5.3 percent and down sharply from 14.0 percent a month earlier.

In the currency market, the U.S. dollar is trading in the upper 112 yen-range on Thursday.

Elsewhere in Asia, South Korea, Shanghai, Singapore, Indonesia, Malaysia, Hong Kong and Taiwan are also higher, while New Zealand is modestly lower.

On Wall Street, stocks closed modestly higher on Wednesday partly due to a positive reaction to earnings news from companies such as United Continental and Morgan Stanley. Late in the trading day, the Federal Reserve released its Beige Book, which said economic activity continued to expand across the U.S.

The Dow rose 79.40 points or 0.3 percent to 25,199.29 and the S&P 500 ticked up 6.07 points or 0.2 percent to 2,815.62, while the Nasdaq edged down 0.67 points or less than a tenth of a percent to 7,854.44.

The major European markets also moved to the upside on Wednesday. While the German DAX Index advanced by 0.8 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index climbed by 0.7 percent and 0.5 percent, respectively.

Crude oil futures rebounded to settle modestly higher on Wednesday, extending gains to a second successive session. WTI oil for August delivery ended up $0.68 or 1 percent at $68.76 a barrel on the New York Mercantile Exchange.

by RTTNews Staff Writer

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