WSJ: Resource, Commodity Stocks Up
By SHRI NAVARATNAM And PHILIP VAHN
FEBRUARY 12, 2010, 12:34 A.M. ET
Asian shares markets were mostly up Friday, with stocks exposed to the resources and commodities sector helping Japan and China trade higher.
There was still come caution in markets as investors awaited specific measures from European leaders to prop up fiscally strapped Greece. The European leaders Thursday pledged support for Greece, but stopped short of providing any immediate financial assistance.
"Although E.U officials spurred on by France and Germany agreed that some form of support was needed the lack of detail came as a disappointment," said Credit Agricole Corporate and Investment Bank in a note to clients.
"Differences in opinion on how help should be provided meant that markets had nothing concrete to digest aside from a general agreement to provide assistance if needed."
Japan's Nikkei 225 was up 0.9% after resuming trade following a holiday Thursday, while Australia's S&P/ASX 200 was up 0.2% and South Korea's Kospi Composite was down 0.5%. Hong Kong's Hang Seng Index rose 0.4%, the Shanghai Composite was 0.5% higher and Singapore's Straits Times Index gained 0.3%. Dow Jones Industrial Average futures were 9 points lower in screen trade.
Indian markets are closed for a public holiday and Taiwan's bond and stock markets are shut ahead of the Lunar New Year.
The resources sector was underpinning the Australian market after metals prices rose Thursday. However, lingering concerns over Europe's fiscal woes and some position squaring ahead of the Lunar New Year appeared to limit early demand.
Rio Tinto rose 2.3% after the mining giant's full year profit for 2009 beating market expectations Thursday, with profit rising 33% to US$4.87 billion; fellow miner BHP Billiton also advanced 0.9%. Metal firms were also leading China's market higher with Shandong Gold-Mining up 1.6% and Yunnan Copper Co. tacking on 2.5%.
"It's the external factors lifting the metal stocks today while concerns have eased after Europe pledged to rescue Greece," said Xu Yinhui from Guotai Junan Securities.
Tokyo shares were boosted by stocks exposed to the commodities sector, such as trading houses. Mitsui & Co. rose 3.9% and Mitsubishi Corp was up 2.9%.
Beverage concern Kirin Holdings fell 3.4% after a weak fiscal year earnings report released Wednesday. Asahi Glass jumped 7.1% on expectations the glass maker may upgrade its earnings target for this fiscal year as analysts said the company's net profit forecast of Y90 billion looks conservative.
"The company's medium-term business plan released Wednesday spurs hopes for improvements in North American operations and growth in solar battery-related business," said SMBC Friend Research Center analyst Kazumasa Fukumoto.
Technology and automobile stocks were dragging the Korean market lower. "Demand for IT products is expected to fall during the Lunar New Year holidays, which is weighing on the stocks today," said Bae Sung-young at Hyundai Securities. Samsung Electronics fell 2.1% and Hynix Semiconductor gave up 2.3%. Hanwha Securities rose 3.1% on hopes the company may acquire foreign brokerage units. A person familiar with the matter told Dow Jones Newswires that Hanwha Securities is set to sign a contract later Friday to buy two South Korean units -- Prudential Investment & Securities, Prudential Asset Management -- of U.S.-based Prudential Financial Inc.
New Zealand shares were modestly higher, but gains were being capped by Telecom's 0.4% fall after the country's biggest phone company by subscribers reported fiscal second quarter earnings largely in line with expectations. First NZ Capital equities director James Lee said results were in line with expectations, but many uncertainties, such as its participation in national fast broadband plan, remain.
Data earlier Thursday showed New Zealand retail sales grew a below-expected 1.0% in the fourth quarter from the third. Given the fairly subdued consumption growth, some economists now expect the Reserve Bank of New Zealand to start raising rates in the second half of this year although a majority still expect the hike-cycle to begin in June.
Elsewhere, Philippine shares gained 1.4%, Malaysian shares were up 0.3%, Thai shares were uop 0.2% and the NZX-50 was up 0.5%.
Foreign exchange majors were trading in a tight range, with the euro trading slightly lower after falling sharply Thursday. Traders say the single currency will remain under pressure until there are some concrete measures from European leaders to pull Greece out of its fiscal troubles.
Against the dollar, the euro was buying $1.3668 compared with $1.3678 late in New York Thursday, and was at Y122.54 against the yen from Y122.79. The dollar was fetching Y89.63, from Y89.73.
Minoru Shioiri, chief manager of foreign exchange trading at Mitsubishi UFJ Securities, said the market is disappointed by the lack of immediate financial backing for Greece. "Market participants are also worried about the problems spreading out of Greece to Portugal, Spain and Italy, so that concern is weighing on the euro's top-side," he said.
Lead March Japanese government bond futures contract was lower on weaker U.S. Treasurys Thursday and the Nikkei's strength. The contract was down 0.11 at 139.32 points while the 10-year cash JGB yield was up 0.5 basis point at 1.330%.
Three-month London Metals Exchange copper futures contract was at $6,876 per ton, down $63.00 from the London afternoon kerb. Spot gold was at $1,089.20 per troy ounce, down $3.40 from the New York close. Nymex March crude oil futures were down 38 cents at $74.90 per barrel.
Write to Shri Navaratnam at shri.navaratnam@dowjones.com
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