Sense of optimism lifts Asian stocks
City Index September 21, 2011 2:58 PM
<p>Asian markets were mostly up in late afternoon trading. The MSCI Asia Pacific Index rose 0.5% at noon in Tokyo while China’s Shanghai Composite Index […]</p>
Asian markets were mostly up in late afternoon trading. The MSCI Asia Pacific Index rose 0.5% at noon in Tokyo while China’s Shanghai Composite Index jumped 2.2%.
There is a sense of optimism before the US Fed gives feedback through its minutes release tonight Asian time, following its two-day meeting.
In regional economic news, Japan’s exports increased less than expected as shipments of electronic parts fell, an indication that slowing growth abroad and a rising yen may weigh on the economy’s recovery.
The International Monetary Fund also cut its China growth estimates for this year and next and indicated that a stronger Yuan would help to contain inflation and rebalance the economy. Despite this admission, we don’t think China is likely to revalue its currency by a large amount anytime soon. The social cost would be too high as the growth rate moderates slightly from record highs.
In Australian corporate news, department store operator David Jones’ result was in line with the already downbeat trading updates delivered over the past few months. The business is dealing with a very challenging environment and while sales in the first quarter have not improved, expectations around profitability are unchanged. The result does have several hints of possible upside however. Management says it is working on a strategic plan for the business through 2013-2016 and will update the market in relation to the longer term outlook of its financial services business.
In commodities, global mining giant Rio Tinto’s warning on commodities could see some more downside in base metal prices over the next few weeks. There is an air of caution among mining companies, particularly single metal exposures without the diversity Rio Tinto and BHP enjoy in bulks. The copper price is now well below the US$4/lb level.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.