Asia Gains on Earnings, Higher US Close

Asian markets advanced on Thursday, after the positive close on Wall Street and on back of the upbeat economic assessment by the U.S. Fed officials overnight.

Asian shares also traded higher as investors took President Barack Obama’s State of the Union speech as toning down some of the rhetoric that unnerved investors last week when he unveiled new restrictions on U.S. banks.
Japan’s Nikkei Average [JP;N225  10456.2  204.1201  (+1.99%)   ] jumped 2 percent, with upbeat reports about Honda Motor [HMC  34.37  -0.14  (-0.41%)   ] and Sony [SNE  33.24  -0.26  (-0.78%)   ] profits adding to momentum from strong earnings from other big name stocks like Canon.

But Toyota Motor slid on concerns about its suspension of U.S. sales of key car models, while Hitachi Construction tumbled 10 percent after forecasting a drop in annual profit.

The benchmark Nikkei gained 200 points to 10,451.9, after falling 0.7 percent the previous day to its lowest close in five weeks. The broader Topix added 1.3 percent to 919.7.

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Honda Motor advanced nearly 6 percent to 3,210 yen after a newspaper reported the automaker’s operating profit for the October-December quarter was roughly twice that of the previous quarter.

Sony gained 5.1 percent to 3,090 yen after the Nikkei newspaper said the electronics giant’s operating profit for the October-December quarter was boosted by a recovery in its video
game and LCD TV operations.

Canon advanced 1.9 percent to 3,685 yen. The world’s largest digital camera maker ahead of Sony said it expected its operating profit to jump 52 percent to 330 billion yen ($3.7 billion) in
2010.

Nippon Electric Glass surged 7.7 percent to 1,304 yen after the maker of LCD glass gave a full-year profit forecast above market consensus, helped by solid demand and cost-cutting efforts.

Rakuten shot up 6.1 percent to 73,000 yen after the online mall operator said it has agreed to set up a joint venture with China’s top search engine Baidu to launch a virtual shopping mall targeting the world’s largest online population.

But Toyota fell 2.8 percent to 3,600 yen.

Hitachi Construction tumbled to 1,980 yen after the company forecast annual operating profit to fall 51  percent from the previous year, though this was roughly in line with analysts’
forecasts.

Seoul shares climbed after briefly trading in negative territory on reports of North Korea firing more artillery, with gains in Hyundai Motor ahead of its quarterly results helping the market.

Sentiment was briefly pressured by reports that North Korea fired several artillery rounds on Thursday in the direction of a South Korean island off the peninsula, marking the second day of shooting near a disputed sea border.

The Korea Composite Stock Price Index (KOSPI) was up 0.72 percent to 1,637.17 points, with the index set to snap a four-session losing streak after hitting an earlier low of 1,619.26 points.

South Korea’s top automaker, Hyundai, gained 3.67 percent ahead of its quarterly results.

KB Financial advanced 2.52 percent after news it had decided to pull out of bidding for Prudential Financial‘s two South Korean units, leaving Macquarie Group and a South Korean brokerage as the major contenders.

Shinsegae and Hyundai Department Store dipped 0.94 percent and 1.91 percent respectively after a media reports late on Wednesday that South Korea’s No.1 retailer by market value and the department store operator submitted letters of intent (LOI) for the acquisition of GS Retail’s mart and department store units.

A Shinsegae spokesman said the company submitted a LOI to GS Retail, but declined to specify whether it was for one or both units. Hyundai Department Store spokesman said the company turned in LOI for only department store business.

SK Communications, operator of social networking site Cyworld, rallied 7.12 percent after the firm said early on Thursday its net earnings swung to 17 billion won in the fourth quarter from a net loss of 11 billion won ($9.49 million) a year ago.

Australian shares rose 0.4 percent, recovering from a four-day fall, as an upbeat economic assessment from the Federal Reserve offset weaker commodity prices.

The benchmark S&P/ASX 200 index [AU;XJO  4673.9  29.2998  (+0.63%)   ] rose 14.5 points to 4,659.6 points. The index fell 4.6 percent over the past four sessions to Wednesday’s close, weighed down by concerns over global growth and demand for commodities as China looks to slow down its overheating economy.

Newcrest Mining, Australia’s top gold  producer, rose 1.2 percent to A$32.70 after reporting a 17 percent increase in its December quarter gold production and maintained its forecast for full year production.

Shares in Woodside Petroleum rose 1.3 percent to A$43.58 after Australia’s Deputy Prime Minister Julia Gillard said a strike by its workers was illegal and must cease.

The Hong Kong market staged a rebound as investors picked up battered financial issues after shares hit more than four-month closing lows in the previous session.

The benchmark Hang Seng Index advanced 1.8 percent at 20,417.6 points.

Industrial and Commercial Bank of China climbed 4.09 percent to HK$5.85 before slipping to HK$5.83, still up 3.7 percent. China’s largest bank said it had stopped rolling over some loans to slow credit growth after a surge at the start of the year.

Other Chinese banks, which have been under pressure in recent days, also gained. China Construction Bank rose 2.8 percent, and Bank of China was up 2.1 percent

Foxconn, which makes iPhone handsets for Apple, gained 4.3 percent before steadying at HK$8.38, up 2.44 percent. Foxconn is expected to be a potential supplier for Apple’s iPad tablet computer.

China Railway Construction Corp rose 3.29 percent to HK$10.04 after it said it expected net profit attributable to equity holders for 2009 to rise more than 50 percent from a year earlier on significant growth in construction operations and other business segments as China increased investment in infrastructure.

China Coal Energy gained 4.48 percent to HK$12.12 after it said its raw coal production volume rose 8.2 percent in 2009 to 108.56 million tonnes, while sales volume climbed 9.1 percent to 96.76 million tonnes.

The Taiwan market rebounded from eight sessions of declines after gains on Wall Street and data showing strong demand for Taiwan’s exports.

The Federal Reserve offered a guardedly upbeat view of the U.S. economy, helping steady investor nerves after recent sharp declines. Stocks also got a lift from data showing the island’s index of leading indicators rose 0.8 percent in December from a month earlier.

The key TAIEX share index advanced 146.8 points to 7,706.8.

AU Optronics, the world’s No. 3 flat-panel maker, jumped 1.2 percent, with the optoelectronics sub-index 2.39 percent higher.

Smaller rival Chi Mei Optoelectronics gained 5 percent.

The two top LCD makers in Taiwan are likely to ship more panels in the first quarter than the fourth. The Economic Daily News reported that shipments would be better than the seasonal pattern of sequential drops of the past several years, with capacity utilization rates nearing 100 percent.

TSMC, the world’s top contract chip maker rose 2.8 percent and smaller rival UMC climbed 1.2 percent.

The Commercial Times reported that analysts expect TSMC’s profits and capital spending to reach records this year as major foreign chip makers are speeding up outsourcing manufacturing to chip foundries and TSMC could run at full capacity in the first half of this year.

TSMC is set to report its strongest profit in two years in the fourth quarter, and rival UMC could have returned to the black as a slew of technology products boosts chip sales.

TMSC will announce its earnings later on Thursday and UMC will announce on Feb. 3.

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Hon Hai rose 3 percent. The components maker has been named by UBS as the assembler of Apple Inc’s new iPad tablet.

Bank shares rose, with Cathay Financial, the island’s top listed financial holding firm, gaining 1.85 percent. Fubon Financial, parent of Taiwan’s No. 2 life insurer, rose 3.01 percent and smaller rival Shin Kong Financial jumped 2.86 percent.

Taiwan has given preliminary approval for local banks to invest in Chinese lenders, which would provide growth opportunities.

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