Asian stock markets on Thursday-Higher Ahead Of BOJ, ECB Decisions

Asian stock markets are mostly higher on Thursday, tracking the overnight gains on Wall Street. However, gains are muted as investors await interest rate decisions from the Bank of Japan and the European Central Bank later in the day.

The Bank of Japan is widely expected to keep its benchmark lending rate unchanged at -0.1 percent, while also holding the 10-year yield target at flat.

The ECB is also widely expected to keep all its three interest rates unchanged for an eleventh consecutive policy session and retain its asset purchases that are set to run until the end of the year.


In late-morning trades, the benchmark S&P/ASX 200 Index is adding 32.70 points or 0.57 percent to 5,764.80, off a high of 5,770.80. The broader All Ordinaries Index is up 29.90 points or 0.52 percent to 5,809.30.

The major banks are extending strong gains from the previous session. Commonwealth Bank, National Australia Bank, ANZ Banking and Westpac are higher in a range of 0.9 percent to 2.7 percent.

In the mining space, BHP Billion is advancing almost 1 percent and Rio Tinto is up 0.1 percent, while Fortescue Metals is edging down 0.1 percent.

South32 reported a 2 percent increase in aluminium production and a 5 percent increase in manganese ore production, but missed its full-year production guidance for several other commodities. The company’s shares are down more than 1 percent.

Gold miner Newcrest Mining is edging up less than 0.1 percent, while Evolution Mining is rising more than 2 percent after it reported a 5 percent increase in full-year gold production and achieved its output forecast.

Among oil stocks, Oil Search is adding more than 1 percent and Woodside Petroleum is up 0.4 percent.

Santos has raised the lower end of its full-year production and sales outlook after a strong second quarter. The company’s shares are gaining almost 7 percent.

Myer Holdings said it will take a A$45.6 million hit after writing off the value of its 20 percent stake in Topshop’s Australian franchisee and also lowered its full-year profit outlook. The department store chain’s shares are losing more than 8 percent.

Shares in Bellamy’s Australia are down almost 11 percent after the embattled infant formula maker resumed trading following the surprise suspension of a key Chinese regulatory licence for its newly acquired canning facility.

On the economic front, The Australian Bureau of Statistics said that the jobless rate in Australia came in at a seasonally adjusted 5.6 percent in June. That was in line with expectations and unchanged from the May reading following an upward revision from 5.5 percent.

The Australian economy added 14,000 jobs in June to 12,166,900. That was shy of expectations for 15,000 following the downwardly revised 38,000 in the previous month.

In the currency market, the Australian dollar made gains against the U.S. dollar, aided by a recovery in iron ore and oil prices. In early trades Thursday, the local unit was trading at US$0.7956, up from US$0.7922 on Wednesday.

The Japanese market is rising following the positive cues overnight from Wall Street and as investors awaited the Bank of Japan’s interest rate decision due later in the day.

In late-morning trades, the benchmark Nikkei 225 Index is up 85.62 points or 0.43 percent to 20,106.48, slightly off a high of 20,108.13 earlier.

The major exporters are modestly higher despite a stronger yen. Canon is up 0.3 percent, Panasonic is adding 0.5 percent and Sony is higher by almost 1 percent, while Toshiba is losing almost 2 percent.

Among automakers, Toyota is up 0.4 percent, while Honda is losing 0.1 percent. In the banking sector, Mitsubishi UFJ Financial is edging up less than 0.1 percent and Sumitomo Mitsui Financial is declining almost 1 percent.

In the oil space, Inpex and Japan Petroleum are rising more than 1 percent each after crude oil prices extended gains overnight.

Among the other major gainers, Maruha Nichiro is rising more than 8 percent, Tokai Carbon is higher by 7 percent and TDK Corp is gaining almost 5 percent. On the flip side, DeNA Co. is losing more than 4 percent and Fast Retailing is down 2 percent.

In economic news, the Bank of Japan will wrap up its monetary policy meeting and then announce its decision on interest rates. The bank is widely expected to keep its benchmark lending rate unchanged at -0.1 percent, while also holding the 10-year yield target at flat.

The Ministry of Finance said Japan posted a merchandise trade surplus of 439.907 billion yen in June, down 35.9 percent on year. The headline figure was shy of expectations for a surplus of 488.0 billion yen, following the 204.2 billion yen deficit in May.

Exports were up 9.7 percent on year to 6.607 trillion yen, topping expectations for an increase of 9.5 percent. Imports climbed an annual 15.5 percent to 6.167 trillion yen versus forecasts for 14.4 percent.

In the currency market, the U.S. dollar is trading in the upper 111 yen-range on Thursday.

Elsewhere in Asia, Shanghai, South Korea, Indonesia and Hong Kong are also up with modest gains. Singapore, New Zealand, Taiwan and Malaysia are all lower.

On Wall Street, stocks closed higher on Wednesday as buying interest was generated in reaction to a report from the Commerce Department showing a bigger than expected rebound in housing starts in the month of June. Upbeat earnings news from financial giant Morgan Stanley also contributed to the strength on Wall Street.

The Dow rose 66.02 points or 0.3 percent to 21,640.75, the Nasdaq advanced 40.74 points or 0.6 percent to 6,385.04 and the S&P 500 climbed 13.22 points or 0.5 percent to 2,473.83.

The major European markets also moved to the upside on Wednesday. While the German DAX Index crept up by 0.2 percent, the U.K.’s FTSE 100 Index rose by 0.6 percent and the French CAC 40 Index advanced by 0.8 percent.

Crude oil futures rose Wednesday following the release of a report showing a bigger than expected weekly drop in U.S. crude oil inventories. WTI crude for August delivery climbed $0.66 or 1.4 percent to close at $47.06 a barrel on the New York Mercantile Exchange.



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Pramod Baviskar

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