Asian markets mostly up despite downbeat Japan data; Tokyo slips

Passersby are reflected on a graph showing the Nikkei stock average movement outside a brokerage in Tokyo yesterday. Tokyo stocks ended down 0.7%, or 95.76 points, at 13,519.43 in yesterday’s trading.

AFP/Tokyo

Asian markets were mostly up yesterday despite Japan posting lower-than-expected economic growth and US stocks retreating from record peaks last week.

Tokyo stocks ended down 0.7%, or 95.76 points, to 13,519.43 after second-quarter GDP figures revealed that Japan’s economic growth had slowed more than analysts expected.

Other Asian markets fared better, buoyed by positive industrial output figures out of China late last week.

Sydney finished up 1.06%, or 53.5 points, at 5,108.7 while Seoul closed up 0.22%, or 4.12 points, at 1,884.83.

In afternoon trade Chinese markets showed the strongest gains with Hong Kong jumping 2.01% and Shanghai 2.03%.

On Friday, China reported industrial growth for July reached a five-month high, easing fears that the world’s second-largest economy was heading towards a slowdown.

Industrial production, which measures output at factories, workshops and mines, rose 9.7% year-on-year, well above analyst expectations.

“Positive sentiment from the economic data last week should provide a strong floor while concerns over demand growth in heavyweights such as property developers may cap the potential rise,” Changjiang Securities analyst Wu Bangdong told Dow Jones Newswires.

In contrast, disappointing figures out of Japan yesterday showed economic growth in the world’s third-largest economy slowed in the April-June quarter, raising questions about Tokyo’s bid to revive its economy after years of stagnation.

The cabinet office said Japan’s economy expanded 0.6% from the previous quarter, slower than a revised 0.9% increase between January and March.

The figures indicate an annualised increase of 2.6%, down from the 4.1% annual rate in the first three months of the year.

The markets will now look to key US economic figures — including retail sales and industrial output — due out this week, as investors eye clues as to when the US Federal Reserve will start rolling back its huge stimulus drive.

The dollar rose against the yen as Japanese officials sounded upbeat on the economy despite the lower-than-expected GDP figures.

In afternoon Tokyo trading, the greenback stood at ¥96.50, up from ¥96.24 in New York Friday.

The euro bought $1.3325 and ¥128.28, down slightly from $1.3338 and 128.35 in US markets.

In oil markets, New York’s main contract, West Texas Intermediate for delivery in September, was up two cents to $106.05 a barrel in afternoon Asian trade and Brent North Sea crude for September shed one cent to $108.07.

Gold was at $1,326.31 at 1050 GMT compared with $1,309late on Friday.

In other markets, Wellington fell 0.25%, or 11.34 points, to 4,522.30; Taipei rose 0.6%, or 47.24 points, to 7,903.38; Kuala Lumpur rose 0.3%, or 5.25 points, to 1,784.57; Manila rose 0.62% or 39.58 points to 6,443.81; Singapore closed up 0.07%, or 2.33 points, at 3,232.24; Jakarta closed down 0.93%, or 43points, at 4,597.78; and Markets in Thailand are closed yesterday for a public holiday.

Indian equities gain most in four weeks

Indian stocks climbed the most in four weeks as drug makers rallied on higher earnings and metal companies advanced.

Sun Pharmaceutical Industries, India’s biggest drug maker, jumped the most since 2009 after posting a 56% gain in net income before a one-time charge. Tata Steel soared 8.1% before earnings tomorrow. State Bank of India led declines for lenders as policy makers announced steps to drain cash from the financial system to boost the rupee.

The S&P BSE Sensex rose 0.8% to 18,946.98 at the close in Mumbai, the most since July 18.

Sun Pharmaceutical surged 7.1% to Rs541.7, the most since May 2009. The exporter’s profit jumped after sales of its generic drugs in the US climbed. Cipla jumped 2.3% to Rs418.75 after its first-quarter earnings beat analyst estimates.

Tata Steel surged 8.1% to Rs236.55 amid speculation lower raw material costs will boost profit. The company will benefit from a fall in contract prices of iron ore and coking coal, said Giriraj Daga, an analyst at Nirmal Bang Equities.

Jindal Steel & Power advanced 9.3% to Rs226.6. Sterlite Industries (India) increased 3.2% to Rs78.65. The S&P BSE Metal Index rallied 4.5%, extending last week’s 5.3% surge.

About 45% of Sensex companies that have reported earnings so far for the June quarter missed analyst estimates. That compares with 27% companies that missed forecasts for the March quarter and 43% in the three months through December, data compiled by Bloomberg show.

State Bank of India tumbled 3.5% to Rs1,605.35. The biggest lender’s first-quarter profit dropped more than analysts estimated as bad loans climbed amid a slowdown in Asia’s third-largest economy. HDFC Bank fell 1.4% to Rs602.2. The S&P BSE Bankex slid 1.1% to a one-week low.

The CNX Nifty Index on the National Stock Exchange gained 0.8% to 5,612.40. India VIX, which gauges the cost of protection against losses in the Nifty, rose 0.4%.