Kotak | Media | Hang Seng at highest level

Financial Times

20 July 2009

Asian stocks made a strong start to the week as the positive impact of last week’s encouraging US corporate earnings figures continued to buoy the markets.

The mood was lifted by reports that troubled US lender CIT Group had managed to secure a rescue loan and avoid bankruptcy.

Many of the leading indices reached levels last seen in September 2008, although Tokyo and Jakarta were closed for public holidays.

“Investors confidence in a global recovery is increasing and as such we are seeing a return of risk appetite, with technology stocks leading the gains,” said Nitin Jain at financial services group Kotak Mahindra.

Joseph Wat from Atlantic Investment Management said that there were gains across the board, with export-focused trades, such as shipping and port stocks, among the biggest risers. China’s Cosco Pacific, the world’s second-largest shipping company, was up 10.8 per cent, ending the day at HK$10.38.

“The large inflow into exchange-traded funds also helped drive demand in the markets,” said Mr Wat.

But he argued that markets were about to see a consolidation period because of the holidays, and that the rush into equities at the end of the second quarter might not be repeated this quarter.

Hong Kong was one of the region’s best-performing markets, and the Hang Seng Index rose 3.7 per cent to 19,502.37, its highest level for 10 months.

China Life, the world’s largest insurer, jumped 6.5 per cent to HK$32.80, while rival Ping An soared 10.3 per cent to HK$65.50.

The Shanghai Composite Index closed 2.4 per cent stronger at 3,266.92 – a 13-month closing high – despite warnings from China’s leading banking regulator on weak property market growth and the risks of increased bank lending.

Property leader China Vanke dropped 0.8 per cent to Rmb13.96, while Industrial & Commercial Bank of China rose by by 0.6 per cent to Rmb5.27.

Metal and coal shares, however, remained upbeat, and China’s top aluminium maker, Aluminium Corp of China closed 10 per cent higher at Rmb16.57 and China Shenhua Energy’s climbing 5.4 percent to Rmb36.17.

India’s BSE Sensex was up 3 per cent at 15,191.01, its highest close in five weeks.

Reliance Industries, the benchmark’s most heavily weighted stock, led the gains, rising 5 per cent to Rs2,030.65.

The shares were boosted by news that the government had filed a petition to invalidate a pact between the company and Reliance Natural Resources which had required Reliance to sell gas at below-market prices to Reliance Natural.

Tata Consultancy Services Ltd, India’s leading IT-services company by sales, jumped 15.3 per cent to Rs500.10 after quarterly profits rose 22 per cent, exceeding expectations.

In Seoul, the Kospi closed at its highest in 10 months, finishing 2.7 per cent higher at 1,478.51.

Samsung Electronics, the world’s top memory chipmaker, rose 3 per cent to Won690,000 and Hynix Semiconductor was up 7 per cent to Won16,700.

Mining stocks pushed Australia’s S&P/ASX 200 index close to its highest in six weeks. It ended 1.2 per cent higher at 4,050.3. BHP Billiton gained 2.3 per cent at A$36, while Rio Tinto rose 1.8 per cent to A$3.40.

In Taipei, the weighted index rose 1.3 per cent at 6,938.86, with banking shares gaining on hopes of a financial agreement with China which would increase Taiwan’s economic competitiveness.

Hang Seng at highest level in 10 months

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