Asian Equities Advance Despite the Record Drop in Hong Kong's 1Q GDP

Published May 15th, 2009 - 02:22 GMT

Stock markets in the Asia/Pacific region ended the week higher, with the Nikkei rising 1.88%, following the advance in U.S. equities. Meanwhile, shares of export-based firms pushed higher as Japanese machine orders fell less than expected, with Sony Corp. leading the sector higher after the firm raised its outlook for future growth.



Asia Session Key Developments

·         Rio Tinto and Chinalco commit to rights issue

·         Hong Kong GDP Contracts 7.8% in first quarter

Asian Equities Advance Despite the Record Drop in Hong Kong’s 1Q GDP

Stock markets in the Asia/Pacific region ended the week higher, with the Nikkei rising 1.88%, following the advance in U.S. equities.  Meanwhile, shares of export-based firms pushed higher as Japanese machine orders fell less than expected, with Sony Corp. leading the sector higher after the firm raised its outlook for future growth. Moreover, Australian stocks rose for the first time this week as Rio Tinto and Chinalco assured investors that the firms plan to go through with the rights issue, which led the Hang Seng to end the session 1.5% higher from the previous close. However, shares in Hong Kong marked its biggest weekly decline in five weeks, and the market may face increased pressures over the following week and the outlook for future growth deteriorates.

NKY 225                                           9265.02

The Nikkei 225 Stocks Average climbed 171.29 points, or 1.88%, to close at 9265.02 in Tokyo, led by Sony Corp., the world’s second-largest electronics maker, which jumped 7.1% after the firm held an improved forecast for future growth. In addition, Komatsu Ltd., Asia’s biggest maker of earth-moving machinery, rose 3.1% after a government report showed machine orders fell less than expected. Meanwhile, Sumitomo Mitsui Financial Group Inc. added 6.8% as the London Interbank Offer Rate (LIBOR) fell 3bps, which is the biggest decline since March 19th.

HSI                                                         16790.70

The Hang Seng Index added 249.01 points, or 1.51% to close at 16790.70, trimming its weekly loss to 3.5%, which is the steepest decline since March 6. HSBC Holding Plc advanced 3.13% after six U.S. insurers were granted access to bailout funds, while Foxconn International Holding Ltd., the world’s largest contract maker of mobile phones, climbed 5.9% on speculation demand for its products will pick up. Meanwhile a government report showed economic activity dropped at a record pace in the first quarter as exports plunged 22.7%, and policymakers expect the annual rate of growth to contract between 5.5% and 6.5%, which would be the biggest downturn since 1962.

ASX 200                                            3773.20

The Australian stock markets snapped a four-day losing streak as the benchmark ASX 200 Index rose 49.80 points or 1.34% to close at 3773.20 in Sydney. BHP Billiton and Rio Tinto accounted for 40% of the gain on Friday as shares rose 3.2% 7.4%, respectively, after Rio said it remained committed to its proposed deal with Chinalco. Meanwhile, Financials were mostly higher, with National Australia Bank advancing 1.4% and QBE gaining 2.8%.



Notable Asian Session Event Risk / Economic Releases


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