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CMC Markets – Evening Update 09/01/13

By Donal Nee
CMC Markets Singapore

Asian markets were in a buoyant mood today as most of the regional Indices managed to finish in the positive. U.S earnings season kicked off last night with Alcoa getting proceedings on their way. The Aluminium company managed to come in line with analyst expectations, posting a profit of $242 million, or 21 cents a share, compared with a loss of $191 million, or 18 cents a share a year-earlier.

In Australia retail sales figures showed an alarming drop as consumers cut back on spending on household goods, this result could now put pressure back on the Reserve Bank to lower rates again. Retail sales figures showed a fall of 0.1% in November, disappointing analysts’ expectations who priced in a gain of 0.3%.

Despite today’s retail sales data, the Australian market managed to post gains, snapping its 3 day losing streak. This was helped by the miners and major banks which managed to offset falls in department stores and some gold miners. Alumina who are in partnership with Alcoa, were up 4.6% at $1.025 on the back of gains seen in Alcoa share price over night. The ASX 200 index rose 0.38%, to 4708.1; Japan’s Nikkei advanced 0.67% today as Honda, which makes about 80% of its sales outside of the country, rose 1.9 %. Toyota, Japan’s biggest carmaker also gained 2 %.

Hong Kong posted fractional gains helped by a rebound in property developers and energy producers. Metal shares also climbed after Alcoa swung back to quarterly profits. The Hang Seng Index rose 0.4%, shares in China Overseas Land & Investment Ltd. climbed 2% while PetroChina Co. rose 1.5%. Insurance company Ping An managed to finish up 0.88% despite reports that a deal previous agreed by HSBC Holdings to sell its stake in the insurer was in jeopardy as a Chinese lender who was financing the deal was backing away. HSBC shares were down 0.12% at the close.

The Straits Times managed to close up over 0.25% today, attributing to the gains was shopping mall owner CapitaMall Asia who traded up over 2%, helped by the continuing recovery seen in China. Midas holding also had a good day after a local broking house raise its price target on the stock. Midas managed to push up over 6% during today’s session.

Gold came off over $3 or 0.2% this morning however these losses were erased late in the session to trade around the $1,661.90 an ounce. The precious metal had jumped $15.90 an ounce, or 1%, to settle at $1,662.20 yesterday on signs of an increased in demand in Asia.

Tomorrow we will have Chinese Trade balance figures, PPI and CPI data are also due out later this week. Tomorrow we will also see the ECB and the Bank of England begin their policy meetings however most traders are now looking forward to the looming U.S reporting seasons. Equity markets have had substantial rallies in recent times and if company reports and outlooks for the future do not stack up to the optimism markets have already priced in we could see a pull back.