Asia Market Snapshot: Asian Stocks Rise on Intel Sales and Singapore’s Growth Forecast

Intel Corp, the world biggest semiconductor manufacturer, reported yesterday Q2 sales of US$10.8 billion, beating analysts’ estimates of US$ 10.3 billion amid increasing global semiconductor capex. Intel also forecasted 66% gross profit margin for the year and Q3 sales of US$11.6 billion, topping expectations of US$10.9 billion.ASML, Europe’s largest semiconductor equipment maker, also reported Q2 net income of EUR 239 million, beating analysts’ estimates of EUR203million. The company raised its full year sales forecast to US$4.8 billion. The strong performance in the technology sector helped lift Asian stocks. Singapore also added to market optimism as it raised this year’s economic growth forecast to 13-15%.

The MSCI Asia Pacific index rose 1.4% to 117.61 while the MSCI Asia Apex 50 gained 1.11% to 739.61.

In Japan, stocks rose on Intel’s and Komatsu’s earnings outlooks.The NIKKEI 225 gained 2.71% to 9,795.24.Komatsu rallied 5.4% after raising its first half net income by 41% to 52 billion yen.  Toyota surged 4% while Nissan gained 3.9% as investors sought consumer related sectors.

In Hong Kong, HSBC led stocks higher after Intel forecasted sales exceeded analysts’ estimates.The Hang Seng index rose 0.64%.Lenovo jumped 3.2% while BOC Hong Kong rose 4.3% after PBoC appointed it to handle transactions with Taiwanese banks.

In mainland China, stocks rose on strong earnings expectations and on speculation that weak economic data this week will lead to an easier credit tightening stance.The Shanghai Composite advanced 0.82%.Automakers led the rally with Jiangling Motors up 5.2%.Fitch said today that Chinese bank lending in the first half was 28% higher than official estimates as more loans were repackaged into investment products

In India, stocks fell on concern that the central bank may hike rates at its July policy meeting amid mounting inflation pressures. The BSE Sensex 30 fell 0.27%. Reliance declined 0.53% while Infosys fell 1.28%.

In Australia, stocks advanced led by banks and miners amid strong commodities prices. The S&P/ASX 200 rose 1.87%. Westpac gained 3.23% while Commonwealth Bank climbed 3.12%.  BHP jumped 2.1%. Australian treasurer Wayne Swan forecast a decline in unemployment in 2010-11 to 4.75% from 5.1% and a higher than expected surplus of A$3.1 billion in three years amid a rise in tax revenue from mining. The consumer sentiment index also jumped 11.1% to 113.1 points.

In New Zealand the NX 50 advanced 0.62% to 3,027.

In Seoul, stocks ended higher after earlier declines. The KRX 100 gained 1.26% to 3,682.11.Samsung, Asia’s biggest maker of semiconductors, jumped 3.5%.

The Bank of Thailand in line with expectations raised its benchmark interest rate 25 bps to 1.5% citing strength in the recovery.

The yen gained 0.05% against the dollar to 88.53. The Aussie dollar fell 0.11%against the USdollar while the Hong Kong dollar remained flat.The rupee declined 0.056% to 46.69.

The 10-year Japanese Government Bonds (JGBs) fell as investors reallocated toward risky assets amid stronger earnings outlook. The yield on the 10-year JGB rose 1.4 bps to 1.149%. The 10-year yield on Indian bonds gained 0.7 bps to 7.63%. Sovereign cash and CDS spreads across the region narrowed except Australian cash spread over JGBs (up 5.1 bps).


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