Asian Market Snapshot: Markets Mostly Up on Increase in U.S. New Home Sales

Most indices posted gains on Tuesday as the increase in new home sales in the U.S. renewed investor confidence. New homes sales rose 23.6% m/m in June after falling 36.7% m/m in May. In spite of the jump, new home sales continue to remain at a depressed level as they have decreased more than 76% from the July 2005 peak. (See RGE Critical Issue: U.S. Housing Demand Languishes Following Tax Credit Expiration).

The MSCI Asia Pacific Index advanced 0.5%, while the MSCI Asia Apex 50 advanced 0.6%. The MSCI Asia Apex 50 was led by the consumer goods and oil/gas sectors, which gained 1.54% and 1.05% respectively.

In Japan, the NIKKEI 225 slid 0.1%. Many Japanese firms are scheduled to release earnings reports this week. Canon, the major Japanese exporter, reported a net income of 67.64 billion yen (approximately $778 million), exceeding analysts’ estimates. Second-quarter profits in 2010 represented more than a 300% increase over profits in the same period one year earlier.

In Hong Kong, the Hang Seng rose 0.6%. With the exception of utilities, all sectors gained on Tuesday; utilities fell 0.28%. The Hang Seng closed at 20973.4, its highest close since April 30.  Also, exports from Hong Kong jumped 26.7% in June 2010 from June 2009. Rising exports in Hong Kong are an indicator of the Asian growth that has stimulated trade in the region.

The Shanghai Composite dropped 0.53% to 2575.37. Consumer goods (up 0.55%) and health care (up 0.21%) were the only sectors that advanced. The decline ended the streak of six consecutive sessions where the index posted gains; the Shanghai Composite index is down 21% this year.

The Indian SENSEX 30 climbed 0.27%. Industrials (down 0.73%) was the only sector to fall. On Tuesday, the Reserve Bank of India raised interest rates to combat rising inflation. The repurchase rate was increased by 0.25 percentage points to 5.75%, while the reverse repurchase rate was increased by 0.5 percentage points to 4.5%.

Australia’s S&P/ASX 200 advanced 11.30 points, or 0.25%, to close at 4497.40. 

South Korea’s KRX 100 gained 0.05%. The economy in South Korea grew 1.5% q/q and 7.2% y/y in the second-quarter, according to an announcement by the nation’s central bank.  (See RGE Critical Issue: South Korea Posts Strong Growth in H1 2010: What Downside Risks Loom?).

On currencies, the yen was quoted at 87.480, down 0.03% against the dollar, while the Aussie dollar was quoted at 1.105, down 0.01% against the dollar. The rupiah stayed flat and the renminbi was down 0.01% against the dollar.

The yields on 10-year sovereign bonds slid in Japan, New Zealand and Indonesia. Price decreases led to increases on the yield in China, Australia, India and Hong Kong.

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