Asian Market Snapshot: Most Stocks Rise on U.S. Industrial Production and Strong Corporate Earnings

Asian markets traded higher all throughout the day on stronger than expected U.S. industrial production data. U.S. industrial production unexpectedly rose 1% in July led by auto manufacturing, beating expectations of a 0.5% increase. (See RGE Critical Issue: U.S. Industrial Production Rises; Regional Surveys Continue to Show Weakness). Japanese auto and technology companies also posted stronger than expected earnings. 

The MSCI Asia Pacific Index gained 0.2% to 118 led by Australian banks. The MSCI ASIA APEX 50 declined 0.3% to 746.

In Japan stocks rose for the first time this week led by auto and technology exporters as U.S. industrial production rose more than expected. The Nikkei 225 advanced 0.9% to 9,241. Honda rose 2.4% while Canon gained 1%.

In Hong Kong, the Hang Seng Composite declined 0.5% to 21,023. Property shares were mixed as investors took profits after yesterday’s rally. (See RGE Critical Issue: Can Hong Kong’s Government Prevent a Property Bubble?).

In mainland China, the Shanghai SE Composite declined 0.2% to 2,666 led by property developers after a central bank adviser said real estate curbs shouldn’t be reversed. Poly Real Estate fell 1% while Vanke lost 1.7%.

In India, stocks rose led by exporters. The BSE SENSEX 30 advanced 1.2% to 18,257.

In Australia, the S&P/ASX 200 index was unchanged at 4,475 while in Korea; the KRX 100 advanced 0.4% to 3,692.BHP tumbled 4.4% in Sydney after Potash rejected its US$ 39 billion unsolicited bid.

Elsewhere in Asia, the Vietnamese stock market came under pressure after the central bank devalued the Vietnam dong (VND). (See RGE Critical Issue: Will the August Devaluation Reduce Pressure on the Vietnam Dong?).

On currencies the yen gained 0.04% to 85.3. The Aussie dollar rose 0.09% while the New Zealand Kiwi fell 0.07% to 1.395.

10-year JGBs rose with the yield down 2.3 bps to 0.924% while 10-year Australian and Malaysian sovereign yields narrowed slightly. Elsewhere in Asia, sovereign bonds declined. Sovereign CDS spreads narrowed across the region except in Hong Kong.Corporate spreads narrowed in Asia ex-Japan with the Markit iTraxx Asia ex-Japan 50 IG down 3 bps to 120 bps.The iTraxx Japan index fell 4 bps to 114 bps.

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