Asia boosted by Mumbai 30-month high

A fresh 30-month high for Mumbai stocks and Shanghai shares hitting a three-month peak helped drive Asian markets to their fifth consecutive day of gains.
EDITOR’S CHOICE
Verbal intervention gives yen rocky ride - Aug-12
Money Supply: BoJ governor on the yen - Aug-12
Lex: Yen - Aug-12
Investors sceptical over yen intervention - Aug-11
Yen’s rise spoils party for Japan’s exporters - Aug-09
Insight: Yen has edge over gold - Aug-04

The FTSE Asia-Pacific rose 0.8 per cent on Thursday to 230.63, extending its bounce-back from last week’s worst weekly losses in six.

Even Japanese stocks that remain under heavy pressure from the strong yen made gains – rebounding from the eight-month lows reached this week.

But market commentators expressed wariness about the extent of the gains.

“No bad news is getting to be good news for the market,” said Gajendra Nagpal, chief executive of Unicon Financial. “I would not go ga-ga about this rally. Interest of foreign institutional investors is there but domestic money is eluding us [in India]. It is time to get cautious.”

“The whole world is sort of holding its breath to see what happens, especially in the [US],” said Alex Boggis, of Aberdeen Asset Management.

Financials led the gains for the Shanghai Composite, which rose 0.8 per cent to 2,688.0, as analysts said banking shares were set for further progress due to increasing investor confidence in the sector.

“Banks have had good earnings results recently and China Everbright Bank’s listing [on Wednesday] has given them momentum to rise further,” said Chen Xingyu, of Phillip Securities.

On its second day of trading, Everbright added 1.1 per cent to Rmb3.70 following its robust gains of 18 per cent on debut.

Another boost for banks came after Central Huijin Investment, the state investment company that is the largest shareholder in China’s state-controlled banks, said it would sell up to $5.9bn of bonds.

Industrial & Commercial Bank of China rose 0.7 per cent to Rmb4.18 and China Construction Bank climbed 0.8 per cent to Rmb4.82 – Huijin owns stakes in both banks.

China Shenhua Energy led gains among coal producers on talk that the nation’s biggest producer of the fuel will receive an asset injection by parent company Shenhua Group to become more competitive.

Shenhua Energy climbed 5.4 per cent to Rmb25.71, the highest since May 5.

Shandong Gold Mining added 2.5 per cent to Rmb43.73, its highest since December, as bullion prices rose.

In Mumbai, the BSE Sensex climbed 1.1 per cent to 18,454.94, its highest close since February 2008, supported by the outlook for robust domestic growth.

Financials also led the way with ICICI Bank, the second-largest lender, rising 4.7 per cent to Rs1,013, its highest since March 2008.

Housing Development Finance Corp, the biggest mortgage lender, added 3.8 per cent to Rs645.05, its highest close since at least January 1991.

In Tokyo, the Nikkei 225 Average rose 1.3 per cent to 9,362.68, lifted by bargain-hunting and hopes of renewed stimulus spending by the government.

Mitsubishi Estate, Japan’s biggest property developer by market value, jumped 3.4 per cent to Y1,323 after a report that the country’s home loan agency will extend low mortgage rates.

Elsewhere, the Hang Seng index in Hong Kong edged forward 0.2 per cent to 21,072.46 and the S&P/ASX 200 in Sydney by 0.1 per cent to 4,479.0.

BHP Billiton, the world’s largest miner, slipped 0.3 per cent to A$38.30 after ratings agency Standard and Poor’s said it would downgrade its credit rating if it were to proceed with its $39bn bid for PotashCorp, the Canadian fertiliser group.