Market Update
Asian markets overcame a weak open and mostly rallied Monday as they began the week on a positive note.
The Nikkei slipped 0.4%. The Shanghai Composite gained 2.1% while the Hang Seng added 1.8%. The Sensex extended last week's gains, creating fresh records as it surged another 2.4%. The All Ordinaries edged 0.2% lower.
Earlier, data showed Japan’s economy watchers index fell more-than-expected in April to a seasonally adjusted 41.6 from 67.9 in March. Another official report also revealed some disappointing balance-of-payment data. Yet another report showed a smaller-than-expected current account surplus for March.
The Sensex surged in Mumbai as India looked to conclude its voting today. Hopes are high for a Narendra Modi-led BJP victory to overturn 10 years of Congress misrule characterized by a series of high-profile corruptions scams that have destroyed the investment cycle and put a spanner in India’s economic growth.
The rupee too, rallied to its strongest in almost a year.
Exit polls by media companies (which have proven unreliable in the past), are due to be released after 6.30 p.m. today while actual results after completion of counting will be declared this week Friday.
The BJP is seen as more investment-friendly and a win for the opposition party will be interpreted as a positive development for a revival in business confidence, investment and growth. The current Congress-led UPA government has reduced India’s economic growth to its slowest in a decade.
Stocks on the Move
Investors focused on corporate earnings Japan.
Among the companies reporting results, Renesas Electronics fell 9.9% while Asahi Glass slipped 3.3%. Konica Minolta dropped 11% while Sumitomo Electric ended 6.5% lower.
Among the gainers, Olympus scaled up 4.8% while Sapporo Holdings added 2.4%.
Hitachi and Nissan ended 0.7% and 0.2% lower each respectively ahead of their results. Reporting after the market close, Hitachi unexpectedly forecast a drop in profit this year even as it reported 2013 full-year revenue below analysts’ estimates.
Also reporting after the close, Nissan Motor forecast profit to grow at a slower rate and a low operating margin.
Some of the big movers in Hong Kong included Tencent, up 5.3% after a broker recommendation. China Shenhua Energy added 3.1%. Sinopec climbed 2.9% while in Shanghai, it was up 2.2%.
Agile Property ended 1.2% higher as it reversed initial losses after reporting a drop in April pre-sales.
Banks were all gainers with ICBC up almost a percent and AgBank 1.9% higher. China Construction Bank added 1.7%.
Coal India was the top gainer on the Sensex, up 7%, followed by HDFC Bank, up 4.6%, Tata Motors, up 4.1, and Hero MotoCorp and Maruti Suzuki, up 4% each, respectively.
In Sydney, miners ended mostly lower.
Coca-Cola Amatil was down 0.2% after the company’s new chief executive spoke of a management reshuffle.