Asian Market Snapshot: Stocks End Mostly Higher While Japanese Equities Fall

Asian stocks gained today in spite of signs pointing to a decline in the global economy. U.S. equities struggled on Friday as employment data hampered investor confidence. The Bureau of Labor Statistics (BLS) reported that U.S. payrolls fell 131,000 in July 2010, after a 221,000 decline in June (revised down from the previous 125,000). The headline number reflects a 143,000 decline in temporary census workers. (See RGE Critical Issue: U.S. Labor Market: Private Payrolls Anemic; Labor Force Decline Keeps Unemployment Rate Steady) While most Asian markets gained, Japanese stocks experienced losses on the day.

The MSCI Asia Pacific Index increased by 0.70% to 122.40 while the MSCI Asia Apex 50 advanced 0.59% to 774.37.

In Japan the NIKKEI 225 fell 69.93 points or 0.72% to 9,572.49. The decrease in Japanese equities was preceded by a report from Goldman Sachs that lowered the country’s economic growth prospects. The report pointed to a decrease in exports as well as the removal of stimulus measures as catalysts for an economic slowdown.

In Hong Kong the Hang Seng Index gained 0.57% to close at 21,801.59.

China’s Shanghai Composite Index finished at 2,672.53 after rising 0.53%.

India’s BSE SENSEX 30 jumped 0.79% to 18,287.50.

The Korean KRX 100 was up 0.34% or 12.93 points at closing time. Also, on August 6, 2010, the Korea Customs Service (KCS), reported that trade between North and South Korea registered at US$123.1 million in June 2010, down 32.0% from April, when relations were much less strained. However, a customs official noted that the decline was not as sharp-as-expected since South Korea continues to maintain the Kaesong complex trade channel, which accounts for about 70.0% of total trade with North Korea. (See RGE Critical Issue: How Will Increased Tensions in the Korean Peninsula Impact South Korea?)

In Australia the S&P/ASX 200 gained 0.63% or 28.80 points on the day to close at 4,594.90. Morgan Stanley and Citigroup have ASX 200 2010 end-of-year targets of 5200 and 5500, respectively—”that would actually mean quite a strong rally,” says Justin O’Brien from Morgan Stanley Smith Barney. (See RGE Critical Issue: Will 2010 Bring Australian Equities Solid Returns?)

While the rupiah stayed flat, the Aussie dollar, renminbi and rupee strengthened against the dollar. The yen and kiwi also weakened against the dollar.

The yields for 10-year sovereign bonds decreased throughout the region. However the yield on the 10-year Indonesian sovereign bond increased by 0.3 basis points.

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