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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