Asian markets mixed as Australian stocks close lower

Asian Markets were mixed in the morning session today. The Shanghai Composite Index was up 0.67% before the lunch break. Shanghai based companies such as taxi company Shanghai Qiangsheng Holdings (600662) outperformed, up 10% to the daily limit at CNY 9.23 after Walt Disney Co signed an agreement with the city to build its first mainland theme park.

Construction firm Shanghai Pudong Road and Bridge Co Ltd (600284) climbed 4%, while real estate developer Shanghai Lujiazui Finance &Trade Zone Development (600663) gained 6.2%.

The Hang Seng Index lost 25 points to 24851 in the morning. Key index weight HSBC (0005.HK) fell 1.7% to H$ 86.65 after the bank reported earnings so far this year that were “well ahead” versus a year earlier. It said there could be “some bumps in the road” for emerging markets.

Japan’s Nikkei rose 0.8% to a 3-month high. Resource-linked stocks rose on higher commodity prices as investors took a surprisingly robust US jobs report as a hint that the economy was in better shape. Sumitomo Metals Mining Co (5713.T) climbed 1.7% to JPY 1403 and Mitsui Mining and Smelting (5706.T) gained 2.3% to JPY 262. Shares of Credit Saison (8253.T) shot up 6.5% to JPY 1249 after the consumer credit firm raised its full-year net profit forecast to March 2011 to 12 billion yen from 9 billion yen, partially due to cost cutting.

Good volumes and a broad holding of ground suggest that the Australian share market has broken to a new, higher trading range. While the Australia 200 index is lower, 14 of those points are accounted for by stocks going ex-dividend today. The chances of a test of the 2010 high at 5,025 have increased significantly. While the financials appeared to be lag, they were held down by Macquarie (88c) and Westpac (74c) distributing dividends.

Other finance companies were slightly softer, as some of the recent takeover froth subsided. The best performing sector today was energy, where prices were fuelled higher by a surge in oil prices. The close above $87 a barrel in the US on Friday means that oil is within a whisker of a two year high. Woodside, Santos and Oilsearch all benefited. Smaller resource stocks were also positive.

Defensives had a mixed day. Consumer staple stocks were down, but retailers and healthcare stocks moved higher. Telcos were flat on the day. Orica shares were one of the top performers, after a very solid profit announcement, dragging fellow chemicals group Incitec Pivot higher in its wake.

There is some chatter around dealing desks of the potential for BHP to run the ruler over either, however they do not appear to have sufficient size to attract BHP’s attention.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.