Asian markets trade higher Singapore exports fall

Asian markets were higher as global risk appetite resumed. The MSCI Asia Pacific index was 1.8% by late afternoon trading in Tokyo. Around four stocks advanced for each one that declined. The index is building on recent momentum after booking a 3.4% rise last week, the best week since the end of March this year. 

In regional economic news, Singapore’s exports unexpectedly fell in September as weakening expansion in the world’s biggest economies eroded demand for electronics and petrochemicals. Net exports excluding oil fell by around 4.5% compared to the same period last year. The market was expecting a decline, but the number was around 1% above the median estimate. Still, the rough patch may have passed with prospects improving for the next quarter. 

All eyes will be on the U.S. session tonight and whether recent gains can be consolidated. Companies reporting Tuesday in the US include Coca Cola, Bank of America, Apple and Yahoo. Tonight Asian time will see the official industrial production figures released in the U.S., with the market expecting a modest 0.2% rise. 

In Australia, Fortescue’s quarterly result is not outstanding but it also shows resilience in the business model as production numbers ramp up despite all the negative news around iron ore pricing. 

The group admits it will experience some pricing pressure in the next half but is working hard at lowering costs – in turn insulating margins. 

On first glance, we like what we see. Cash costs for the September quarter fell by 6% compared to the prior quarter, down to US$49.78. Production volumes were impacted in July but the run-rate is still in line with 55 million tonne per annum which will please the market.