(RTTNews) - The mood in Asian stock markets is somewhat cautious on Monday with the negative close on Wall Street Friday on the back of some disappointing earnings reports hurting sentiment in some parts of the region. Despite an early setback, some of the markets have recovered and regained a bit of lost ground on bargain hunting at lower levels.

The Australian market got off to a highly negative start with financial, energy and materials stocks declining sharply and dragging down the key indices to lower levels. However, with some blue chips garnering support at lower levels, the market is seen making a recovery of sorts post mid-morning.

The benchmark S&P/ASX 200 index, which had dropped down to 4,772 in early trades, is currently down with a loss of 36.4 points, or 0.8%, at 4,800. The broader All Ordinaries index is down 36.6 points, or 0.8%, at 4,806.

Among key bank stocks, ANZ Bank is down by over 3%, Commonwealth Bank of Australia is down 0.9%, National Australia Bank is down 2% and Westpac Banking Corporation is trading lower by 1.8%. Diversified financials stock Macquarie Group is declining by about 1.3%.

Top miners Rio Tinto and BHP Billiton have recovered from an early setback and are currently trading lower by just 0.6% and 0.4% respectively. Newcrest Mining is up 1%. Orica, Fortescue Metals and Bluescope Steel are trading lower by 1%-3%.

In the energy space, Woodside Petroleum, Santos and Origin Energy are trading lower by 0.4%-1.2%. Oil Search has gone into a trading halt, ahead of an expected announcement to sell a US$1 billion-plus stake in a major project to an Abu Dhabi sovereign wealth fund.

Shares of Bell Financial Group Ltd have risen sharply following an announcement from the company that profits for the nine months to September surged 52% over the previous corresponding period on increases in transaction volumes at the stock broker and financial advisory firm. The company said unaudited profit before tax for the nine months to September 30 was A$23.4 million, equivalent to 10% more than the audited result for the whole of calendar 2008, the company’s reporting year. The stock is currently up as much as 8.5%.

On the economic front, the Reserve Bank of Australia says the outlook for Australia’s economy is positive with continuing strong growth from Asia expected to boost demand for domestic resources and promote investment in the commodities sector. However, the central bank also warns that Australia’s business cycle will be more closely linked than ever before to Asia and the nation must ensure it remains flexible to respond quickly in terms of labor and capital.

In the currency market, the Australian dollar opened lower as demand for the risk sensitive currency declined on disappointing results from top U.S. firms. In early trades, the Aussie was quoting at US$0.9154-US$0.9156, down from Friday’s close of US$0.9223-US$0.9226. At noon, the Australian dollar was trading at 0.9127 to the U.S. dollar.

In the Japanese market, automobile and bank stocks are trading notably lower. The benchmark Nikkei 225 index, which fell to 10,125.3, is currently trading at 10,172, down 85.5 points, or 0.8%, from its previous close.

Automobile stocks are mostly trading in the red. Honda Motor, Toyota Motor, Nissan Motor and Suzuki Motor are trading lower by 1%-3%.

Among bank stocks, Sumitomo Mitsui Financial, Resona Holdings, Bank of Yokohama, Mitsui UFJ Financial and Mizuho Financial are trading notably lower.

Shares of trading houses and securities firms are also seen struggling for support. Food, chemicals and pharmaceuticals stocks are exhibiting a mixed trend. Steel, non-ferrous metals, machinery and electric machinery stocks are mostly down in the red.

After suffering heavy losses in recent sessions, the Japan Airlines stock has rallied sharply on Monday with investors going in for some bargain hunting at the counter. Reports that the government is considering rebuilding the airliner under the aegis of Enterprise Turnaround Initiative Corp. of Japan, appear to be aiding the rally in early trades. The stock is trading over 10% up at 112 yen.

Fast Retailing declined sharply in morning trades after recent strong gains. Besides profit taking, a rating downgrade by JP Morgan Securities Inc. contributed significantly to the stock’s slide. The stock is currently trading lower by over 3%.

Shares of Kyoei Steel Ltd., are down sharply following the company canceling the merger with Tokyo Tekko Co. Kyoei Steel is trading 6% down, while Tokyo Tekko is declining by about 5%.

On the economic front, the Japanese government is trying to make the size of Japan’s general-account budget for fiscal 2010 no more than 92 trillion yen, Finance Minister Hirohisa Fujii said Monday.

Fujii told reporters in Tokyo that the government will stick to its policy of issuing no more than 44 trillion yen worth of debt-covering bonds to fund the budget for the year starting in April, despite a sharp fall in tax revenue due to the recession. Last week, the amount of budgetary requests submitted by government ministries and agencies to the Finance ministry for fiscal 2010 reached an all-time high of 95.04 trillion yen.

At a meeting of Bank of Japan branch office managers, Governor Masaaki Shirakawa said the economy is gathering steam and, despite lingering harshness, is seeing signs of improvement in corporate financing. He also said the economy “is likely to start recovering” and continue to grow down the road.

In the currency market, the U.S. dollar traded in the upper 90 yen zone early Monday in Tokyo, little changed from Friday’s levels. In early trades, the dollar fetched fetched 90.89-90.91 yen against Friday’s close of 90.87-90.97 yen in New York and 91.16-91.18 yen in Tokyo. The yen is currently trading 90.88 to the U.S. dollar.

The South Korean market, which almost rebounded into the positive territory after early weakness, has faltered again, with a few front line stocks facing resistance at higher levels.

The benchmark KOSPI index, which fell to 1,614.8 in early trades, but recovered to 1,637, is currently down 8.4 points, or 0.26%, at 1,632.

Bank stocks are among the prominent losers. Korea Exchange Bank is down as much as 4.5%, while Woori Finance and Shinhan Financial are trading lower by about 1.5% and 0.6% respectively. However, KB Financial is bucking the trend and is up 1% over its previous closing price.

In the tech space, Samsung Electronics is trading 1.5% down and LG Display LCD is down by about 0.8%, while LG Electronics and Hynix Semiconductor are trading higher by 2.8% and 0.8% respectively.

Among automobile stocks, Kia Motor and Hyundai Motor are trading notably higher, while Ssangyong Motor is up as much as 15%. In the shipping space, Samsung Heavy Industries and Daewoo Shipbuilding are trading lower, while Samsung Heavy Industries and STX Pan Ocean are up with modest gains.

Oil stocks are trading mixed. Among steel stocks, Hyundai Steel is up 1.8%, while POSCO is trading lower by 1.1%. Airliners and telecom stocks are exhibiting weakness.

Among other stocks markets in the Asia-Pacific region, Shanghai is trading sharply higher. Hong Kong, New Zealand and Taiwan are up with modest gains, while Indonesia and Singapore are trading weak. Stock markets in the region had closed on a mixed note Friday.

On Wall Street, stocks declined by notable margins on Friday, with a worse than expected report on consumer sentiment and disheartening earnings data contributing to the weakness. The major averages all closed on the downside, offsetting some of the strong gains posted during the middle of the week.

The Dow closed lower by 67 points, or 0.7%, at 9,995.91, the Nasdaq drifted down by 16.5 points, or 0.8%, to 2,156.8 and the S&P 500 finished with a loss of 8.9 points, or 0.8%, at 1087.7.

Major European markets all closed notably lower on Friday. The French CAC 40 index and the German DAX index both fell 1.5%, while the U.K.’s FTSE 100 index closed 0.6% down.

Crude oil continued to rise on Friday, extending a yearly high, as some encouraging industrial production data gave traders higher hopes for energy demand. Light sweet crude for November climbed to US$78.53 a barrel, up 95 cents on the session.

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Posted in Categories: Australia, Eurozone, Japan, New Zealand, Releases, Stocks, USA.

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