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Market Update

Asian Markets Mostly Higher

Asian markets were mostly higher Tuesday as the Chinese markets got their first chance to react to data as they returned from an extended weekend break.

The Nikkei was up 0.7%. The Shanghai Composite was off 0.1% while the Hang Seng gained 0.9%. The Sensex added 0.7% while the All Ordinaries was down 0.7%.

According to official data earlier today, China’s services PMI rose to 55.5 in May, up from 54.8 in April. HSBC also released the final reading of its manufacturing PMI which it revised downward to 49.4 from an initial reading of 49.7 although that was still an improvement over Aprils’ 48.1.

In Australia, data showed the country’s current account deficit narrowed to a seasonally adjusted A$5.67 billion in the first quarter of 2014 as mining exports grew strongly. Economists had expected a deficit of A$7.billion. Another report showed retail sales were up a seasonally adjusted 0.2% in April.

Earlier, as widely expected, the central bank opted to leave the cash rate on hold at 2.5% in June. Australian GDP data is due tomorrow.

In India too, the central bank maintained the status quo as it opted to keep its key interest rate unchanged. The Reserve Bank of India left the short-term lending rate or repo rate and the cash reserve ratio unchanged at 8% and 4% each, respectively. However, the apex bank cut the statutory liquidity ratio, or SLR – the deposits that banks must keep in government bonds - by 50 basis points, thus increasing the available credit.

Elsewhere in the region, data showed South Korea’s on-year consumer inflation increased in May, up 1.7% following a 1.5% gain in April.

Stocks on the Move

Nintendo was up 0.7% after the company released sales numbers for its Mario Kart 8 videogame.

Among the major gainers, shares of exporters were expectedly higher on the back of a weaker yen. Hitachi was up 3.3% while Mazda Motor advanced 2%. Mitsubishi added 1.2% and Kawasaki Heavy lifted 1.6%. Fujitsu was up 2%.

In Hong Kong, Tencent Holdings added 1.7% but Boyaa Interactive fell 2.2%.

Oil firms gained after a report that three oil and gas blocks had been allocated for bidding and that the National Energy Administration would issue up to five exploration licenses this month at the earliest. CNOOC climbed 2.1% while Sinopec was up 1%. China Oilfield Services gained 3.4%.

Casino stocks were down after data showed May gambling revenue grew 9.3% - their slowest pace in the last four months.

On the mainland, Inner Mongolia Yili Industrial Group was down almost 8% after a report said four of the company’s subsidiaries failed to make it to the list of qualified infant formula producers.

In Mumbai, SSLT was the top gainer, up 6.8%, followed by Tata Steel, up 4.2%, and Coal India, up 3.9%. Hero MotoCorp gained 2.7% while Hindalco and NTPC were up 2.6% and 2.5% each, respectively.

Retailers were not helped by the sales data in Australia and were mostly lower. Harvey Norman fell 3.4% while David Jones and Myer Holdings were down 1.5% and 3.7% each, respectively.

Telstra was down 0.6% after a broker downgrade.