Australian and Asian Market Report 25th February 2011

Asian markets are trading higher this morning, as crude oil prices retreated from multiyear highs, amid easing concern about supply disruptions. In Japan, exporters, Nissan Motor, Sony and Sharp, paced gains, after the yen weakened, improving the outlook for overseas earnings, while Toyota Motor traded higher, as Credit Suisse upgraded the stock to “Outperform”. In Hong Kong, AIA Group gained values, after the company revealed that its full-year profit rose 54% to $2.7 billion, while Hopewell Holdings traded in positive territory, as the company stated that its net income for the six months ended 31 December was HK$1.73 billion. In South Korea, Korean Air Lines paced gains, as crude oil prices fell. Nikkei 225 index is trading 0.5% higher, at 10,508.8. Hang Seng index is up 1.6% at 22,961.6, while the Kospi index is trading 0.6% higher at 1,962.3.

US markets finished mostly lower yesterday, amid concerns over surge in crude oil price and higher-than-expected fall in new home sales in the US. Newmont Mining fell 7.4%, after it forecasted that its gold production would fall this year. Among retailers, Sears Holdings tumbled 5.5%, after it reported a 13% drop in its fourth-quarter earnings. General Motors slid 4.5%, as a surge in crude oil price dimmed the outlook for truck sales. Oil related stocks, Tesoro, Sunoco and Valero Energy, dropped between 5.4% and 3.4%, as crude retreated, on assurances from the US, Saudi Arabia and the International Energy Agency that they could compensate for any disruption of Libyan shipments. However, Priceline.com rose 8.5%, after reporting better-than-expected quarterly profit. DJIA retreated 0.3%, to 12,068.5. NASDAQ was up 0.6%, at 2,737.9. S&P 500 index closed 0.1% lower, at 1,306.1.

Other European markets finished lower yesterday, after Libya suspended almost two thirds of its oil production, which drove crude oil price to its highest in 30 months, fuelling concerns about inflation and economic growth. BMW and Daimler led the automakers down, retreating 2.2% and 1.6%, respectively. Porsche sank 11%, after it indicated that its planned merger with Volkswagen would probably be delayed into next year. Among the insurers, Allianz lost 2.7%, after it reported higher-than-expected full-year earnings but posted a low increase in its dividend, while Aegon fell 1.0%, after it announced that it would raise €1 billion in a share issue to repay state aid. Henkel tumbled 3.5%, after it reported fourth-quarter profit that missed market estimates. RWE plunged 5.2%, after the company stated that its profit might fall about 30% this year. FTSEurofirst 300 index declined 0.6% to 1,145.6. German DAX Xetra 30 fell 0.9% to 7,130.5. French CAC-40 lost 0.1% to close at 4,009.6.