U.S. Capital Goods Orders Put Asian Markets in Positive Territory
Asian markets closed higher Monday. In Hong Kong the Hang Seng Index rose 1% to 22,341 and in China the Shanghai Composite Index advanced 1.4% to 2,628. Japan's Nikkei 225 Index gained 1.4% to end the day at 9,603.
Asian investors reveled in new figures released by the U.S. Commerce Department saying capital goods orders jumped 4.1% in August after plummeting in July. The August numbers beat estimates that hovered around the 3% mark, boosting confidence in the world's biggest economy. Orders for tools, equipment, factory parts and commodities are rolling in, restoring faith in a U.S. recovery, which in turn supports economies around the world.
In Hong Kong, shares in raw materials producers soared with Jiangxi Copper rallying 4.3% and Aluminum Corp. of China surging 2.5%. Gold producers also gained after the price of bullion hit a new record high of $1,300 per ounce. Zijin Mining gained 2.7% and Real Gold Mining advanced 2.4%.
Hong Kong-listed companies producing retail items climbed with Yue Yuen, maker of trendy footwear for athletic apparel giants including Nike, Puma and Adidas climbing 3.1% and Foxconn, the world's biggest mobile phone maker leaping 4%. Esprit advanced 1.9% and Li & Fung added 0.4%.
The Hang Seng's biggest gains were seen in the real estate sector where Sino Land rocketed up 4.8%, New World Development and Henderson Land both surged 2.9% and Cheung Kong rose 2.2%.
Hong Kong car makers motored ahead with Geely, the new owner of the Volvo brand surging 9.1% and Guangzhou Automobile Group rising 3.1%.
Chinese raw materials producers also gained in Shanghai. Yunnan Copper rose 3.3%, Aluminum Corp. of China advanced 2.8%, Baoshan Iron & Steel and Maanshan Iron & Steel both crept up 0.9%. Among Chinese gold producers, Shandong Gold skyrocketed 5%, Zhongjin Gold climbed 4.3% and Zijin Mining added 2.6%. Zijin also produces other metals and today Bloomberg reports that the company has experienced yet another accident, this one at a tin mine, where four people died after a dam collapsed.
Dongfang Electric, a company making generators and motors hit the 10% daily limit today and China First Heavy Industries, which specializes in equipment used in the mining industry, racked up a 1.7% gain.
Chinese developers scored big gains despite a government crackdown on land hoarding. According to the Wall Street Journal, companies must begin developing land they've acquired at auction within one year, or they'll be banned from bidding in future auctions. Bloomberg reports that 2,815 cases of undeveloped land have been uncovered, and that the government has reclaimed some of these plots. New rules will also require that at least 70% of auctioned land must be designated for building subsidized public housing and smaller, more affordable homes. Beijing is hoping these new laws will put a damper on the flood of new luxury residences that are out of reach for most folks and which are propping up housing prices. Today Poly Real Estate shot up 4.5%, Gemdale spiked 3.7% and China Vanke added 1.5%.
In Japan, Komatsu, a construction equipment company jumped 3.2% and Furukawa Electric, a manufacturer of metal products like fiber optical cables and electronic parts rose 2.5%. Minebea, a ball bearing firm climbed 2.6% and Okuma, a machine tool maker also gained 2.6%.
Japanese exporters benefited from today's bright news out of the U.S., which sent Canon rising 2.5%, Casio Computer up 1.5% and Sony up 1.4%. Carmakers leaped ahead with Isuzu rallying 3.4%, Honda gaining 2.9%, Nissan advancing 2.4% and Mazda adding 2%. Toyota rose 1.1%.
But Japanese consumer lenders put a damper on investor glee after reports that Takefuji plans to file for bankruptcy protection. While Takefuji shares were not traded today, other lenders slumped with Promise plunging 11% and Acom tumbling 10%. Shinsei Bank gave up 6.6% and Sumitomo Trust & Banking fell 3.4%.