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Asian markets conclude Thursday's trade on firm note

11 Jul 2013 Evaluate

Asian markets concluded the Thursday’s trade on firm note after US Federal Reserve Chairman Ben Bernanke reiterated the need for accommodative policy. China’s Shanghai Composite gained the most in nearly seven month on Fed moves and on expectations that the country's central government may take measures to stimulate the economy. The market rallied amid talks that the central government may introduce mild stimulus measures to revitalize the economy after China posted surprise falls in both exports and imports yesterday. On the economy front, Confidence of China businesses fell to a seven year low in the second quarter of this year against improved sentiment in major developed countries. An index measuring business optimism on China’s mainland dropped to 4% in the second quarter from 25% in the first quarter, according to Grant Thornton, a global auditing firm.

Japan’s Nikkei closed in positive territory as investors waited for the outcome of Bank of Japan’s policy meeting. The Bank of Japan is widely expected to hold monetary policy steady at the conclusion of its regular two-day meeting and could hike its view of the economy. Besides, Japan’s core machinery orders rose 10.5% in May from the previous month, beating median estimate of a 1.3% gain. Jakarta Composite too concluded the trade in positive turf on Fed minutes. Indonesia Central Bank surprised the market by hiking its benchmark policy rate by 50 basis points, twice as much as expected, to 6.50% as it stepped up its battle to stem outflows and combat inflation. The central bank also raised the overnight deposit facility rate, known as FASBI, by 50 basis points to 4.75%.

Meanwhile, the International Monetary Fund predicted that economic growth in Indonesia and across Southeast Asia will slow as central banks tighten monetary policies and the United States scales back its stimulus program. Average 2013 economic growth for five countries in Southeast Asia - Indonesia, Malaysia, the Philippines, Thailand, and Vietnam - is forecast at 5.6% this year, down from an April estimate of 5.9%.

Asian Indices

Last Trade

Change in Points

Change in %

Shanghai Composite

2072.99

64.86

3.23

Hang Seng

21437.49

532.93

2.55

Jakarta Composite

4604.22

125.58

2.80

KLSE Composite

1781.15

12.44

0.70

Nikkei 225

14472.58

55.98

0.39

Straits Times

3248.92

60.88

1.91

KOSPI Composite

1877.60

53.44

2.93

Taiwan Weighted

8179.54

167.85

2.10

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