Global Markets Wrap

Fri, 14 Nov 2008 09:29


Bargain hunters have returned to the mix, sending Asian markets higher. Sentiment across Asia was bolstered by the big turnaround on Wall Street overnight. Investors are snapping up shares which are trading near the cheapest valuations on record.

In Japan, the yen has weakened against the euro and the dollar but still remains quite volatile. There is a reversal in exporters such as Honda and Sony which have been hard hit. Investors are also buying Konica Minolta and Isuzu which are trading at very low PE's.

In China, agricultural, machinery and oil stocks are trading higher after government announced details on how the $586-billion stimulus package will be spent. It said that the money will be paid out to the relevant sectors by the end of this month.

In Australia, weakness crept into the banking sector this morning but resources did well on the back of a rebound in oil and metal prices. BHP, which is trading 5-times less than estimated earnings, is up 5%.

After three days of losses, US stocks bounced back closing sharply higher in yesterday's session. The desire to buy stocks at cheap prices offset worries about a sharper economic and consumer downturn. Some on the floor saw the Dow's recovery as technically significant. Many are asking if the previous day's losses were a sign of the bottom. Banks and tech stocks lead the gains overnight. But there was some pressure after new jobless claims came in at half a million for the first time in seven years. Meanwhile, Walmart came out with results yesterday beating earnings estimates. Today the US will be releasing retail sales which will give the markets a clearer indication of what consumers are spending their money on.