beyondbrics

Chinese and Indian stocks gained modestly on Wednesday, but other Asian indices were subdued, as investors weighed up poor US data and the weakening dollar’s impact on exports.

The Bombay Sensex was among the strongest performers: rising 0.6 per cent to 18,217.44 in late trading, 13.6 per cent above its May low. Tech companies Infosys and Tata Consultancy led gains, as the rupee slipped, yet shares in Standard Chartered, which reported robust earnings, fell 3.9 per cent.

In China, the Shanghai composite was up 0.4 per cent to 2,638.52, and the Shenzhen composite rose 0.7 per cent to 1,086.99. The rises were seen as good news for Everbright Bank, which plans to complete an IPO this month.

“The recent rebound in the stock market also helps boost demand for the IPO, as investors get less pessimistic about the long-term prospects of the banking sector,” said Ye Yunyan of Galaxy Securities in Beijing. “Everbright Bank is healthier than AgBank by many standards and is selling much fewer shares,” he added.

In Hong Kong, the recovery in air travel helped Cathay Pacific shares up 3.9 per cent, as the Hang Seng index gained 0.4 per cent to 21,549.88.

In South Korea, the Kospi was down 0.1 per cent to 1,789.26, with Hyundai Motor shedding 1.3 per cent.

Taiwanese tech exporters also fell after recent gains. Yet the Taiex index rose 0.2 per cent overall to 7.972.66, after the government loosened restrictions on investing in Chinese equities and bonds.

In Indonesia, the Jakarta stock exchange rose 0.3 per cent to 2,983.25. Bank shares led gains, after the central bank decided, as expected, not to raise interest rates, attributing a rise in inflation in July to weather conditions.

“The market will start looking at fundamentals and realize that, yes, there is an inflationary threat but that is not significant enough to derail corporate earnings growth,” said Alex Wreksoremboko of Citigroup Securities Indonesia. “Aside from inflation, all the other parameters are positive for market sentiment.”

Wellian Wiranto, of HSBC in Singapore, commented: “We have two camps within Asia. Malaysia, India and Thailand have hiked, yet the bigger economies have pushed back. But Indonesia is more in-between but at the end of the day they will take domestic considerations more into account, partly also because Indonesia is not a very export-oriented economy.”

Foreign interest in Indonesia continues to grow, with government officials announcing that ArcelorMittal, the world’s largest steelmaker, is considering a $5bn investment in the country. South Korean steel giant Posco and China Investment Corporation have also recently shown interest in the country.

Toyota expressed its confidence in south-east Asian economies, as it raised its global income forecast for the year ending in March by nearly 10 per cent to $4bn, partly on the strength of demand in Thailand and Indonesia.

In Thailand, the SET index was trading up around 0.3 per cent, confirming its longest winning streak since February 2005. KCE Electronics led the gains after Q2 profits were 33 times higher than last year’s; the tech company’s stocks have risen 137 per cent in 2010.