Asian markets fell yesterday Friday July 6 as apparently coordinated action by Europe and China to stimulate growth failed to reassure wary investors ahead of US jobs data due later in the day.
The slide came as International Monetary Fund chief Christine Lagarde warned the global economy was slowing and said the situation could get worse because Europe was not doing enough to fix its debt crisis.
Tokyo stocks closed lower, tracking a sluggish performance on Wall Street overnight. The benchmark Nikkei 225 Index lost 0.65 per cent, or 59.05 points, to 9,020.75.
“While the easing measures are welcome, they came in largely within expectations, and did not impress markets,” said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.
Chinese shares ended higher with property stocks leading the rise. The Shanghai Composite Index gained 1.01 per cent, or 22.23 points, to 2,223.58.
“Gains in property developers, which are set to benefit from the cut, offset declines in banking stocks due to worries the cut may hurt their earnings,” Zhang Yanbing, an analyst at Zheshang Securities, said.
Seoul declined 0.92 per cent, or 17.29 points, to 1,858.20 and Sydney ended down 0.27 per cent, or 11.40 points, at 4,157.8.
HONG KONG: STOCKS closed flat yesterday as a surprise interest rate cut by China dealt a blow to Chinese bank shares and investors remained cautious ahead of US jobs data due later in the day.
The benchmark Hang Seng Index edged down 0.04 per cent, slipping 8.49 points to close at 19,800.64. The index gained 1.9 per cent over the week.
SINGAPORE: STOCKS edged up yesterday, posting their biggest weekly gain since December.
The benchmark Straits Times Index closed up 0.24 per cent, or 7.08 points, to 2,978.55, higher for the eighth straight session. It gained 3.5 per cent this week, the best performer in Southeast Asia.
The market was lifted by a 2.8 per cent gain in property developer CapitaLand Ltd and a 6.4 per cent rise in Yanlord Land Group Ltd amid strong trading volume.
KUALA LUMPUR: SHARE prices on Bursa Malaysia closed higher yesterday, driven by gains in selected counters, dealers said.
The FTSE Bursa Malaysia KLCI rose by 6.12 points to close at 1,620.55. The market bellwether had opened 1.60 points higher at 1,616.03. Asian markets, however, fell as the European Central Bank’s decision yesterday to cut interest rate to a record low failed to excite investors.
Meanwhile, a US jobs data announcement yesterday would provide clues on the extent of the damage from the eurozone debt crisis to its economy.
The Finance Index surged 54.29 points to 14,437.72, Plantation Index gained 60.38 points to 8,757.17 and the Industrial Index rose 10.52 points to 2,871.96. The FBM Emas rose 45.39 points to 11,086.25, FBM ACE Index added 57.67 points to 4,399.17 and the FBM 70 Index rose 65.56 points to 12,183.05.
In other markets:
* Bangkok fell 0.14 per cent or 1.72 points to 1,200.08.
* Taipei fell 19.19 points, or 0.26 per cent, to 7,368.59.
* Jakarta closed down 14.64 points, or 0.4 per cent, at 4,055.197.
* Manila slipped 7.30 points, or 0.14 per cent, to 5,362.68.
* Mumbai edged down 0.10 per cent, or 17.55 points, to 17,521.12.
VIETNAM: Vietnamese stocks ended the week in a mixed note as investors were mostly still in the wait-and-see mood.
The benchmark VN Index added 1.61 points or 0.39% to 415.44. Volume rose by 37% to 43.3 million shares worth of VND629.4 billion. Put through trading contributed 7.6 million shares worth of VND205.1 billion.
The VN30 rose 1.82 points or 0.37%, to 490.64. Amongst its 30 members, 18 stock rallied, 6 lost and 6 unchanged.
On the Hanoi Stock Exchange, the HNX bucked trend to close down, losing 0.14 point or 0.2% to 69.67. Trading volume fell 10.9% to 35.1 million shares worth VND293.2 billion.
EUROPE: European shares fell yesterday, signalling a five-week rally was likely coming to an end as hopes waned that a summit deal to tackle the eurozone crisis would come into effect soon or central banks offer more stimulus measures.
The pan-European FTSEurofirst 300 index was down 0.2 per cent at 1,042.52 points by 1032. The eurozone Euro STOXX 50 index was 0.5 per cent lower at 2,273.99, extending a pullback.
London’s benchmark FTSE 100 slid 0.04 per cent to 5,690.10 points in late morning trade, Frankfurt’s DAX 30 shed 0.24 per cent to 6,519.30 points and in Paris the CAC 40 lost 0.31 per cent to 3,219.35 points.
“Now that resistances are reached, what we should see is sharp corrections and new bounces,” Valerie Gastaldy, head of Paris-based technical analysis firm Day-By-Day said in a note.
AMERICA: Investors abandoned stocks Friday after the U.S. government reported that only 80,000 jobs were created in June, the third straight month of weak hiring. The Dow Jones industrial average fell 124.20 points to close at 12,772.47. The loss wiped out the Dow’s gain for the week.
Of the 30 stocks in the Dow average, only five rose, including McDonald’s and AT&T. The world’s largest producer of aluminum, Alcoa, and Caterpillar, the construction equipment maker, were among the hardest-hit Dow stocks with declines of about 3 percent each. Materials and industrial companies are the most likely to suffer if the economy weakens.
The new signs of economic sluggishness around the world sent commodities prices lower. Crude oil dropped $2.77, or 3 percent, to $84.45 a barrel. The U.S. is the world’s biggest oil consumer, and the prospect of lower demand pushed down prices.
Energy stocks followed the price of oil lower. Peabody Energy fell $1.27, or close to 5 percent, to $24.86, while Alpha Natural Resources declined 60 cents, or 6.5 percent, to $8.67.
In other trading on Wall Street, the Standard & Poor’s 500 slid 12.90 points, or 0.9 percent, to 1,354.68 and the Nasdaq composite fell 38.79 points, or 1.3 percent, to 2,937.33.
One of the reasons stocks fell is that though the jobs report was weak, the country isn’t heading into a recession. That suggests the Federal Reserve is less likely to take more action to stimulate the economy, according to Brian Jacobsen, chief portfolio strategist at Wells Fargo Advantage Funds.
The yield on the 10-year Spanish government bond rose 0.22 percentage point to 6.96 percent earlier in the day. That’s a very high level and could eventually force Spain to seek more financial support from its neighbors in Europe.
European stock indexes slid. Germany’s DAX and France’s CAC-40 each lost 1.9 percent. Spain’s benchmark index slumped 3 percent.
Other Wall Street stocks making big moves included:
• Navistar International. The truck maker’s stock fell $4.37, or over 15 percent, to $24.42 on investor worries that the heavy engine and truck maker will have to incur additional costs to get a crucial new engine approved by federal regulators.
• Sequenom Inc. The stock fell 8 cents, or 2 percent, to $3.99 after a California court refused to block a competitor from selling a similar product to Sequenom’s Down syndrome test for pregnant women.
• Informatica Corp. The business software maker fell $12, or 28 percent, to $31.36 after warning that its second-quarter results didn’t live up to the projections of its management or analysts.
Benchmark Currency Rates (Bloomberg)