Asia: Markets end mixed

Asian stock markets were mixed yesterday Tuesday July 24 after a sell-off the previous day, with Europe’s debt woes casting a shadow but relief provided by news of Chinese manufacturing activity hitting a five-month high.

Most bourses reversed earlier losses that were fuelled by renewed concerns that the weight of eurozone sovereign debt would force Spain to seek a full state bailout.

However, trade remained cautious after ratings agency Moody’s downgraded its outlook for Germany, delivering a stark warning that not even Europe’s largest and most pivotal economy was immune from the rolling crisis.

Tokyo stocks closed lower due to a strong yen and following a global sell-off on renewed eurozone sovereign debt concerns.

The Nikkei 225 Index was down 0.24 per cent, or 20.23 points, at 8,488.09, finishing below the 8,500-yen mark for the first time in six weeks. The broader Topix index of all first-section shares lost 0.41 per cent, or 2.95 points, to 717.67.

“What’s weighing on global markets the most is Europe,” said Hideyuki Ishiguro, supervisor at investment strategy firm at Okasan Securities.

Chinese shares closed up 0.24 per cent. The Shanghai Composite Index added 5.19 points to 2,146.59.

Seoul added 0.25 per cent, or 4.49 points, to 1,793.93 and Sydney climbed 0.10 per cent, or 4.3 points, to 4,133.2.

HONG KONG: STOCKS ended a choppy session at their lowest in a month yesterday, dragged down by a 4 per cent loss for CNOOC after the Chinese oil giant announced plans to acquire Canadian oil producer Nexen Inc for US$15.1 billion.
The benchmark Hang Seng Index closed 0.79 per cent, or 150.27 points, lower at 18,903.20.
Typhoon Vincente forced cancellation of morning trade, so turnover was reduced, heightening market volatility. Fragile sentiment was not improved by a preliminary survey showing a slight improvement in July manufacturing in China.

SINGAPORE: STOCKS in Singapore, Thailand and the Philippines posted small gains in light trading yesterday, led higher by banking shares, but the broader sentiment remained weak as gloomy German factory data overshadowed signs of an improvement in China.
In Singapore, the Straits Times Index finished up 0.53 per cent, or 15.95 points, to 2,998.44, regaining early lost ground.
Among the actives, Singapore Telecom gained 0.29 per cent to S$3.46 and Keppel Corp added 1.18 per cent to S$11.19.
Other markets in the region ended lower.

KUALA LUMPUR:   SHARE prices on Bursa Malaysia closed lower yesterday on continued selling amid a lack of any major catalyst to move up the market, dealers said.
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) shed 0.22 per cent to 1,632.57. The key index, which opened at 1,638.05, hovered between 1,629.18 and 1,639.71 throughout the day.
Dealers said the selling came on investor concern over the ongoing eurozone debt crisis resurfacing amid indications that Spain might require a full bailout.
The selling remained mild compared with regional markets due to FBM KLCI’s defensive traits and local fund support ahead of the IHH Healthcare listing today, Hong Leong Investment Bank Research said.

In other markets:

* Taipei fell 0.29 per cent, or 20.38 points, to 7,008.35.

* Manila closed 0.40 per cent, or 20.34 points, higher at 5,159.74.

* Jakarta fell 0.44 per cent, or 17.68 points, to 3,992.11.

* Bangkok rose 0.21 per cent, or 2.53 points, to 1,187.64.

* Mumbai rose 0.24 per cent or 40.73 points to 16,918.08.

VIETNAM: Vietnamese shares tumbled today as investors sold shares on massive fashion to cut minimize risks as the index broke down the support area.
The benchmark VN Index fell for a third straight session, losing 6.36 points or 1.51% to 415.63. Volume fell further by 11.5% to 44.8 million shares worth of VND659.4 billion. Put through trading contributed 3.4 million shares worth of VND60.78 billion.
The market breadth remained negative on the primary bourse where 48 stocks advanced, 222 declined, 39 closed unchanged.
The VN30 lost 4.52 points or 0.91%, to 491.34.  Amongst its 30 members, 1 gained, 25 lost and 4 unchanged.
On the Hanoi Stock Exchange, the HNX lost 1.62 points or 2.27% to 69.84. Trading volume rose 18% to 51.4 million shares worth VND478.9 billion.
The market breadth was negative where 54 rallied, 187 declined, 55 closed unmoved and the rest unchanged.
HNX30 fell 5.06 points or 3.69% to 132.31.

EUROPE:  European shares extended losses yesterday as poor manufacturing surveys and concerns Spain may need a full bailout weighed.
Mike McCudden, head of derivatives at data provider Interactive Investor, said: “At the moment all eyes are on the eurozone and as it continues to lurch from one catastrophe to the next expect any bounce to be short lived.
At 1150 GMT, the FTSEurofirst 300 index of top European shares was 0.2 per cent lower at 1,022.91 points. The eurozone’s blue-chip Euro STOXX 50 index fell 0.6 per cent to 2,167.31 points.
London’s FTSE 100 dipped 0.06 per cent to stand at 5,530.59 points at mid-day. Frankfurt’s DAX 30 fell 0.26 per cent to 6,402.61 and Paris’ CAC 40 lost 0.18 per cent to 3,096.08.
Madrid was down 2.43 per cent and Milan slid 1.19 per cent.

AMERICA:  A parade of grim news, from weak corporate earnings to a pullback at U.S. factories to spreading fault lines in Europe’s debt crisis, sent investors fleeing stocks for a third straight day on Tuesday.

The Dow Jones industrial average fell 104.14 points, or 0.8 percent, to 12,617.32. It was the third triple-digit point loss in a row for the blue chip index. The last time that happened was September, when fears were rife that the U.S. was on the brink of another recession.

Lower earnings forecasts from corporate bellwethers like United Parcel Service, combined with a weak report on manufacturing, fed fears of more disappointing results from Corporate America in the coming days.

Soon after he spoke came a bit of confirmation from a stock market star. After the close of trading, Apple reported the smallest increases in revenue and income in years, badly missing analysts’ expectations. The stock fell $29.76, or 5 percent, to $571.19 in extended trading.

It was a fitting end to a bad day as investors around the world dumped stocks and fled to the relative safety of U.S. government debt. The yield on the benchmark 10-year Treasury note fell to another record low and the dollar hit a two-year high against the euro.

Stocks fell from the start of trading following news that UPS had cut its earnings forecast 4 percent for all of 2012 as global trade slows. UPS’s stock fell $3.61, or 5 percent, to $74.34.

Also weighing on stocks, Spain’s borrowing costs spiked as investors worried that country could become the latest in Europe to ask for a financial lifeline. Spain’s banks have already received help from international lenders.

The broader Standard & Poor’s 500 fell 12.21 points to 1,338.31. The Nasdaq composite was off 27.16 points to 2,862.99.

Early in the day, DuPont reported that its net income fell 3 percent for the second quarter on slower business in Europe and Asia. The huge chemical maker also reported revenue that fell short of Wall Street’s expectations. DuPont’s stock lost 97 cents, or 2 percent, to $47.74.

Adding to the jitters was a report from Federal Reserve Bank of Richmond indicated that manufacturing in the central-Atlantic region is contracting. That followed reports of pullbacks in New York and Philadelphia.

As they dump stocks, investors have been piling into U.S. government bonds. On Tuesday, the yield on the 10-year Treasury note fell to 1.40 percent, matching the record low it reached Monday.

Investors have also been selling the euro. The euro fell to $1.20 on Tuesday, a two-year low against the dollar.

In corporate news, AT&T and Whirlpool both fell short of analyst estimates of earnings and revenue. AT&T fell 75 cents, or 2 percent, to $34.63. Whirlpool, the world’s biggest appliance maker, dropped $5.06, or 7.5 percent, to $62.25.

So far this earnings season, nearly seven of ten companies that have reported earnings have beaten estimates, slightly higher than is usual, according to S&P Capital IQ, a research firm. But analysts had been lowering those expectations for months so the feat of surpassing them isn’t so impressive.

Some other companies in the news:

— Cisco Systems fell the most of the 30 stocks in the Dow, or 6 percent, after the network equipment maker announced its latest round of staff cuts. Cisco dropped 95 cents to $15.12.

— DeVry plunged $6.76, or 25 percent, to $20.80, the biggest drop in the S&P 500 index. The for-profit education company said enrollment is falling, forcing it to cut 570 jobs. The company also projected that its profit for the latest quarter will come in well short of analyst estimates.

Benchmark Currency Rates

	USD	EUR	JPY	GBP	CHF	CAD	AUD	HKD
USD	–	1.2065	0.0128	1.5497	1.0046	0.9779	1.0198	0.1289
EUR	0.8288	–	0.0106	1.2845	0.8326	0.8104	0.8452	0.1068
JPY	78.1200	94.2700	–	121.0840	78.4890	76.4010	79.6650	10.0720
GBP	0.6453	0.7785	0.0083	–	0.6482	0.6310	0.6579	0.0832
CHF	0.9953	1.2010	0.0127	1.5428	–	0.9733	1.0151	0.1283
CAD	1.0226	1.2339	0.0131	1.5850	1.0273	–	1.0430	0.1318
AUD	0.9806	1.1831	0.0125	1.5198	0.9850	0.9588	–	0.1264
HKD	7.7578	9.3597	0.0993	12.0225	7.7934	7.5860	7.9114	–

 

Category: FinanceAsia