Asian markets mostly fell and the euro came back under pressure yesterday Friday August 03 after the European Central Bank dashed traders’ hopes for strong policy actions to support troubled eurozone economies.
Downbeat earnings reports from two of Japan’s biggest electronics firms also weighed on the Tokyo stocks, with Sharp losing more than a quarter of its value in the morning session.
The Nikkei 225 index lost 98.07 points, or 1.13 per cent, to 8,555.11 while the Topix index of all first-section issues gave up 1.23 per cent, or 9.04 points, to 723.94.
“We’re seeing an unwinding of last week’s ‘risk-on rally’ after ECB president (Mario) Draghi pledged support for the euro at all costs,” an equity trader at a foreign brokerage told Dow Jones Newswires.
Chinese shares closed up after the country’s securities regulator said on Thursday it would cut transaction fees on equity trading by 20 per cent from September 1.
The Shanghai Composite Index gained 21.62 points, or 1.02 per cent, to 2,132.80. It edged up 0.19 per cent for the week.
The rebound may be short-lived as economic concerns will likely persist given a lack of fresh stimulus policies from Beijing, said analysts.
Seoul shed 1.11, or 20.72 points, to 1,848.68 and Sydney closed 1.12 per cent, or 48.0 points, lower at 4,221.5.
HONG KONG: STOCKS stocks fell 0.12 per cent yesterday as dealers were disappointed by the European Central Bank’s failure to unveil any concrete measures to support the euro.
The benchmark Hang Seng Index eased 24.02 points to end at 19,666.18. The index ended at just below its 200-day moving average, halting a three-day stay above that level this week. It has struggled to stay above this chart level since mid-May and its continued struggle points to further weakness ahead.
The losses were, however, much slimmer than earlier in the day as dealers took heart from strong gains on mainland markets.
SINGAPORE: STOCKS in Singapore and Indonesia posted modest gains in light trade yesterday while most others in Southeast Asia ended little changed or weaker as investors were wary of the eurozone debt crisis and cautious ahead of US non-farm payrolls data for July.
In Singapore, the benchmark Straits Times Index finished up 0.50 per cent, or 15.14 points, at 3,051.33, reversing a 0.49 per cent loss on Thursday. On the week, it was up 1.76 per cent, the region’s best performer.
Among the actives, Oversea-Chinese Banking fell 0.42 per cent to S$9.40 and DBS Group was 0.41 per cent higher at S$14.75.
KUALA LUMPUR: SHARE prices on Bursa Malaysia closed firmer bolstered by gains in selected heavyweights, dealers said.
Intermittent bargain hunting was noted for most parts of the day.
The underlying FTSE Bursa Malaysia KLCI (FBM KLCI) finished 1.59 points better at 1,635.04 after fluctuating between 1,627.2 and 1,635.77 points.
The local bourse traded bearish in the morning and only climbed up at the eleventh hour with gains noted in selected blue chips and index-linked counters such as Maybank, Maxis, DiGi and Petronas Dagangan.
In other markets:
* Taipei fell 0.69 per cent, or 50.45 points, to 7,217.51.
* Manila closed 0.14 per cent, or 7.49 points, lower at 5,285.91.
* Jakarta rose 0.16 per cent, or 6.70 points, to 4,099.81.
* Bangkok fell 0.30 per cent, or 3.60 points, to 1,197.53.
* Mumbai slipped 0.15 per cent, or 26.43 points, to 17,197.93.
VIETNAM: Vietnamese shares ended in the green today but liquidity shrank as both buyers and sellers were in high caution.
The benchmark VN Index rose 2.11 points or 0.51% to 418.21. Volume rose 10.42% to 24.2 million shares worth of VND384.4 billion. Put through trading contribute 2.5 million shares worth of VND55.54 billion. We saw 1 million KDC shares changed hands at VND37,900 in the put through deals.
The VN30 added 3.26 points or 0.66%, to 497.38. Amongst its 30 members, 13 gained, 9 lost and 8 unchanged.
On the Hanoi Stock Exchange, the HNX bucked trend, sledding 0.07 point or 0.01% to 68.91. Trading volume rose 4.5% to 27.4 million shares worth VND391.2 billion.
HNX30 rose 0.16 point or 0.12% to 130.23.
EUROPE: European equities surged yesterday, reversing all of the previous day’s pullback and resuming a week-long rally as investors judged the European Central Bank remains committed to bold action to fight the eurozone debt crisis.
Markets were also awaiting US jobs data that could fuel expectations of further stimulus from the Federal Reserve.
At 1051 GMT, the FTSEurofirst 300 index of top European shares was up 1.5 per cent at 1,071.02 points.
London’s benchmark FTSE 100 index jumped 1.39 per cent to 5,740.49 points approaching midday, as the banking sector led the gains.
Frankfurt’s DAX 30 climbed 2.06 per cent to 6,742.59 and in Paris the CAC 40 rallied 2.38 per cent to 3,309.29 points.
Madrid’s IBEX 35 index won 3.33 per cent and Milan’s FTSE-MIB surged 4.17 per cent.
AMERICA: A surge in hiring last month got a big welcome on Wall Street Friday.
The Dow Jones industrial average surged 217.29 points to close at 13,096.17, ending a four-day losing streak. It was the best day for the Dow since June 29.
Markets had been slumping all week after central banks in the U.S and Europe took no new action to shore up the economy, as investors had hoped.
The good economic news caused investors to sell low-risk assets like U.S. government debt. The selling drove prices down and yields up. The benchmark 10-year Treasury note was yielding 1.57 percent, up from 1.48 percent Thursday.
Oil prices also rose as investors became more optimistic about the economy. Benchmark crude shot up $4.27 to $91.40 on the New York Mercantile Exchange.
The broader Standard & Poor’s 500 index rose 25.99 points to 1,390.99, and the Nasdaq composite index added 58.13 points to 2,967.90.
At the end of a two-day policy meeting on Wednesday, the Fed said it would take action on the economy “as needed to promote a stronger economic recovery.” On Thursday, markets fell sharply after the European Central Bank didn’t announce specific plans to tackle the continent’s debt crisis, as many investors expected it would.
Several U.S. companies turned in strong earnings reports on Friday. Procter & Gamble, which makes Tide, Bounty, NyQuil and many other consumer products, reported a 45 percent surge in quarterly earnings, easily beating Wall Street’s forecasts. P&G’s stock rose $1.99 to $65.50.
Other stocks making big moves included:
— Knight Capital leapt 57 percent after the company obtained an emergency credit line, according to news reports. The trading firm was responsible for stock market disruptions on Wednesday which will cost it $440 million. The stock had fallen 75 percent over the previous two days. On Friday, the stock rose $1.47 to $4.05.
— LinkedIn shot up $15 to $108.51. The social media company reported that its second-quarter revenue increased faster than analysts had expected. LinkedIn also raised its full-year revenue forecast.
— Kraft Foods rose $1.57 to $40.51 after reporting a 5 percent jump in its second-quarter profit. Higher prices helped offset a drag from raw-materials costs and currency exchange rates.
— Zipcar plummeted $3.88 to $6.75. The stock reached an all-time low Friday after the car-sharing network reported lower-than-expected revenue in the second quarter and cut its annual revenue estimates.
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