Asian markets were mixed yesterday Tuesday October 09, with concerns over Europe’s debt crisis overshadowing strong gains in Shanghai and Hong Kong fuelled by stimulus hopes.
With the corporate earnings season coming up, dealers were taking a cautious approach, while a cut in growth forecasts for the regional and world economy by the International Monetary Fund also weighed on markets.
Tokyo stocks fell. The benchmark Nikkei 225 Index closed down 93.71 points, or 1.06 per cent, at 8,769.59, while the broader Topix index of all first-section issues lost 1.28 per cent, or 9.45 points, to 727.68.
“Friday’s US payroll figures were certainly a positive surprise, but still not that great when put into a broader context. They still don’t afford much of a sense of security,” said Naoki Fujiwara, fund manager at Shinkin Asset Management in Tokyo.
“Trepidation ahead of… earnings results, and the IMF’s cut of its global economic growth forecast, are hurting the market,” he said.
Chinese shares closed up 1.97 per cent. The benchmark Shanghai Composite Index jumped 40.81 points to 2,115.23.
“Expectations are heightened that more stimulus measures will be introduced, so we expect to see a short-term rebound,” Shenzhen Zhongzheng Investment Consulting analyst Zhang Suoqing told Dow Jones Newswires.
Sydney rose 0.52 per cent, or 23.4 points, to close at 4,505.3 . Seoul eased 0.14 per cent, or 2.85 points, to 1,979.04.
HONG KONG: SHARES rose yesterday, with dealers following a strong rally in Chinese markets fuelled by hopes for new monetary easing measures.
The benchmark Hang Seng Index climbed 112.72 points, or 0.54 per cent, to 20,937.28.
“Monday was a speed bump and we’re now back on track,” said Jackson Wong, an investment manager at Tanrich Securities.
“Investors’ confidence towards China is recovering gradually, with the removal of political uncertainty and the possibility that the economic data out of China this month and the next may signal bottoming-out of the economy.”
SINGAPORE: STOCKS in Singapore, Thailand and the Philippines edged lower yesterday amid broad-based sell-off in regional large caps as concerns about global growth dented investor sentiment.
A warning about the global growth from the International Monetary Fund weighed on stocks globally.
Singapore’s benchmark Straits Times Index fell for a second session, ending at a one-week closing low of 3,065.91, down 0.35 per cent, or 10.74 points.
Among the active stocks, Singapore Telecom was unchanged at S$3.19 and Singapore Airlines eased 0.85 per cent to S$10.56.
KUALA LUMPUR: SHARE prices on Bursa Malaysia closed on a positive note yesterday, helped by gains in selected blue chips despite mixed trading on regional cash markets, dealers said.
The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) gained 3.1 points to 1,663.32 after hovering between 1,658.04 and 1,664.98 throughout the day.
A dealer said the FBM KLCI was also supported by gains in oil stocks such as SapuraKencana Petroleum and Petronas Chemicals Group, which rose one sen each to RM2.42 and RM6.42 respectively.
The Finance Index improved 32.33 points to 14,754.79, the Industrial Index rose 13.81 points to 2,859.3. The Plantation Index, however, fell 1.91 points to 8,169.42.
The FBM Mid 70 Index increased 34.21 points to 12,148.8 and the FBM Emas Index added 25.92 points to 11,289.05, while the FBM ACE Index dipped 45.12 points to 4,226.98. Gainers beat losers by 424 to 296, while 335 counters were unchanged, 592 untraded and 19 others suspended.
Turnover advanced to 1.10 billion shares worth RM1.60 billion.
In other markets:
* Taipei fell 0.31 per cent, or 23.88 points, to 7,592.01.
* Manila closed 0.72 per cent lower, shedding 39.23 points to 5,394.90.
* Jakarta rose 0.28 per cent, or 12.02 points, to 4,280.25.
* Bangkok slipped 0.94 per cent, or 12.23 points, to 1,292.48.
* Mumbai rose 0.45 per cent or 84.38 points, to 18,793.36.
VIETNAM: Vietnamese shares closed higher today as investors bought shares ahead of Q3 earnings season and hopes for more macro economy stability.
The benchmark VN Index gained 0.22 point or 0.06% to 393.67. Volume rose 8.9% to 38.7 million shares worth of VND599.5 billion.
Put through trading contributed 4.9 million shares worth of VND173.42 billion. We saw 1.1 million MBB shares changed hands at the price of VND13,200 each and 1 million VIC shares traded at floor price of VND77,000 each.
Today’s market breadth remained positive on the primary bourse where 121 stocks advanced, 83 declined, 81 closed unchanged.
The VN30 bucked trend, losing 0.17 point or 0.04%, to 460.09. Among its 30 members 11 gained, 15 lost the ground and 4 unchanged.
On the Hanoi Stock Exchange, the HNX gained 0.22 point or 0.4% to 55.43.
Trading volume fell 2.9% to 32.5 million shares worth VND232.7 billion.
The market breadth was positive where 106 rallied, 86 declined, 75 closed unmoved, the rest untraded.
The HNX30 added 0.06 point or 0.06% to 103.42. Of its 30 members, 13 gained, 10 unchanged, 7 lost.
EUROPE: European shares edged lower yesterday on concerns about company earnings and debt problems in countries including Spain and Greece, although analysts said the overall market trend remained positive.
At 1138 GMT, the index was down 0.1 per cent at 1,100.52 points.
In early trading, Britain’s FTSE 100 fell 0.2 per cent to 5,827.72. Germany’s DAX lost 0.4 per cent to 7,259.02 and Paris’ CAC-40 shed 0.1 per cent at 3,403.30.
“There is an element of caution. The problem with Europe has not been solved by the politicians and the market is already positioned for earnings to be lacklustre,” said Geneva-based Lorne Baring, managing director of B Capital Wealth Management.
AMERICA: Stocks slumped Tuesday on Wall Street after the International Monetary Fund predicted weaker world economic growth and as investors waited for what they expected to be lower corporate earnings.
The Dow Jones industrial average declined 110.12 points, or 0.8 percent, to 13,473.53. The Standard & Poor’s 500 index dropped 14.40 points, a hair under 1 percent, to 1,441.48.
The Nasdaq composite index lost 47.33 points, or 1.5 percent, to 3,065.02.
The slide came on the five-year anniversary of record high closes for the Dow and S&P 500. The Dow is about 700 points off its all-time high, 14,164.53. It would take a 5 percent rally from here to reach the record.
Investors were discouraged by an International Monetary Fund report released overnight that said the global economy was weakening and the downturn afflicting developing nations has begun to spread.
The weak forecast came one day after the World Bank cut its estimate for growth in China, the world’s second-largest economy, and for developing countries across Asia.
The IMF forecasts that the world economy will expand 3.3 percent this year, down from the estimate of 3.5 percent growth it issued in July. Its forecast for growth in 2013 is 3.6 percent, down from 4.1 percent in April.
After the market closed, Alcoa, the aluminum company, said it earned 3 cents per share in the most recent quarter after accounting for special charges. Wall Street was expecting break-even.
Alcoa stock ended the regular trading day up a penny at $9.13 and gained an additional 7 cents in the first half-hour after the earnings report. Alcoa is the first of the 30 stocks in the Dow to report earnings.
Overall, analysts expect earnings at S&P 500 companies to be down compared with last year, the first decline in almost three years.
Talley Leger, investment strategist at Macro Vision Research, noted that the IMF report came while Greek protests erupted again in Athens over budget-cutting measures and after a downgrade of Cyprus’ credit rating on Monday.
“It’s all negative headlines today,” Leger said. “There’s a lot of European fears.”
Leger added he wouldn’t be selling stocks given that Federal Reserve and other central banks are trying to stimulate economies around the world. The Fed has committed to buying $40 billion in mortgage bonds per month until the economy heals.
“With markets so firmly supported by central bankers, I don’t want to be defensive,” Leger said. “It’s a gift” to investors.
Earlier Tuesday, the National Federation of Independent Business reported that business owners became increasingly pessimistic during September because of the weak hiring environment and poor sales.
Nonetheless, the number of owners who expect business conditions to improve in six months gained four percentage points. Those believing it’s a good time to expand rose three percentage points.
Only energy stocks kept the market from closing even lower. The price of crude oil jumped more than $3 per barrel to $92.39 because of supply concerns in the Middle East and the North Sea.
Energy stocks were the only major group in the S&P 500 to finish higher, and just barely. So-called consumer discretionary stocks, including companies like hotels and luxury stores that depend on a healthy economy, fell 1.5 percent as a group.
Among stocks making big moves, Edwards Lifesciences dropped $22.81 to $84.60 after the company reported revenue that fell well short of analyst forecasts. Sales of its Sapien heart valves were weaker than the company had expected.
Stanley Black & Decker, the tool maker, fell $1.99 to $72.24 after saying it would sell its hardware and home-improvement business to Spectrum Brands Holdings for $1.4 billion in cash.
Spectrum Brands’ stock jumped $4.88, or 11.9 percent, to $46.04. The Wisconsin company owns the Rayovac, Remington and Toastmaster brands.
Eli Lilly, the drugmaker, rose $1.03, or 2 percent, to $51.81 after two studies found that its experimental Alzheimer’s drug may modestly slow mental decline.
The yield on the 10-year Treasury note fell to 1.72 percent from 1.74 percent late Friday. U.S. government bond trading was closed Monday for the Columbus Day holiday.
European markets also fell. Benchmark indexes fell 0.8 percent in Germany and 0.5 percent Britain. France’s stock market index fell 0.7 percent.
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