Asian shares edged higher yesterday Monday July 16 on the back of a strong Wall Street rally, but Chinese stocks plunged to a three-year low after growth in the world’s second-largest economy slowed.
Chinese shares dropped 1.74 per cent on concerns slowing economic growth could see company profits fall, dealers said. The Shanghai Composite Index slumped 37.94 points to 2,147.96, its lowest close since March 2009.
“Sentiment is severely battered by a string of negative news,” Zhang Gang, an analyst at Central China Securities, told Dow Jones Newswires, citing earnings warnings from some blue-chip companies.
But elsewhere, stocks were lifted after US markets broke a six-day losing streak on Friday. The Dow closed up 1.62 per cent, the S&P 500 rose 1.65 per cent and the tech-rich Nasdaq 1.48 per cent.
Sydney finished 0.56 per cent, or 22.9 points, higher at 4,105.1, with resource stocks leading the way.
Traders were also looking to US Congressional testimony from Federal Reserve chairman Ben Bernanke today and tomorrow for any hint on a third round of quantitative easing, DBS Group Research said in a report.
HONG KONG: STOCKS closed slightly higher yesterday, with gains limited by sharp falls on markets in mainland China, hit by a fresh slew of profit warnings reflecting the impact of a slowing economy.
The benchmark Hang Seng Index climbed 0.15 per cent, or 28.71 points, to 19,121.34.
SINGAPORE: SOUTHEAST Asian stock markets extended gains yesterday but trading volumes were low as investors waited for a US Federal Reserve meeting.
Regional analysts said investors cautiously bought into equities ahead of Fed chairman Ben Bernanke’s semi-annual testimony to the US Congress on the economy set for today and tomorrow.
In Singapore, the benchmark Straits Times Index closed up 0.11 per cent, or 3.19 points, at 2,998.75, a 21/2-month high.
KUALA LUMPUR: SHARE prices closed on a bullish note yesterday with the benchmark FTSE Bursa Malaysia KLCI finishing at an all-time high of 1,635.96, up 0.58 per cent or 9.58 points, buoyed by buying interest in selected finance and utility blue chips, dealers said.
The index’s previous all-time high was recorded on July 11 at 1,629.45.
A technical chartist, Stephen Soo, said buying interest in finance and utility counters emerged as investors sought stocks that gave good dividend returns.
He said bullish regional bourses as well as gains on Wall Street on Friday helped to lift the local bourse. “The market also reacted positively to China’s commitment to do more to stimulate its economy.”
Advancers outpaced decliners 476 to 298 while 328 counters closed unchanged, 476 untraded and 13 others were suspended.
Total volume fell to 1.112 billion shares, valued at RM1.509 billion, from 1.29 billion shares valued at RM1.616 billion on Friday.
In other markets:
* Seoul was up 0.27 per cent, or 4.90 points, at 1,817.79.
* Taipei fell 0.20 per cent, or 14.23 points, to 7,090.04.
* Jakarta rose 0.69 per cent, or 27.79 points, to 4,047.47.
* Bangkok rose 0.33 per cent, or 3.96 points, to 1,214.25.
* Manila rose 1.60 per cent, or 83.47 points, to 5,277.99.
* Mumbai fell 0.64 per cent, or 110.39 points, to 17,103.31.
Tokyo was closed for a public holiday.
VIETNAM: Vietnamese shares kicked off the new week in the red as traders sold shares to take quick profit after recent rally when the index failed to test 418 resistance.
The benchmark VN Index lost 3 points or 0.72% to 413.98. Volume fell 25.13% to 41.7 million shares worth of VND560.6 billion. Put through trading contributed 2.6 million shares worth of VND60.35 billion.
The VN30 lost 3.73 points or 0.76%, to 488.63. Amongst its 30 members, 3 gained, 24 lost and 3 unchanged.
On the Hanoi Stock Exchange, the HNX lost 0.79 point or 1.12% to 69.78. Trading volume fell 39.53% to 34.5 million shares worth VND304.6 billion.
HNX30 lost 3.1 points or 2.3% to 131.43.
EUROPE: Europe’s main stock markets made a downbeat start to the week yesterday when investors took profits, awaited more US earnings and economic data, and dwelled on weak Chinese growth figures, dealers said.
In late morning deals, London’s FTSE 100 benchmark index fell 0.28 per cent to 5,650.23 points, Frankfurt’s DAX 30 index shed 0.29 per cent to 6,537.76 and in Paris the CAC 40 sank 0.41 per cent to 3,167.91.
At 1044 GMT, the FTSEurofirst 300 traded 0.1 per cent higher at 1,043.88 points, reversing earlier losses on gains in defensive drug stocks. The EuroSTOXX 50 of eurozone blue chips traded 0.2 per cent lower at 2,253.81 points.
“The market is not going anywhere really until we’ve heard (Fed chairman) Mr Bernanke’s testimony,” said Zeg Choudhry, head of equities trading at Northland Capital Partners.
AMERICA: Stocks closed lower for the seventh day out of the last eight on Monday after the government reported that U.S. consumers cut their spending last month.
The news pushed stocks down from the start of the trading day. Though they recovered a bit around midday, all three major indexes closed down. The Dow Jones industrial average dropped 49.88 points, or 0.4 percent, to 12,727.21.
The Standard & Poor’s 500 index fell 3.14 points, or 0.23 percent, to 1,353.64. The Nasdaq composite index fell 11.53 points, or 0.4 percent, to 2,896.94.
Companies that rely heavily on consumer spending were among the weakest on the New York Stock Exchange. Home Depot fell 64 cents, or 1.2 percent, to $51.45. Lowe’s Cos. lost 92 cents, or 3.4 percent, to $25.80.
Industrial stocks also fell sharply. General Electric and Caterpillar, a heavy equipment maker, each fell about 1 percent. GE lost 18 cents to $19.59. Caterpillar lost 92 cents to $81.15, one of the biggest losses among the 30 stocks that make up the Dow average.
In the Treasury market, the yield on the benchmark 10-year Treasury fell to 1.45 percent from 1.49 percent late Friday as investors sought the relative safety of government debt.
The U.S. corporate earnings season resumes in earnest this week with reports from major companies that cover a wide span of the economy. On deck Tuesday are Harley-Davidson, Coca-Cola, Goldman Sachs and Johnson & Johnson. Intel and Yahoo also report this week.
Other stocks making big moves included:
— Visa rose $3.06 to $127.15 and MasterCard rose $7.29 to $436.89. The two giant payment processing companies, along with major banks, settled a seven-year old lawsuit with merchants over fees they charge when customers pay with credit cards.
— Par Pharmaceutical jumped $13.42 to $50. The generic drug maker agreed to be acquired for $1.84 billion in cash by the private investment firm TPG. The offer was a 37 percent premium to Friday’s closing price.
— Yahoo rose 34 cents in after-hours trading to $15.98 after the company named longtime Google executive Marissa Mayer to be its next CEO. Mayer will be the fifth leader the struggling Internet pioneer has had in the past five years.
Declining stocks narrowly outpaced rising ones. Volume was light at 2.9 billion shares.
Benchmark Currency Rates