Asian markets clouded by China concerns

Asian stocks were mostly lower yesterday, weighed down by concerns over a slowdown in China’s economy, while oil prices edged back up after big falls in New York.

Receding concerns over the eurozone debt crisis provided support for the euro, which continued its thrust upwards against the yen and the greenback.

Tokyo stocks closed down as profit-taking on recent gains and concerns over China’s slowing economic growth weighed on the benchmark index.

The Nikkei 225 Index gave up 0.55 percent, or 55.50 points, to 10,086.49.

“The Japanese market succumbed to profit-taking, while a dip in other Asian markets knocked investor sentiment, said Hiroichi Nishi, general manager of equity division at SMBC Nikko Securities.

Chinese shares ended flat. The Shanghai Composite Index edged up 1.36 points to 2,378.20.

“The market will likely be up and down in the short term… and a slowing domestic economy may hurt sentiment from a long-term perspective,” Zhang Qi, an analyst at Haitong Securities, said.

Sydney fell 0.48 percent, or 20.7 points, to 4,254.3, while Seoul fell 0.73 percent, or 14.92 points, to 2,027.23.

HONG KONG: Shares closed 0.15 percent lower yesterday, a fourth straight loss. The Hang Seng Index slipped 31.61 points to 20,856.63.
“We are in a transition phase right now. Markets have been weak but people are not totally bearish. They are taking some profits now …,” said Francis Cheung, CLSA’s Hong Kong-China equity strategist.

SINGAPORE: Southeast Asian stocks ended mostly higher yesterday, buoyed by buying in late trade, while profit-booking across markets limited gains.
In Singapore, the Straits Times Index closed up 0.10 percent, or 2.90 points, at 3,005.63.
Among the actives, United Overseas Bank gained 0.77 percent to S$18.37 while Keppel Corp fell 0.55 percent to S$10.84.

KUALA LUMPUR: Late buying interest in information technology-related counters helped Bursa Malaysia to close higher yesterday, dealers said.
The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBMKLCI) rose 4.91 points to close at 1,582.53.
Profit-taking was seen earlier, dampened by worries over the deeper-than-expected slowdown in China’s economic growth.
Gainers led losers by 384 to 338 while 371 counters were flat, 401 untraded and 23 suspended.

In other markets:

* Taipei gained 0.12 percent, or 9.24 points, to 7,981.94.

* Manila fell 1.26 percent, or 64.30 points, to 5,037.94.

* Jakarta added 0.35 percent, or 14.07 points, to end at 4,036.23.

* Bangkok rose 0.93 percent, or 11.07 points, to 1,207.67.

* Mumbai rose 285.53 points or 1.65 percent to 17,601.71, its second straight day of gains.

EUROPE: European shares were steady yesterday in choppy trading as investors cautiously positioned ahead of US home sales data.

By 1205 GMT, the pan-European FTSEurofirst 300 index of top shares was flat at 1,093.78 points after giving up the bulk of its early gains.

London’s FTSE 100 index edged up 0.06 percent to 5,895.00 points approaching midday. Frankfurt’s DAX 30 climbed 0.21 percent to 7,070.18 and in Paris the CAC 40 gained 0.15 percent to 3,536.30.

“Markets aren’t that easy after last week’s run-up, we are currently in a consolidation,” said Markus Huber, head of German trading at ETX Capital.

AMERICA: U.S. stocks closed mixed Wednesday after a quiet trading day that left the indexes little changed.

The Dow Jones industrial average closed down 45.57 points, or 0.3 percent, to 13,124.62. It had been up 20 shortly after the opening bell. The Dow had its biggest loss in two weeks on Tuesday, falling 68.94 points.

The Standard & Poor’s 500 index closed down 2.63 points, or 0.2 percent, at 1,402.89. The Nasdaq composite average closed up 1.17 at 3,075.32.

Hewlett-Packard led the Dow lower, sliding 2.2 percent after saying it would combine its printer and PC divisions to save money and improve efficiency. H-P is coping with declining sales of PCs and printer ink as smartphones, tablets and electronic document-sharing gain popularity.

Earlier Wednesday, the National Association of Realtors released a mixed report about the state of the housing market. Sales of previously occupied homes dipped last month, but the sales pace for the winter was the best in five years, NAR said. Housing has been dragging on the economic recovery; an oversupply of homes has decimated construction and other trades in many parts of the country.

Without strongly positive or negative news to move the market, stocks meandered sideways for most of the day. John Manley, chief equity strategist for Wells Fargo Advantage Funds, said the lack of market-moving events is generally good for stocks. Traders are increasingly confident that the risks hanging over the market from Europe, oil prices and China will blow over, he said.

“If it hasn’t happened today, that means it might not happen tomorrow,” Manley said. “My guess is, no news means a slight upward bias to the market.”

The yield on the 10-year Treasury note fell to 2.30 percent from 2.36 percent late Tuesday. Gold and crude oil prices rose slightly.

Stocks closed lower on Tuesday after two reports signaled an economic slowdown in China. Supercharged growth in China over the past three years has helped sustain the global economic recovery. The Dow had its biggest loss since March 6.

The Dow is still up 1.3 percent this month and 7.4 percent so far this year. Other indexes are up even more for the year: The S&P 500 has gained 11.6 percent; the technology-focused Nasdaq composite 18.1 percent.

In a research report Wednesday, Goldman Sachs analysts urged investors to dump bonds and put money into stocks. The report argues that the weak economic growth in the United States and Europe is not universal, and that the 2010s could be the strongest period for world growth between 1980 and 2050.

It also argues that, while Japan’s two decades of economic stagnation in the 1990s and 2000s are a tempting comparison to what the U.S. and Europe face today, Japanese stocks were far more overvalued before Japan entered its decline.

“We think it’s time to say a ‘long goodbye’ to bonds, and embrace the ‘long good buy’ for equities as we expect them to embark on an upward trend over the next few years,” the report says.

Benchmark Currency Rates
	EUR 	JPY 	GBP 	CHF 	CAD 	AUD 	HKD
USD	– 	1.3233 	0.0120 	1.5874 	1.0977 	1.0082 	1.0472 	0.1288
EUR	0.7557 	– 	0.0091 	1.1996 	0.8294 	0.7620 	0.7913 	0.0973
JPY	83.450 	110.430 – 	132.475 91.5900 84.1390 87.3860 10.7480
GBP	0.6300 	0.8336 	0.0076 	– 	0.6914 	0.6352 	0.6597 	0.0811
CHF	0.9111 	1.2057 	0.0109 	1.4463 	– 	0.9187 	0.9542 	0.1173
CAD	0.9918 	1.3124 	0.0119 	1.5743 	1.0885 	– 	1.0385 	0.1277
AUD	0.9550 	1.2636 	0.0114 	1.5159 	1.0482 	0.9628 	– 	0.1230
HKD	7.7640 	10.2735 0.0931 	12.3245 8.5211 	7.8280 	8.1302  –
                                                              Bloomberg

 

Category: FinanceAsia, Stocks