Asian markets down after Wall Street drops

04-May-2011 Intellasia | AP | 5:22 PM Print This Post

A batch of weaker-than-expected earnings that interrupted a two-week rally on Wall Street also sent stocks lower in Asia on Wednesday.

Sentiment for riskier assets also was muted as investors fretted about potential terrorist attacks following the killing of Osama bin Laden at the hands of U.S. commandoes over the weekend.

“The market welcomes the good news, but it worries about whether this news will lead to higher short term uncertainties on the concern of revenge activities … the known unknown, will linger and will only dissipate with time,” Bank of America Merrill Lynch said in a report.

Hong Kong’s Hang Seng index dropped 1 percent to 23,407.95, while South Korea’s Kospi was 1 percent lower to 2,180.04. Australia’s S&P ASX 200 was 0.8 percent down to 4,745.10. Indexes in Singapore, Taiwan, Malaysia and mainland China also incurred losses. Markets in Japan were closed for a holiday.

A trader works with a telephone receiver in the crude oil and natural gas options pit on the floor of the New York Mercantile Exchange in New York, April 25, 2011.
REUTERS/Shannon Stapleton

Westpac Banking Corp., one of Australia’s largest lenders, said Wednesday that its first-half profit rose 38 percent, in line with expectations, as bad debt charges fell. But analysts were undecided as to whether the result would boost Aussie banking shares.

“At first glance, the result looks to be in line with market expectations after the group posted a cash profit of $3.168b. After yesterday’s selling across the sector, will this result be enough to stem the tide?” IG Markets in Melbourne stated in a report.

Westpac shares slid 1.9 percent as the bank noted that consumer sentiment was expected to remain cautious. National Australia Bank Ltd. lost 1.4 percent, ANZ Banking Group Ltd. dropped 0.6 percent and Commonwealth Bank of Australia slid 1.1 percent.

On Wall Street on Tuesday, the earnings rally that had lifted the stock market over the past two weeks paused after a batch of weaker-than-expected results.

Pfizer, the world’s largest drug maker, posted lower-than-expected quarterly results. Clorox, Molson Coors Brewing Co., and Beazer Homes also slipped after announcing weaker earnings.

The Dow Jones industrial average gained less than a point to close at 12,807.51. The S&P 500 index fell 4.60 points to 1,356.62. The Nasdaq composite fell 22.46 points to 2,841.62.

Oil prices fell to near $110 a barrelin Asia as a report showed U.S. crude supplies rose more than expected last week, suggesting demand growth could be waning.

In currencies, the euro weakened to $1.4792 against the greenback from $1.4821 late Tuesday in New York. The dollar was unchanged against the Japanese currency at 80.91 yen.

The dollar has fallen over the past few weeks as investors expected the Federal Reserve would keep interest rates low. Central banks overseas are raising interest rates. Higher rates tend to make currencies more attractive to investors seeking higher yields.-By Pamela Sampson


Category: Stocks

Print This Post

Comments are closed.