Asian markets were mixed yesterday as bargain hunting after the previous day’s big losses was countered by nervousness about the political and economic situation in Europe.
Traders were also following losses on Wall Street and in European bourses while keeping an eye on central bank policy meetings in Washington and Tokyo this week.
Economic matters in the eurozone weighed on sentiment after data showed private sector activity sank at its fastest rate in five months in April, indicating a longer recession than previously thought.
In Tokyo, shares closed lower with the benchmark Nikkei 225 Index losing 0.78 percent, or 74.13 points, to 9,468.04.
But weakness in the Japanese market would likely be limited ahead of central bank policy meetings in Washington and Tokyo and next week’s public holiday in Japan, said Tatsunori Kawai, chief strategist at kabu.com Securities.
Investors were also looking to Japanese corporate earnings, but markets had largely priced in concerns of soft profits, said Mattia Ciancaleoni, director of equity sales at Citigroup Global Markets Japan.
In Shanghai, shares ended flat. The composite index edged up 0.24 points, to 2,388.83.
Concerns over small companies have arisen after the Shenzhen stock exchange, China’s second stock market, said last week that small firms must meet stricter rules or face delisting.
Seoul shed 0.47 percent, or 9.21 points, to 1,963.42, while Sydney added 0.18 percent, or 8.0 points, to 4,360.4.
HONG KONG: Shares closed 0.26 percent higher yesterday as bargain-buyers moved in following the previous day’s heavy losses.
The Hang Seng Index rose 52.77 points to 20,677.16.
However, Chinese economic concerns limited the gains, while dealers remained concerned about events in Europe.
SINGAPORE: Most Southeast Asian markets rose yesterday and snapped three-day losing streaks, but concerns over Europe remained as political uncertainty and slumping business raised fears over a sustained recession.
Singapore stocks closed higher in light volume helped by property firms with CapitaMalls Asia and its parent CapitaLand climbing 2.0 percent and 1.4 percent respectively.
The benchmark Straits Times Index ended 0.41 percent, or 12.02 points, higher at 2,974.37.
KUALA LUMPUR: Share prices on Bursa Malaysia closed lower yesterday amid local developments and uncertainties over the global economy, dealers said.
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) ended 1.52 points lower at 1,582.28 after opening 6.04 points weaker at 1,585.81.
OSK head of research Chris Eng said: “Back home, investors are awaiting the outcome of Bersih 3.0 rally, scheduled for this Saturday, before making any investment decisions.
In other markets:
* Taipei rose 0.24 percent, or 17.75 points, to 7,498.84.
* Manila closed 0.13 percent, or 6.51 points, higher at 5,169.60.
* Jakarta rose 0.36 percent, or 14.86 points, higher at 4,170.35.
* Bangkok rose 0.88 percent, or 10.51 points, to 1,199.86.
* Mumbai rose 0.65 percent, or 110.61 points, to 17,207.29.
EUROPE: Europe’s main stock markets rebounded slightly yesterday on bargain-hunting following a day of sharp losses triggered largely by fears of eurozone debt contagion, dealers said.
London’s benchmark FTSE 100 index rose 0.46 percent to 5,691.60 points in late morning deals, Frankfurt’s DAX 30 climbed 0.87 percent to 6,579.63 and in Paris the CAC 40 rallied 1.03 percent to 3,130.24.
Madrid gained 1.57 percent, even as Spain’s borrowing rate nearly doubled on three- and six-month treasury bills.
“The markets are beginning to correct themselves … following a big sell-off of risky assets (Monday) …,” said Craig Erlam, an analyst at Alpari trading group.
AMERICA: Muscular U.S. corporate earnings and higher spirits in Europe propelled U.S. stocks higher Tuesday.
Five of the 30 big companies that make up the Dow Jones industrial average rose more than 1.5 percent. AT&T led the gains after reporting better-than-expected profit. Verizon, AT&T’s main rival, was close behind. 3M rose sharply after delivering an impressive quarterly report. GE and DuPont rounded out the list of top gainers.
Traders punished Apple after AT&T said it activated far fewer of Apple’s iPhones. Apple fell two percent, dragging the Nasdaq composite average to a lower close. Apple shares recovered the day’s losses several times over in after-hours trading after the company announced another record quarterly profit that easily beat analysts’ forecasts.
Chocolate maker Hershey and regional bank Regions Financial helped boost the Standard & Poor’s 500 index after both companies outpaced Wall Street’s estimates.
Earnings reports are blowing the tops of analysts’ expectations, providing temporary relief for markets roiled by fears about Europe, said Sam Stovall, chief equity strategist with financial-data firm S&P Capital IQ. He said analysts had expected only a half-percent profit increase for the S&P 500 this quarter. Based on the results so far, he said, the gain could be ten times bigger.
“These are legitimately strong results, and in retrospect, the bar was set too low,” Stovall said.
The gains for blue chips were broad. Only five Dow components fell, led by Wal-Mart Stores. The world’s biggest retailer is reeling from reports over the weekend that top company officials knew about widespread bribery of foreign officials.
European stocks rallied into the close a day after one of their worst drops in months. Monday’s sell-off followed fears that deficit-cutting deals by some European nations might unravel.
On Tuesday, as Monday’s panicked atmosphere lifted, interest rates on Spanish bonds already in circulation declined. France’s CAC-40 index closed up 2.3 percent. Germany’s DAX rose one percent, London’s FTSE 100 0.8 percent.
Still, there were signs that Europe’s troubles persist. Bond investors demanded much higher interest rates from Spain and Italy when they auctioned new debt, suggesting that there is more pain ahead for those debt-strapped countries.
Stovall expects fears about Europe to overshadow earnings results in the coming weeks. After months of strong stock-market gains and little talk about Europe, traders are again nervous that the crisis will boil over, harming the global economy and gumming up the financial system, he said.
“First-quarter earnings are helping to justify the equity market’s advance since early October,” Stovall said, but “if Europe continues to have its problems, that will outweigh” the corporate earnings news.
Stocks rose consistently from early October through the end of the first quarter on March 31. Trading has since turned volatile. Swings of more than 100 points in the Dow have become common, a contrast to the steady, modest gains of the first three months of the year.
The Dow closed up 74.39 points, or 0.6 percent, at 13,001.56. IBM rose solidly after the company said it is raising its quarterly dividend and plans to repurchase $7 billion more of its stock.
The S&P 500 rose 5.03 points, or 0.4 percent, to 1,371.97.
The Nasdaq composite average fell 8.85 points to 2,961.60. Apple is the Nasdaq’s biggest component and the biggest company by market value.
As stocks rose, traders sold ultra-safe Treasurys. The yield on the 10-year Treasury note rose to 1.97 percent from 1.94 percent late Monday.
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