Asian markets slumped yesterday Wednesday August 3 as traders switched their attention from the US debt deal to the weakening global economic outlook and fears of fresh sovereign debt contagion in the eurozone.
Despite President Barack Obama’s signing off on the deal to raise the US debt ceiling and avoid a default, equities suffered a heavy sell-off and investors put their cash in safe haven gold, which surged to a record high.
Tokyo shares tumbled 2.11 per cent, their sharpest percentage loss since the March 11 quake on a continued strong yen as weak US economic data overshadowed the US debt deal.
The Nikkei-225 index dropped 207.45 points to 9,637.14, the sharpest percentage loss since March 15. The Topix index of all first-section issues closed down 17.21 points, or 2.04 percent to 826.75.
Shanghai ended flat, with concerns over the domestic economy weighing on sentiment. The composite index closed down 0.77 points at 2,678.49.
“There are a lot of negative numbers coming out and investors are worried that domestic macro-economic data due next week could bring more bad news,” Tang Yonggang, an analyst at Hongyuan Securities, told Dow Jones Newswires.
Sydney tumbled 2.27 per cent, or 100.8 points, to 4,332.8, while Seoul dived 2.59 per cent, or 55.01 points, to 2,066.26.
The red numbers in Asia followed similar losses on Wall Street, where markets fell for an eighth straight day.
The Dow Jones Industrial Average closed lower by 265.87 points (2.19 per cent) at 11,866.77 and the broader S&P 500 dropped 32.89 points (2.56 per cent) to 1,254.05.
HONG KONG: Stocks fell 1.91 per cent yesterday, in line with world markets, amid growing concerns about the state of the global economic recovery.
The benchmark Hang Seng Index lost for the second straight session, retreating 428.74 points to 21,992.7, its biggest drop in a month.
Traders are now looking at about 21,500 as the next crucial level for the Hang Seng.
SINGAPORE: Southeast Asian stock markets dropped yesterday as investors cashed in gains in financials and big-caps.
Singapore stocks suffered their biggest fall in more than two months to hit two-week lows. The Straits Times Index closed 1.47 per cent, or 46.75 points, lower at 3,130.34.
Singapore Airlines sank 2.7 per cent to S$12.24 and Keppel Corp was 1.46 per cent lower at S$10.84.
KUALA LUMPUR: Share prices on Bursa Malaysia fell sharply across a broad front yesterday, taking the cue from the Hong Kong and Tokyo stock markets after Wall Street tumbled overnight.
Losers outpaced gainers by 514 to 259 on the local bourse.
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) fell through its immediate downside support of 1,550 points.
The benchmark index fell from its day high of 1,549.49 to its day low of 1,538.95. It closed at 1,545.10, posting a loss of 9.75 points.
In other Asian markets yesterday:
* Taipei fell 1.49 per cent, or 127.86 points, to 8,456.86.
* Manila fell 1.16 per cent, or 52.78 points, to 4,488.45.
* Jakarta fell 0.99 per cent, or 41.35 points, to 4,136.50.
* Bangkok fell 0.54 per cent, or 6.15 points, to 1,133.46.
* Mumbai slid 0.94 per cent, or 169.34 points, to 17,940.55, a six-week low .
VIETNAM: the VN index of Hochiminh Stock Exchange (STC) lost points for the fifth consecutive session with 5.08 points or 1.28% to 391.47 pts with 60% of listed losing points.
The HNX Index today ended the chain of three consecutive losses to gain 0.1 points to 67.45 pts. However, the trading turnover decreased nearly 30% day on day.
EUROPE: European shares extended losses yesterday, led by France’s Societe Generale which fell more than 7 per cent after the bank warned it might miss 2012 profit goals.
Italy’s blue-chip index rebounded from earlier losses and traded up 0.9 per cent by 1125 GMT.
The FTSEurofirst 300 index of top European shares was down 0.4 per cent at 1,044.90 points, extending a three-session losing streak.
Across Europe, Britain’s FTSE 100 was down 1.1 per cent; Germany’s DAX and France’s CAC40 fell 0.7 and 0.6 per cent respectively.
“This week’s decisions on Capitol Hill can only be regarded as a first small step of a future comprehensive plan,” UniCredit analyst Tim Brunne said. “The US is at risk of getting the European disease of a piecemeal approach to tackling its debt sustainability issues,” he added.
AMERICA: The Dow ended a volatile day with small gains Wednesday to avoid a losing streak not seen since Jimmy Carter was president.
The Dow Jones industrial average rose 29.82 points and broke an eight-day losing streak. The Dow was down as much as 166 points in the morning. A ninth day of losses would have been the longest for the blue-chip index since February 1978.
Markets have fallen recently because investors are becoming increasingly worried about the U.S. economy.
The Dow, the Standard & Poor’s 500 index and Nasdaq were down more than 1 percent earlier in the day, but edged higher throughout the afternoon.
The Dow Jones industrial average finished with a gain of 0.3 percent, to 11,896.44. The S&P 500 index rose 6.29, or 0.5 percent, to 1,260.34. The S&P had been down for seven straight days through Tuesday. It is up 0.2 percent for the year after being down 0.3 for the year on Tuesday.
The Nasdaq composite added 23.83, or 0.9 percent, to 2,693.07.
The broad S&P 500 index- the index followed by most professional money managers and U.S. mutual funds- rose after it hit a low for the year of 1,234. Some investors saw it as an opportunity to buy the S&P 500 index. As a whole, companies in the index are expected to have record profits this year.
Coca-Cola led the Dow average higher with a gain of nearly 2 percent. Companies that depend most on an expanding economy in order to make profits had the steepest losses. Caterpillar Inc. fell 0.9 percent, the most of the 30 stocks in the Dow average, followed closely by Chevron Corp. and Boeing.
The yield on the 10-year Treasury note fell to another low for the year of 2.56 percent, from 2.62 percent Tuesday, as investors moved money into assets that hold up better during economic downturns. Gold, another traditional safe haven, rose nearly 2 percent to $1,671 an ounce.
Several large U.S. companies reported earnings before the market opened. MasterCard rose nearly 14 percent after the company beat analysts’ estimates. Clorox fell 2 percent after the company said higher commodity costs were eating into its income. And CBS gained 1.6 percent after it said a deal with Netflix Inc. had lifted profits.
Analysts predict that the unemployment rate was 9.2 percent in July, unchanged from the month before.
Benchmark Currency Rates USD EUR JPY GBP CHF CAD AUD HKD USD EUR JPY GBP CHF CAD AUD HKD HKD 7.7976 11.160 0.0998 12.804 10.074 8.1047 8.3638 - AUD 0.9323 1.3344 0.0119 1.5309 1.2045 0.9690 - 0.1196 CAD 0.9621 1.3771 0.0123 1.5798 1.2430 - 1.0320 0.1234 CHF 0.7740 1.1079 0.0099 1.2710 - 0.8045 0.8302 0.0993 GBP 0.6090 0.8717 0.0078 - 0.7868 0.6330 0.6532 0.0781 JPY 78.140 111.843 - 128.311 100.954 81.217 83.814 10.021 EUR 0.6987 - 0.0089 1.1472 0.9026 0.7262 0.7494 0.0896 USD - 1.4313 0.0128 1.6421 1.2920 1.0394 1.0726 0.1282 Bloomberg