Asian markets were mixed yesterday as weak European data added to pessimism after this week’s disappointing summit on saving Greece from leaving the eurozone.
Positive leads from Wall Street and European markets were unable to provide a thrust as Asian indexes in the past month have given up the gains made since the start of the year.
Tokyo closed up 0.20 per cent, or 17.01 points, to 8,580.39, Sydney eased 0.66 per cent, or 26.6 points, at 4,029.2, while Seoul was 0.53 per cent, or 9.7 points, higher at 1,824.17 while Shanghai was down 0.74 per cent at 2,333.55.
As traders digested the outcome of Wednesday’s summit in Brussels, a string of data highlighted the sad state of Europe’s economy.
“Investors still have very little confidence in the stock market and financial markets as a whole because of what’s happening in Europe,” said Francis Lun, managing director at Lyncean Securities.
“The fallout from Greece’s possible exit from the euro would be catastrophic for the market,” he added.
HONG KONG: Shares gained 0.25 per cent yesterday following recent heavy losses fuelled by growing concerns about a possible Greek exit from the eurozone.
The benchmark Hang Seng Index added 47.01 points to 18,713.41 on turnover of HK$46.01 billion.
The index was given a slight lift by bargain hunters and hopes that China will loosen monetary policy further following a string of weak economic data.
SINGAPORE: The Straits Times Index fell 0.2 per cent to 2,772.75 at the close, extending losses for a third week.
These were the most active shares in the market: Global Logistic Properties gained 2.3 per cent to S$2.02 and Memstar Technology rose 5 per cent to 6.3 Singapore cents.
Meanwhile, Hisaka Holdings added 7.9 per cent to 41 Singapore cents and Valuetronics rose 8.5 per cent to 25.5 Singapore cents.
KUALA LUMPUR: Share prices on Bursa Malaysia ended higher yesterday despite weaker sentiments in the Asian stock markets, dealers said.
The FTSE Bursa Malaysia KLCI (FBM KLCI) closed 2.87 points, or 0.2 per cent higher, at 1,551.12, lifted up by gains in most heavyweight counters.
A dealer said local investors may be reacting to the generally positive quarter financial reports of companies recently as well as announcements of contracts secured.
Gainers led losers 432 to 266, while 307 counters were unchanged, 545 untraded and 19 others suspended.
In other markets:
* Taipei fell 53.26 points, or 0.75 per cent to 7,071.63. HTC shed 3.95 per cent to T$413.0 while TSMC was 0.74 per cent lower at T$80.0.
* Manila rose 0.44 per cent, or 21.75 points, to 4,925.97. Metropolitan Bank and Trust rose 0.95 per cent to 85.30 pesos and Universal Robina gained 1.98 per cent to 59.10 pesos but SM Investments fell 0.22 per cent to 668.50 pesos.
* Wellington was down 0.28 per cent, or 9.96 points, at 3,486.23. Contact Energy was flat at HK$4.80, Fletcher Building gained 0.16 per cent to HK$6.17 and Telecom eased 0.78 per cent to HK$2.56.
EUROPE: European shares rose for a second day yesterday after stinging losses earlier in the week, as bargain hunters stepped in to buy stocks that had fallen on concerns about the global economy and Europe’s debt problems.
Rising speculation that European authorities could soon initiate new aid measures also boosted stock markets.
The FTSEurofirst 300 index rose 0.6 per cent at 988.33 points by 0740 GMT, adding to a 1.1 per cent gain on Thursday.
Germany’s DAX rose around 1 per cent while France’s CAC-40 added 0.7 per cent, and the eurozone’s blue-chip Euro Stoxx 50 also rose 0.7 per cent.
“I’m not taking big positions but at some point you have to step in,” said ClairInvest fund manager Ion-Marc Valahu.
“The European markets have been taken down so far that you’re starting to see some value in stocks,”
AMERICA: Another flare-up in Europe’s debt crisis knocked U.S. markets lower Friday. This time, it was more trouble at a major Spanish bank.
Stock indexes were waffling between small gains and losses until news broke in the afternoon that Bankia, a hobbled Spanish lender, asked that country’s government for $23.8 billion in support. Earlier in the day, Standard & Poor’s cut the bank’s credit rating to junk status because of deepening uncertainty over its restructuring plans.
The Dow Jones industrial average dropped as much as 108 points, then recovered slightly to end down 74.92 points at 12,454.83. Concerns about Europe have sent the Dow on a steady slide this month, erasing most of its gains from the first quarter. It finished the week slightly higher, its first weekly gain for May.
The declines were broad. Eight of the 10 industry groups in the Standard & Poor’s 500 index fell. The only sectors that rose were utilities and telecommunications, which investors tend to buy when they’re skittish about the market. Trading volume was light ahead of the Memorial Day holiday.
Facebook, marking its one-week anniversary as a public company, fell 3.4 percent to $31.91. Talbots, the women’s clothing chain, plunged 41 percent to $1.51 after announcing that a deadline expired without a deal to be bought by a private equity firm.
In addition to the new worries about Spain, the head of Germany’s central bank, which has been skeptical of bailing out Greece and other weak European countries, reinforced the point when he said it was an “illusion” to think allowing euro zone countries to borrow money jointly would solve the crisis.
In Asia, media reports suggested that some of China’s biggest banks will miss their annual lending targets for the first time in seven years, and Taiwan lowered its economic growth forecast for the year. Caterpillar, which relies heavily on demand from China, fell 1 percent.
In other trading, the Standard & Poor’s 500 index fell 2.86 points to 1,317.82. The Nasdaq composite fell 1.85 points to 2,837.53.
Stock indexes in France, Britain, Germany and Spain rose, while Greece’s ATHEX plunged 3.5 percent. Borrowing rates edged higher for Spain and Italy.
Greece’s June 17 elections are an overhang on the market. The results will determine if Greece agrees to the spending cuts that it must swallow if it wants to stay in the 17-country euro zone, or if it goes its own way.
The idea of cutting government spending is unpopular in a country which is in a fifth year of recession and residents have grown accustomed to public-sector largesse. But if Greece left the euro zone, it would have to revert to its own currency. That would be severely devalued, and the country’s standard of living would probably be crushed.
Greece makes up just 2 percent of the euro zone economy, but its fate would carry ripple effects to other, larger members. Unnerved traders could dump the bonds of other struggling European countries, such as Spain and Italy. Residents could start to pull money out of banks there, as has been happening in Greece.
The standoffs so far have almost always lasted until the 11th hour.
“Every time you think it’s going to fall off a cliff and end very badly, something happens,” said Beata Kirr, senior portfolio manager at Bernstein Global Wealth Management in Chicago. “The European Central Bank steps in to buy Italian and Spanish bonds. Or Germany softens its stance on austerity. All of these things have happened when it’s past the precipice.”
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