Asian markets were mostly higher yesterday Thursday September 8 as news that a German court had dismissed an attempt to block the country’s payments to eurozone bailouts was tempered by profit-taking.
Early gains were pared as dealers digested weak economic data, while they also had an eye on an upcoming speech by US President Barack Obama on job creation.
Tokyo closed up 0.34 percent, or 29.71 points, to 8,793.12, Seoul added 0.72 percent, or 13.18 points, to 1,846.64 while Sydney was 0.11 percent, or 4.6 points, higher at 4,188.0. Shanghai fell 0.68 percent, or 17.15 points, to 2,498.94.
Asian markets were also given a lift by a powerful performance on Wall Street, which bounced back strongly from several days of heavy selling.
However, in Sydney, the morning’s gains were cut back as dealers digested data showing unemployment rose for a second straight month in August, to 5.3 percent from 5.1 percent in July.
And in Tokyo traders were looking over figures showing Japan’s current account surplus shrank 42.4 percent from a year earlier in July, the fifth consecutive decline in the wake of the March 11 earthquake and tsunami.
Other data showed a decline in machinery orders in July, an indication that corporate capital spending was being deterred as a strong yen makes firms less profitable.
Meanwhile, global attention is on what plans Obama will unveil to tackle US unemployment after figures last week showed no jobs were created last month, stoking fears over the world’s biggest economy.
HONG KONG: Shares fell 0.67 percent yesterday on profit-taking after a two-day rally and in nervous trade ahead of upcoming inflation data out of China.
The benchmark Hang Seng Index shed 135.18 points to end at 19,912.82.
Bank of China fell 1 percent to HK$3.02, while ICBC retreated 1 percent to HK$4.99 ahead of Chinese inflation figures with expectations that Beijing will keep a tight rein on monetary policy.
SINGAPORE: Most Southeast Asian stock markets posted limited gains in light volume yesterday, led by commodities-related shares, but investors remained wary amid uncertainty over a eurozone debt crisis and the faltering US economy.
The Straits Times Index ended up 0.87 percent to 2,856.90 yesterday.
Jardine Cycle and Carriage gained 2.04 percent to S$47 and Keppel Land added 2.02 percent to S$3.03.
KUALA LUMPUR: Overall market sentiment remained firm despite consolidations on the regional stock markets yesterday. The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) rebounded to its day high of 1,471.22.
Advancers outpaced decliners by 415 to 265. The FBM KLCI rebounded from its day low of 1,463.18 to its day high of 1,471.22 yesterday.
It closed at 1,469.83 points, giving a day-on-day gain of 5.22 points, or 0.36 percent.
In other markets:
* Manila closed 0.96 percent, or 41.52 points, higher at 4,356.73.
* Wellington closed 0.18 percent, or 7.10 points, higher at 3,308.05.
* Taipei rose 0.26 percent, or 19.36 points, to 7,548.37.
* Bangkok edged up 0.33 percent, or 3.49 points, to 1,072.21.
* Jakarta rose 0.10 percent, or 3.96 points, to 4,005.39.
* Mumbai rose 0.59 percent, or 100.54 points, to 17,165.54.
VIETNAM: The VN Index of Hochiminh Stock Exchange (STC) gained 2 percent to exceed 453 points. The trading value surged strongly by nearly 240 billion dong from the previous trading session to reach 944 billion dong.
Similarly, the HNX Index also increased 0.25 percent to nearly 77 points. The trading value reached over 822.8 billion dong, up 125 billion dong day on day.
EUROPE: Europe’s main stock markets recovered further yesterday after sharp gains the day before, as bank shares rallied and investors awaited an ECB interest rate decision and US jobs data.
Attention also turned to today, when the world’s top financial leaders meet in France to work on a plan to solve the European debt crisis and avoid another recession by boosting growth.
In late morning trading, London’s FTSE 100 index jumped 0.84 percent to 5,314.29 points, Frankfurt’s DAX 30 rallied 0.92 percent to 5,458.28 points and in Paris the CAC 40 advanced 1.08 percent to 3,106.24.
“Both the BoE and ECB’s rate announcements will be keenly watched with some investors speculating of a possible stimulus,” said Simon Furlong, a trader at Spreadex.
AMERICA: Stocks closed sharply lower Thursday after Federal Reserve Chairman Ben Bernanke offered no specific plans to prop up the economy.
In a speech closely watched by investors, Bernanke said the Fed will consider a range of steps at its Sept. 20-21 meeting. The Dow Jones industrial average fell 100 points shortly after Bernanke’s remarks began at 1:30 p.m. Eastern. It ended down 119.
“The implications are that the Fed is going to act, but the market is disappointed because he was a little short on details,” said Scott Brown, chief economist at Raymond James.
Concerns about the U.S. economy have pushed stocks lower each month since April. Many traders now say the stock market is pricing in the assumption that the economy is in a recession, meaning limited job growth and a weaker corporate profits.
The economic worries have pushed the prices of Treasurys and highly-rated corporate bonds higher and their yields lower. The yield on the 10-year Treasury note was 1.99 percent Thursday, down from 3 percent July 25. Mortgage rates, which are affected by Treasury yields, fell to their lowest level in six decades, Freddie Mac reported Thursday.
President Obama will lay out his jobs plan at a joint session of Congress tonight. He is expected to announce a $300 billion package that includes tax cuts, additional state aid and spending on infrastructure.
The Dow Jones industrial average lost 119.05 points, or 1 percent, to 11,295.81. The Standard & Poor’s 500 index fell 12.72, or 1.1 percent, to 1,185.90. The Nasdaq composite shed 19.80, or 0.8 percent, to 2,529.14. Each index had posted gains earlier in the day.
Cisco Systems Inc. led the 30 Dow stocks with a 2.6 percent gain after it was upgraded by analysts. JPMorgan Chase & Co., Bank of America Corp and Boeing Co. each fell 3 percent, pulling the average lower.
Investors received mixed economic data before the market opened. First-time applications for unemployment benefits rose last week to 414,000. Economists had expected 405,000. The prior week’s estimate of new claims was also revised higher.
The weekly report on unemployment applications is an important economic indicator for investors. Rising claims can add to concerns that the job market is stalled and the U.S. economy is headed for another recession. Applications need to fall below 375,000 to indicate sustainable job growth. Last week the government reported there was zero job growth in the U.S. economy in August.
Not all of the economic news Thursday was negative. American exports of cars, airplanes and other goods reached an all-time high in July, the Commerce Department reported. Economists said the jump in exports suggest future growth in the U.S. economy. A weaker dollar has helped American exports this year. The dollar has fallen 8 percent over the last 12 months against an index of six other currencies.
Four stocks fell for every one that rose on the New York Stock Exchange. Volume was lower than average at 3.9 billion shares.
Benchmark Currency Rates USD EUR JPY GBP CHF CAD AUD HKD HKD 7.7945 10.8515 0.1005 12.4564 8.9286 7.8889 8.2703 - AUD 0.9425 1.3121 0.0122 1.5062 1.0796 0.9539 - 0.1209 CAD 0.9880 1.3755 0.0127 1.5790 1.1318 - 1.0483 0.1268 CHF 0.8730 1.2154 0.0113 1.3951 - 0.8836 0.9263 0.1120 GBP 0.6257 0.8712 0.0081 - 0.7168 0.6333 0.6639 0.0803 JPY 77.5260 107.931 - 123.893 88.8051 78.4644 82.2582 9.9462 EUR 0.7183 - 0.0093 1.1479 0.8228 0.7270 0.7621 0.0922 USD - 1.3922 0.0129 1.5981 1.1455 1.0121 1.0610 0.1283 Bloomberg