BOJ moves take steam out of rally
Asian markets rose yesterday August 30 but early gains in Tokyo were pared and the dollar also tumbled as moves by the Bank of Japan (BOJ) to fight the strong yen disappointed traders.
TOKYO: The Nikkei index had soared more than 3 percent by the break as the BOJ held an emergency meeting in response to concerted government pressure to address the yen’s continuing strength.
But the market ended 1.76 percent, or 158.20 points, higher at 9,149.26 as dealers were unimpressed with the bank’s measures.
Markets began the day on a high after Federal Reserve chief Ben Bernanke reassured the country that he was ready to step in if the US recovery faltered, lifting hopes for the global outlook.
But the BOJ’s policy measures took the steam out of the rally.
The central bank said yesterday that it will offer around 10 trillion yen in six-month low interest loans in addition to the 20 trillion yen of an existing three-month loan programme that started in December.
The move would help lower rates in the market place with a view to easing the yen’s strength, said the bank, which also left its key interest rate unchanged at 0.1 percent.
SHANGHAI: Stock exchange added 1.61 percent, or 41.92 points, to 2,652.66.
SYDNEY: The ASX 200 ended 1.89 percent, or 82.6 points, higher at 4,452.7 while Seoul closed up 1.77 percent, or 30.57 points, at 1,760.13.
Wall Street provided a strong cue, with the Dow jumping 1.65 percent after Bernanke’s comments Friday that the Fed would take more “unconventional” steps to boost growth if the US economic outlook “deteriorated significantly”.
HONG KONG: Stocks closed 0.68 percent higher yesterday as traders welcomed comments by Federal Reserve chief Ben Bernanke that the bank would provide support for the US economy.
The benchmark Hang Seng Index rose 139.87 points to 20,737.22. Turnover was HK$49.25 billion.
“It was a technical rebound in cautious trade, but the market is expected to head south as excitement from strong corporate earnings fades,” said a strategist at First Shanghai Securities.
SINGAPORE: Stocks closed 0.62 percent, or 18.32 points, higher at 2,957.06 points.
Casino operator Genting Singapore rose 3.75 percent to S$1.66 and banking group DBS ended 1.02 percent higher at S$13.86.
The Singapore Stock Exchange’s real estate index fell 0.89 percent, with top developer CapitaLand down 0.5 percent and City Developments falling 4.2 percent.
KUALA LUMPUR: Share prices on Bursa Malaysia extended their technical rebounds yesterday August 30. Overall declining counters outpaced advancing counters by 377 to 334.
The FBM Kuala Lumpur Composite Index (FBM KLCI) rebounded from its intra-day low of 1,412.98 to its intra-day high of 1,428.44 yesterday. It closed at 1,422.49 points, giving a day-on-day gain of 11.44 points, or 0.81 percent.
In other markets:
TAIPEI rose 0.24 percent, or 18.29 points, to 7,741.20.
JAKARTA fell 0.17 percent, or 5.17 points, to 3,099.56.
WELLINGTON ended 0.98 percent, or 29.37 points, higher at 3,036.81.
BANGKOK rose 1.03 percent, or 9.28 points, to close at 909.65.
MUMBAI closed 0.19 percent, or 33.70 points, higher at 18,032.11.
MANILA was closed for a public holiday.
VIETNAM: The VN Index jumped by 15.41 points or 3.59 percent to 444.55 points, that marked the highest point-gaining session since January 4, 2010.
The HNX index shared the same scenario when surging 6.6 points or 5.58 percent to 124.88 points with total market trade of over 20 million shares valued at 471 billion dong.
EUROPE: Stock markets closed lower in quiet trade yesterday as investors braced for a key US employment report later in the week for their next lead on the economic outlook, dealers said.
They said strong gains of 1.65 percent on Wall Street last Friday, driven by reassurances from Federal Reserve chief Ben Bernanke that he was ready to step in if the economy faltered again, helped steady nerves after recent losses.
London was closed for a public holiday, adding to the subdued tone.
In Paris, the CAC 40 index lost 0.58 percent to 3,487.01 points and in Frankfurt the DAX shed 0.65 percent to 5,912.41 points.
AMERICA: Stocks fell Monday after more signs of slowing economic growth got investors worried ahead of a key report on jobs later this week.
The Dow Jones industrial average lost ground throughout the day and closed with a loss of 141 points. Other indexes also fell more than 1 percent. Bond prices rose, sending interest rates lower, as money moved back into the Treasury market.
The latest cause of worry on the economy came in a report early Monday showing that personal incomes rose less than expected in July. That added to a series of discouraging reports suggesting that growth could slow down in the second half of the year.
Investors have been focusing on employment data as a way of predicting where the economy is going. Signs of a slowdown in growth has plagued the market for more than a month. Investors are unsure if companies will be able to keep up strong earnings growth if the recovery runs out of steam or falls back into recession. And consumers aren’t likely to spend more until there are clear and regular signs of hiring.
Investors have been betting in recent weeks that the weaker economic reports will translate into smaller earnings that previously thought. That, in turn, has helped drive stocks lower to match the diminished expectations.
According to preliminary calculations, the Dow fell 140.92, or 1.4 percent, to 10,009.73. The Standard & Poor’s 500 index fell 15.67, or 1.5 percent, to 1,048.92, while the Nasdaq composite index fell 33.66, or 1.6 percent, to 2,119.97
About four stocks fell for every two that rose on the New York Stock Exchange, where volume was very light at 820 million.
The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.53 percent from 2.65 percent late Friday. That yield helps set interest rates on mortgages and other consumer loans.
Benchmark Currency Rates
USD EUR JPY GBP CHF CAD AUD HKD
HKD 7.781 9.8363 0.092 12.0329 7.5893 7.3373 6.9384
AUD 1.1214 1.4177 0.0133 1.7343 1.0938 1.0575 0.1441
CAD 1.0605 1.3406 0.0125 1.64 1.0343 0.9456 0.1363
CHF 1.0252 1.2961 0.0121 1.5855 0.9668 0.9142 0.1318
GBP 0.6466 0.8174 0.0076 0.6307 0.6098 0.5766 0.0831
JPY 84.599 106.9458 130.83 82.515 79.776 75.438 10.873
EUR 0.791 0.0094 1.2233 0.7716 0.7459 0.7054 0.1017
USD 1.2642 0.0118 1.5465 0.9754 0.943 0.8917 0.1285
Bloomberg
Category: Stocks
