Fears of a slowdown in the US and poor economic data out of Japan pushed Asian markets lower yesterday July 30, with traders cashing in recent gains.
TOKYO: Strong corporate earnings figures failed to relieve Tokyo’s downbeat mood as fears that the global recovery may be slowing sent dealers into sell-off mode.
Tokyo’s Nikkei gave up 1.64 percent, or 158.72 points, to close at 9,537.30 after the government released figures showing unemployment was rising and industrial production had unexpectedly dipped.
Adding to his woes were data showing industrial output dropped 1.5 percent from the previous month, a serious worry as the country is banking on exports to boost its recovery.
The news dented traders’ confidence, causing them to brush aside Thursday’s earnings reports.
SYDNEY fell 0.68 percent, or 30.6 points, to close at 4,493.5, while Shanghai finished down 0.40 percent, or 10.61 points, at 2,637.50.
“Asian markets are a bit weaker and we’ve had some pretty negative industrial production data from Japan,” IG Markets institutional dealer Chris Weston told Dow Jones Newswires in Sydney.
“I think there’s probably some hesitant trading before the US GDP data, because the US economy is still a huge worry.”
Wall Street provided a weak lead, falling 0.29 percent on Thursday.
SEOUL closed down 0.65 percent, or 11.55 points, at 1,759.33, despite Samsung posting a record second-quarter profit after an 83 percent jump from the previous year.
HONG KONG: Stocks eased yesterday, ending an eight-session rising streak, as investors locked in gains ahead of a series of corporate earnings next week.
The benchmark Hang Seng Index ended 64.01 points down at 21,029.81.
“The market took a breather after rising for eight consecutive sessions, and it was time to take the focal point back to the economy,” said Linus Yip, strategist at First Shanghai Securities.
SINGAPORE: Stocks finished weaker yesterday as Southeast Asian equity markets ended lower or with tiny gains in cautious trade ahead of second-quarter US growth figures but a raft of strong second-quarter earnings pushed share prices higher on the month.
The benchmark Straits Times Index closed down 0.33 percent, or 9.95 points, at 2,987.70.
KUALA LUMPUR: The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) staged another follow-through rebound for the week just ended yesterday. It continued to stay above its psychological resistance of 1,300 points when it closed at 1,360.92 yesterday.
The FBM KLCI staged a follow-through technical rebound on Monday. It trended between its intra-day low of 1,348.58 to its intra-day high of 1,352.78 points. It closed at 1,351.82, giving a day-on-day gain of 6.14 points, or 0.46 percent.
Share prices on Bursa Malaysia paused to consolidate their recent gains on Tuesday after a two-day rebound. The FBM KLCI traced out a “doji” candle when it closed relatively unchanged at 1,352.23, giving a day-on-day gain of 0.41 point, or 0.03 percent.
In other markets:
TEIPEI fell 0.49 percent, or 38.36 points, to 7,760.63.
MANILA edged 2.76 points lower to 3,426.59.
JAKARTA lost 0.89 percent, or 27.53 points, to end at 3,069.28.
BANGKOK added 0.15 percent, or 1.24 points, to close at 855.83.
MUMBAI closed 0.69 percent, or 123.71 points, lower at 17,868.29. Sentiment turned weak on lower-than-expected earnings from some Indian firms.
VIETNAM: The VN-Index increased by 2.8 points or 0.57 percent to 493.91 points.
The HNX-Index closed at 153.33 points, increased by 0.22 point or 0.34 percent with total market trade of over 35 million shares worth 989 billion dong.
EUROPE: European stocks recovered from a sharp fall to close only slightly lower yesterday, and to notch up the biggest monthly gain since March, with US data giving mixed signals on economic growth.
The FTS Eurofirst 300 index of top European shares fell 0.31 percent to a close of 1,043.66 points.
Shares initially fell sharply yesterday, but then recovered, after US economic growth slowed in the second quarter as companies invested heavily in equipment from abroad and consumers spent less, raising concerns about the recovery in the rest of 2010.
In London, the London’s FTSE 100 index of leading shares closed down 1.05 percent at 5,258.02 points.
In Paris, the CAC 40 fell 0.24 percent to 3,643.14 points and in Frankfurt the DAX dropped 0.22 percent to 6,147.97 points.
AMERICA: Stocks had a fitting end to a choppy July as prices seesawed their way to a narrowly mixed finish. The market still had its best month in a year.
Investors had an ambivalent response Friday to the government’s gross domestic product report, which showed that economic growth slowed in the April-June quarter. The Dow Jones industrial average fell almost 120 points in early trading, then ratcheted up and down until the close. The Dow ended down just a point, and the other big indexes had similarly small moves.
The day was much like the rest of July, which saw investors alternately buying on strong earnings reports and selling on weak economic numbers. The Dow rose 7.1 percent for the month. The Dow and the Standard & Poor’s 500 index both had their best months since July 2009 and their first winning months since this past April.
A repeat performance in August seemed unlikely due to the market’s current pessimism, especially since the bulk of second-quarter earnings reports are in. Many investors, uncertain about the where the market is heading, stayed on the sidelines for much of July or moved money into safer investments. Even on days when the Dow was up 100 or 300 points, trading volume was unusually low.
The Dow fell 1.22, or 0.01 percent, to 10,465.94. Its July gain was its best monthly advance since it rose 7.8 percent in July 2009.
Treasurys benefited from the uncertainty. The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.91 percent from 2.99 percent. Its yield is often used as a benchmark for interest rates on mortgages and other consumer loans. A yield below 3 percent suggests investors are worried about long-term growth and don’t fear inflation will be a problem anytime soon. Inflation is a threat to the long-term value of bonds.
Benchmark Currency Rates USD EUR JPY GBP CHF CAD AUD HKD HKD 7.7668 10.137 0.0898 12.185 7.4597 7.5424 7.0223 AUD 1.106 1.4435 0.0128 1.7352 1.0623 1.0741 0.1424 CAD 1.0298 1.344 0.0119 1.6155 0.989 0.931 0.1326 CHF 1.0412 1.3589 0.012 1.6334 1.0111 0.9414 0.1341 GBP 0.6374 0.8319 0.0074 0.6122 0.619 0.5763 0.0821 JPY 86.47 112.86 135.66 83.052 83.972 78.182 11.133 EUR 0.7662 0.0089 1.2021 0.7359 0.7441 0.6928 0.0987 USD 1.3052 0.0116 1.5689 0.9605 0.9711 0.9042 0.1288 Bloomberg