Asian stock markets were mostly flat yesterday Friday September 30 as cautious traders were unimpressed by strong US growth data and news the German parliament had approved a crucial EU bailout package.
Tokyo, Sydney and Seoul closed flat, after German backing for a beefed-up rescue fund for debt-mired eurozone countries failed to soothe investor fears.
Tokyo stocks closed down 0.01 percent in directionless trade with the benchmark Nikkei 225 index losing 0.94 points to 8,700.29.
The broader Topix index of all first section shares lost 1.13 points to 761.17.
Standard & Poor’s and Fitch Ratings both downgraded New Zealand’s sovereign rating, citing the cost of earthquake recovery and the country’s worsening external debt position. The New Zealand dollar fell sharply.
Yutaka Miura, senior technical analyst at Japan’s Mizuho Securities, said the Nikkei’s struggle to find direction may have been because Germany’s bailout vote had already been priced in.
“Short-covering at the September month-end, which also coincides with the quarter’s end, has been the main driver for the market’s rebound in recent days,” he said, adding that selling pressure may increase going into next week.
In cautious trade Australia’s S&P/ASX 200 closed 0.01 percent higher with the benchmark S&P/ASX 200 up just 0.3 points at 4,008.6.
South Korea’s KOSPI Composite Index closed up a marginal 0.36 points at 1,769.65. Financial markets in both countries will be closed Monday for a public holiday.
HONG KONG: Shares fell 2.32 percent yesterday as traders remained cautious despite solid US growth data and German parliament approval of a crucial EU bailout package.
The benchmark Hang Seng Index lost 418.65 points to end at 17,592.41 on turnover of HK$90.44 billion.
Traders were unimpressed by news that the US economy had grown at 1.3 percent in the second quarter and German backing for a beefed-up rescue fund for debt-mired eurozone countries, analysts said.
SINGAPORE: The Straits Times Index slipped 1.2 percent to 2,675.16 at the close, extending this week’s losses to 0.9 percent.
Among the most active stocks in the market, Cosco Corp Singapore dropped 1.1 percent to 93 Singapore cents and CapitaMalls Asia gained 1.7 percent to S$1.22.
Meanwhile, Koon Holdings, a construction company, surged 9.1 percent to 24 Singapore cents.
KUALA LUMPUR: After two weeks of sharp technical pullbacks, share prices on Bursa Malaysia rebounded over three of the five trading days during the week. The local market closed higher for the week ended yesterday.
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) posted a week-on-week gain of 21.19 points, or 1.55 percent. It stayed below its overhead resistance of 1,400 over the week.
In other markets:
* Taipei rose 42.77 points, or 0.6 percent, to 7,225.38. Smartphone maker HTC was up 0.88 percent at T$685.0 while Taiwan Semiconductor Manufacturing Corporation was 0.43 percent lower at T$70.0
* Manila gained 122.02 points to 3,999.65. Top-traded Alliance Global Group climbed 3.09 percent to 9.35 pesos, while Philippine Long Distance Telephone added 1.76 percent to 2,198 pesos.
* Jakarta rose 11.85 points or 0.34 percent to 3,549.03.
* Mumbai slid 1.46 percent or 244.31 pointsto 16,453.76. The world’s largest coal mining firm state-run Coal India fell 5.15 percent to 332.75 rupees while Sterlite Industries lost 4.05 percent at 113.8
EUROPE: European shares opened lower yesterday, on track to record their worst quarterly performance since late 2008, as markets grapple with slowing global growth and a long-running eurozone sovereign debt crisis.
At 0740 GMT, the FTSEurofirst 300 index of leading European shares was down 0.5 percent at 928.41 points.
Meanwhile, London’s FTSE 100 index of leading shares slid 1.04 percent to 5,143.29 points in late morning trade, Frankfurt’s DAX 30 shed 1.74 percent to 5,539.79 points and in Paris the CAC 40 shed 1.03 percent to 2,996.05 points.
“European stocks have run out of steam and are following Asian stocks lower,” said Kathleen Brooks, analyst at trading group Forex.com.
AMERICA: The worst quarter for the stock market since the financial crisis ended on another down note.
Stocks fell broadly Friday on fresh signs that Europe’s debt problems and the U.S. economy continue to languish. Makers of raw materials, industrial companies and banks — which would have the most to lose if the economy turns sour — had the biggest losses.
The Dow Jones industrial average dropped 240.60 points, or 2.2 percent, to 10,913.38. Hewlett-Packard Co. fell the most of the 30 stocks in the average, 5.6 percent. Aluminum maker Alcoa Inc. was close behind with a 4.9 percent decline. JPMorgan Chase & Co. fell 4.1 percent.
The broader S&P 500 index shed 28.98, or 2.5 percent, to 1,131.42. All 10 industry groups in the S&P 500 index fell.
The Nasdaq composite index fell 65.36, or 2.6 percent, to 2,415.40.
Markets have been wracked this summer by growing fears about a possible default by Greece and the increasing likelihood of a global recession. Uneven economic data have touched off sudden bouts of buying and selling. The Dow, S&P 500 and Nasdaq each lost more than 12 percent this quarter, the first time that’s happened since the financial crisis crested at the end of 2008.
The S&P 500, the benchmark for most U.S. stock mutual funds, has lost 14.3 percent since July 1, the start of the third quarter. That’s the biggest quarterly drop since the three months ended Dec. 31, 2008, when global financial markets seized up. Excluding that period, the S&P has not dropped that much in a quarter for nine years. The Dow dropped 1,500.96 points, or 12.1 percent, over the same time frame.
“The market has really seen some damage this quarter,” said Mike Hurley, portfolio manager of Highland Trend Following Fund.
The weakness appears to be the start of a longer decline, Hurley said, because bonds are increasing in value and interest rates are low. Traders also are selling commodities such as oil, which would lose value in an economic downturn.
“Lower interest rates and commodity prices are definitely an indication that the market thinks economic activity is going to be weak,” Hurley said.
Stocks in France, England and Germany fell on the latest signs of discord among European leaders. Germany and France proposed managing the region’s shared currency through meetings of national leaders, rather than by centralized institutions. The head of the European Commission balked at the proposal.
Persistent squabbling over financial policy has been a major obstacle to achieving a lasting solution to Europe’s debt crisis. France and Germany, the currency union’s strongest economies, want countries to coordinate their spending and borrowing more closely. Other countries see that as a threat to their sovereignty.
Many European leaders and traders believe Greece will default in the coming weeks or months. Greece’s lenders and neighbors are preparing as best they can to prevent that from causing a worldwide financial panic.
As a result, traders have reacted strongly to news and rumors out of Europe about how the crisis is being addressed. Markets gyrated wildly this summer in some of the most volatile trading on record. The Dow Jones industrial average swung more than 100 points in more than half of the trading days this quarter.
Traders also have made big moves in response to U.S. economic data, which has mostly suggested a slowdown. A recession in the U.S. looks increasingly likely, mainly because of Europe’s struggles and signs of weakness in developing countries like China that have been driving global economic growth.
The government said Friday U.S. consumers spent slightly more in August, but earned less for the first time in nearly two years. That suggests that people are tapping their savings to pay for costlier gasoline and to offset lost wages. The savings rate fell to its lowest level since late 2009.
Micron Technology Inc. plunged 14 percent, the most of any company in the S&P 500 index, after the chipmaker disappointed investors with a quarterly loss. Analysts had expected a profit. Sales were hurt as the company transitions to selling a newer array of memory chips.
Ingersoll-Rand dove 13 percent after cutting its profit forecast for the third and fourth quarters. The machinery maker said North American sales of climate-control and security products have been weaker than expected.
Bank of America Corp lost 3.6 percent after Warren Buffett told Bloomberg Television that the bank’s problems will take longer than a year to clean up.
Four stocks fell for every one that rose on the New York Stock Exchange. Volume was above average at 4.7 billion shares.
Benchmark Currency Rates USD EUR JPY GBP CHF CAD AUD HKD HKD 7.7856 10.4229 0.1010 12.1327 8.5727 7.4123 7.5222 - AUD 1.0350 1.3856 0.0134 1.6129 1.1397 0.9854 - 0.1329 CAD 1.0503 1.4062 0.0136 1.6368 1.1565 - 1.0148 0.1349 CHF 0.9082 1.2158 0.0118 1.4153 - 0.8646 0.8775 0.1166 GBP 0.6417 0.8591 0.0083 - 0.7066 0.6109 0.6200 0.0824 JPY 77.0625 103.167 - 120.091 84.8538 73.3684 74.4555 9.8981 EUR 0.7470 - 0.0097 1.1640 0.8225 0.7112 0.7217 0.0959 USD - 1.3388 0.0130 1.5584 1.1011 0.9521 0.9662 0.1284 Bloomberg