Downward Ride Continues In Asian Markets

Hang Seng, Nikkei Follows Market Trend While Shanghai Stand Aside With Gains

Asian markets were broadly lower, with indexes in Hong Kong and Australia declining for a fourth straight session on weakness in banking stocks. Trading volumes were thin in most markets as investors stayed on the sidelines ahead of the U.S. Federal Reserve's decision on interest rates scheduled to release tomorrow.

In Hong Kong, the Hang Seng Index fell 1.1% to 22,456.02 and the Hang Seng China Enterprises Index gave up 1.8% to 12,018.51. In Sydney, the S&P/ASX 200 index recorded a marginal gain of 0.1% gaining to 5,290 as lot of poor performing stock are being closed out as the financial year in Australia come to an end on 30 June 2008.

Chinese shares in Shanghai wavered between positive and negative zones, as bargain-buying in airline and insurance stocks after a string of recent losses was countered by losses in Baoshan Iron & Steel Co., after the steel maker agreed to an 85% price increase on iron ore supplies from Rio Tinto. At the end of day the Shanghai Composite gained 1.5% to 2,803.02, bouncing off from the day's low at 2,728.83. The Shenzhen Composite rose up by 2.8% reaching 801.50 levels.

In Tokyo, shares continued slipping on high crude-oil prices and weakened yen. At the closing bell the Nikkei 225 Average was marginally down by 0.1% closing at 13,849.56, while the broader Topix index gained 0.1% to 1,349.19.

Elsewhere, South Korea's Kospi shed 0.3% to 1,710.84, New Zealand's NZX 50 index rose 0.3% to 3,298.02, Singapore's Straits Times Index lost 0.4% to 2,968.46 and Taiwan's weighted index dropped 1.8% to 7,738.12.

Malaysia's KLSE Composite gained by 0.4% to 1,200.28 while the Thailand's SET was marginally down by 0.5% at 546.33.

In the afternoon trading India's Sensitive Index, or Sensex, was down by 1.2% to 14,125.49 and the broader S&P/CNX Nifty fell by 1.5% to 4,200.55.

In Asian currency trading, the U.S. dollar bought 108.07 yen, compared with 107.85 yen late Monday in New York.

Shares of energy producers advanced, as August-crude oil futures rose as much as six cents to $136.80 a barrel in electronic trading, after adding $1.38 to $136.74 a barrel on the New York Mercantile Exchange.

On Wall Street, the Nasdaq Composite fell 20.35 points to 2,385.74 and the Dow Jones Industrial Average slipped 0.33 points to 11,842.36, while the S&P 500 index rose 0.07 points to 1,318.

European shares dragged lower from early highs, pulled down by a second day of notable losses for the auto sector accompanied by negative economic news. In the opening trade the national indexes were trading weaker, with the U.K. FTSE 100 index was marginally up 0.1% at 5,672.80 while the German DAX 30 index down 0.4% at 6,564.40 and the French CAC-40 index down 0.4% at 4,493.98.

On the economic front the day began with a series of negative economic news. The GfK market research institute said its consumer climate index for Germany is forecast to be at 3.9 points in July compared with 4.7 points in June. The GfK also revised down the June figure from the 4.9 points it had forecast last month. GfK said the German consumer climate deteriorated in June, due to continuously rising energy prices and an impending further massive increase in gas prices.

GfK cut its full-year 2008 forecast for German consumer spending growth for the second time this year, to 0.5 % from 1.0 %. In March, it cut its forecast to 1.0 % from 1.5 %.

At 9.22 GMT U.K. FTSE 100 index was back in red falling by 0.8% to 5,620. The German DAX 30 index plunge further by 0.9% at 6,530.77 while the French CAC-40 index down 1.3% at 4,451.92.

Looking ahead the day is scheduled to release some of the key indicators for US. It will start with S&P Shiller home price index that will be followed by consumer confidence data for June. However the focus of the eve will be on Housing price index and Richmond Fed manufacturing index. In the late evening we have Merchandise trade balance data for Japan.