Asian Markets retracts sharply

Disappointing corporate earnings and dismal economic data weighs regional indices lower

Stock markets in the Asian region retracted sharply by closing last day of the week on lower side aggregating the weekly losses. Markets across the region were haunted by the negative cues overnight from Wall Street accompanied by the disappointing corporate earnings results and dismal economic data that pointed to a deepening global recession dragged stocks lower.

On the Wall Street, the Dow Jones Industrial Average ended lower by 106 points at 8,122, the Nasdaq closed lower by 42 points at 1,465 and the S&P 500 closed lower by 13 points at 827.5 on Thursday, 22 January 2009.

In the commodity market, crude oil fell after U.S. stockpiles rose more than four times forecast last week, raising concern of an oversupply as the global recession deepened. Supplies of crude oil in the U.S. rose 6.1 million barrels to 332.7 million last weeks, the highest since August 2007, the Energy Department said yesterday.

Crude oil for March delivery fell as much as $1.28, or 2.9%, to $42.39 a barrel in electronic trading on the New York Mercantile Exchange. It was at $42.56 a barrel at 4:24 a.m. eastern time.

Brent crude oil for March settlement fell as much as 95 cents, or 2.1%, to $44.44 a barrel on London's ICE Futures Europe exchange. The contract rose 37 cents, or 0.8%, to settle at $45.39 a barrel yesterday.

Gold prices fell $2.30 an ounce, or 0.27%, to $852.5 in Asian electronic trading on Friday after finishing higher on Thursday as traders flocked to the precious metal as a hedge amid economic turmoil. Gold for February delivery ended the session at $858.80 an ounce, up $8.70 for the session. Earlier in the day, the precious metal hit as low as $844.40.

In the currency market, the U.S. dollar strengthened against the Australian dollar, New Zealand dollar, South Korean won, the Singapore dollar while it weakened against the Japanese yen.

In late Tokyo trades, the Japanese yen continued to showed strength against the major currencies on Friday. The Japanese yen was quoted at 88.2190 against the US dollar, down from Thursday's quote of 88.93 yen.

The Hong Kong dollar was trading at HK$ 7.7575 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In late Sydney trades, the Australian dollar was trading at US$0.6440 up from Thursday's close of US$0.6554.

In late Wellington trades, the New Zealand dollar was buying US$0.5204, down compared to US$0.5265 at close on Thursday.

In late Seoul trades, the South Korean won was trading at 1,394.50 won to the U.S. dollar, down by 14.4750 won from Thursday's close of 1,380.025 won.

In Taipei, the Taiwan dollar strengthened against the US dollar as it was trading at NT$ 33.56 in the afternoon trade against the Thursday closing of NT$ 33.58.

The Singapore dollar finished at 1.5070 against the previous close of 1.4978 while the Malaysian Ringgit closed Friday's deals at 3.6248.

In Manila, the Philippines peso strengthened against the dollar. Currently, the dollar-peso pair is worth 47.4050, compared to 46.55 hit in the early trade.

Coming back in equities, the Japanese stock markets reversed yesterday's gains to finish the session lower hitting two months low on concerns over corporate earning and global economic outlook. The losses consolidated after the exporters and technology shares weighed the index down after Sony Corporation forecast an annual operating loss and firmer yen against major currencies. Banks and financials tanked following a fall in U.S. shares overnight.

The Nikkei 225 Stock Average index tumbled 306.49 points, or 3.8%, to 7,745.25, while the broader Topix fell 22.36 points, or 2.8%, to 774. In a week, the Nikkei 225 stock average lost 484.9 points, or 5.89%, while the broader Topix erased 44 points, or 5.38%.

On the economic front, the Ministry of Economy, Trade and Industry said an index measuring all industrial activity in Japan was down 2.3% in November compared to the previous month. The Bank of Japan said economic conditions have been deteriorating significantly in Japan and expects exports to decrease on slowing overseas economies and the appreciation of the yen. Production is forecast to fall due to the growing adjustment pressures on inventories and weakening demand.

In Mainland China, the Shanghai stock index finished the session lower on worries over negative earnings announcements. Investors also booked profit over the uncertainty of the overseas markets and its impact the local bourses after they are reopened in early February after the Chinese New Year holiday.

The benchmark Shanghai Composite Index erased 14.29 points, or 0.7%, to 1,990.657. The benchmark Shanghai Composite Index has gained 36.22 points, or 1.85%, in a week, while in January 2009 the index added 169.85 points, or 9.33%.

In Hong Kong, the markets finished the session lower in thin trade ahead of a five-day break for Chinese new year and on worries over negative earnings announcements, with gains in heavyweight HSBC and mainland banks helping the main index come off early lows following Wall Street's overnight slump.

The Hang Seng Index fell 79.39 points, or 0.6%, to 12,578.6. The Hang Seng index lost 676.91 points, or 5.11% in a week. In January 2009, the index tumbled 1,808.88 points, or 12.57%.

In Australia, stock market reversed yesterday's gain to finish the session to a near five-year low, as index was dragged down by miners, materials and resources, industrials, and energy on pullback in base and industrial metal prices following concerns about weaker demand for metals from China, Japan, and South Korea, while financials and properties plummeted on negative lead from Wall Street and concerns about the health of global financials and economic outlook.

The benchmark S&P/ASX200 plummeted 144.1 points, or 4.13%, to 3,342.7, while the broader All Ordinaries slipped 131.60 points, or 3.83%, to 3,300.30. In a week, the S&P/ASX200 has lost 208.20 points, or 5.86%, while All Ordinaries erased 194.6 points, or 5.38%.

Equities on the New Zealand stock market ended the last trading session of the week on Friday in the negative region. The NZ share market slipped during early trade as the benchmark index was down 18.06 points to 2716.35 after rising almost 29.4 points yesterday. The NZX50 recovered yesterday to end its three-day losing streak.

The benchmark NZX50 dropped down 1.07% or 29.325 points to close at 2705.086. While 7 stocks rose, 25 stocks dropped and 18 remained unchanged. The NZX 15 slipped 0.81% or 40.425 points to 4956.505.

On the economic front, as per Bank of New Zealand-Business NZ, the manufacturing index for the month of December was (42.5), increasing 7.3 points from November. The figure, however, was still the second lowest recorded value since the survey began in 2002. It was also the lowest December results recorded, with value below the 2005 result. The final results for 2008 showed that 9 of the 12 months showed contraction in manufacturing, with eight consecutive values below 50.

In South Korea, stock markets fell following the overnight losses from Wall Street. Disappointing corporate earning report added more gloom in the sentiments as Samsung Electronics, the largest stock by market cap, dropping after reporting weak quarterly results, while LG Electronics fell for a fourth straight session on outlook fears. The Korea Composite Stock Price Index closed down 22.83 points or 2.05% closing the day at 1,093.40. For the week the index lost 3.68% or 41.8 points.

In Singapore also markets reversed yesterday's gains to finish the session lower on following the negative lead from Wall Street and over the health of domestic economy after Singapore's government sharply reduced its economic outlook for 2009. Manufacturing and multi industry were leading the decliners. The benchmark Straits Times Index lost 23.54 points, or 1.38%, to 1,685.23. The index has lost 45.22 points, or 2.61%, in a week.

In Philippines, the stock market reversed yesterday's gains, closing the week marginally lower, weighed down by the losses in index-linked counters as investors became anxious by the overnight losses on Wall Street. Financial, mining & oil and holding firms indices lost the most, yanking the composite index lower. However, a strong show of strength by the industrial and the property indices gave some support to the benchmark index. The benchmark index PSEi tumbled 0.33% or 6.18 points to 1,857.34, while the All Share index lost 0.49% or 6 points to 1,202.41.

In India, key benchmark indices faltered to day's low in mid afternoon trade as European indices saw a subdued start tracking global cues. Realty, metal and banking stocks extended losses. As per the provisional figures, the BSE 30-share Sensex was down 139.49 points, or 1.58%, to 8,674.35. The S&P CNX Nifty fell 1.30%, to 2,678.55 as per the provisional figures.

Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.72% or 6.33 points to 872.69, while Indonesia's Jakarta composite decreased by 11.74 points or 0.88% closing the day at 1,315.58. In Thailand, the Thai Stock exchange fell 4.75 points or 1.05% to 433.52. Stock markets in Taiwan were closed for holiday.

In other regional market, European shares declined on Friday, with losses for oil producers and financials offsetting gains in the pharmaceutical sector. On a national level, the U.K. FTSE 100 index declined 0.5% to 4,033.53 and the French CAC-40 index fell 0.5% to 2,856.17. The German DAX 30 index lost 1% to 4,176.36.