Asian Markets Remains Subdued

Nikkei Recoup Holiday Losses While Sydney, Shanghai, Sensex Falter Further

Stock market in Asian region continued to trade lower on Thursday 12 February 2009, as investors remained doubtful about the US economic stimulus plan. A rate cut from Bank of Korea and crude oil sliding below 4 week low failed to cheer the sentiments in the regional investors.

Wall Street managed a modest and decent end on Wednesday after Tuesday’s huge sell-off that rattled investors. As per latest reports in the market, the stimulus plan now totals $789.5 billion, and is on track for vote later this week. The impression that the Senate and House have agreed on the terms of a $789.5 billion economic stimulus bill spurred stocks higher.

After opening 74 points higher earlier in the day, The Dow Jones Industrial Average ended higher by 50 points at 7,939, the Nasdaq closed higher by 6 points at 1,30 and the S&P 500 closed higher by 6.5 points at 833.

In the commodity market, crude oil was breached its four week low by trading below $36 a barrel as a U.S. government report showed a bigger-than-expected increase in inventories.

Crude oil for March delivery was at $35.72 a barrel, fell 0.22 cents, at 9:40 a.m. London time on the New York Mercantile Exchange. Yesterday, oil fell $1.61, or 4.3%, to $35.94 a barrel in New York, the lowest settlement since 15 January 2009.

Brent crude oil for March settlement was at $44.93a barrel, up 65 cents, on London’s ICE Futures Europe exchange at 9:40 a.m. London. The contract expires today. The more-active April future was at $46.05 a barrel, up 73 cents, at 1:22 p.m. Singapore time.

Gold prices eased $6.10 an ounce, or 0.65%, to $938.40 in Asian electronic trading on Thursday after gold for February delivery ended up $30.10, or 3.3%, at $943.80 an ounce on the Comex division of the New York Mercantile Exchange, the loftiest closing level for a front-month gold future since July. Trading more actively, the April contract rose 3.3% to $944.50 an ounce.

In the currency market, the U.S. dollar weakened against the Japanese yen, Hong Kong Dollar while it strengthened against New Taiwan Dollar, the Australian dollar, New Zealand dollar, Singapore dollar, Indonesian Rupaih, Indian Rupee and Chinese Yuan, Philippines peso, Malaysian Ringgit and South Korean won.

In late Tokyo trades, the Japanese yen strengthened against the dollar. The Japanese yen was quoted at 89.9350 against the US dollar, down from yesterday’s quote of 90.4156 yen.


The Hong Kong dollar was trading at HK$ 7.7516 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 Sydney trades, the Australian dollar was closed at US$0.6472 down from yesterday's close of US$0.6562.

In Wellington trades, the NZ dollar ended the day at US52.58c from US52.37c yesterday.

The South Korean won was closed at 1,403.50 won to the U.S. dollar, up from yesterday's close of 1,391.30 won.

The U.S. dollar was higher against the New Taiwan dollar in Taipei today. The greenback was trading at NT$34.02, up NT$0.03 from Wednesday's closing of NT$ 34.05.

The Philippines peso weakened against the greenback. The dollar peso pair is currently trading at 47.1700 compared to Wednesday's closing value of 47.06.

Coming back in Asian equities, the stock markets in Japan, China, Taiwan, South Korea, Hong Kong, Thailand, Singapore, Malaysia and India closed the day on a lower note while Australia, New Zealand, Indonesia, and Philippines closed the day on a higher note.

In Japan, stock market finished the session sharply lower, on broad based losses across the major sectors after a public holiday, on the back of a stronger yen against greenback and on disappointment over a U.S. bank rescue plan. The Nikkei 225 Stock Average index tumbled 240.58 points, or 3%, to 7,705.36, while the broader Topix eased 17.81 points, or 2.3%, to 760.

On the economic front, the Bank of Japan said prices for domestic corporate goods eased 0.2% on year in January, following the 1.1% on year gain in December. On a monthly basis, wholesale prices fell 1.0% after the 1.2% contraction in December.

In Mainland China, the stock index finished the session bluer, extending losses for the second day in row, with decline in the shares of energy, non-ferrous, steelmakers, and other metal issues after commodity prices plummeted on yesterday. Banks and financials tumbled on disappointment over the economic stimulus and financial bailout rescue plans in the United States. Shipping closed higher after receiving a government stimulus measures. The benchmark Shanghai Composite Index tumbled 12.72 points, or 0.6%, to 2,248.09.

On the economic front, the National Development and Reform Commission said Chinese urban property prices fell by 0.9% in January from a year earlier. On month-on-month basis, the decline was 0.2% in January, softer than the 0.5% fall in December. The People’s Bank of China said banks extended 1.62 trillion yuan ($237 billion) of new local-currency loans in January and M2, the broadest measure of money supply, climbed 18.8% from a year earlier.

In Hong Kong, the markets followed the Chinese indices extending losses for second day in row, with steep declines in banks and financials and property developers on disappointment over economic stimulus and financial bailout rescue plans in the United States. The Hang Seng Index plummeted 305.89 points, or 2.3%, to 13,228.30, while the Hang Seng China Enterprise Index tumbled 232.01 points, or 3.05% to 7,367.56.

In Australia, the stock market finished the choppy session with a gain, supported by broad based advance from most of the major sectors on a stronger-than-expected jobs report, firm lead from Wall Street, and the expected Senate vote on the government’s second stimulus package. The benchmark S&P/ASX200 climbed up 39.90 points, or 1.15%, to 3,514.30, while the broader All Ordinaries added 40.40 points, or 1.18%, to 3,458.50.

On the economic front, the Australian Bureau of Statistics said in a statement that the jobless rate soared to 4.8% in January, up from 4.5% in December. Business confidence in Australia sank 24 points to post a score of -31 in the fourth quarter of 2008, according to a survey released Thursday by the National Australia Bank.

In New Zealand, shares gained slightly following the overnight gain on Wall Street, after dipping for three sessions in a row. The benchmark NZX50 inched up 0.73% or 19.921 points to close at 2750.146. However, the NZX 15 was up 0.90% or 45.349 points to 5095.063.

Stock market in South Korea extended falls despite for the third session, despite of the South Korean central bank cutting interest rates to a new record low, as investors became more worried about the deepening economic slowdown. The Korea Composite Stock Price Index fell 10.34 points or 0.87% closing the day at 1,19790.84.

On the economic front, the Monetary Policy Committee (MPC) of the Bank of Korea decided today to lower the Base Rate by 50 basis points from 2.50% to 2.00% - the sixth cut in four months. The committee also lowered the interest rate on Aggregate Credit Ceiling Loans by 25 basis points from 1.50% to 1.25%.

In the accompanying statement the committee discussed the fact surrounding the decision. “The pace of the domestic economic slowdown has accelerated. Domestic consumption and investment have slackened off further and exports have decreased rapidly. There is considered to be a greatly deepened downside risk to economic growth, which has been heightened by the worsening worldwide slump and the likelihood of the credit crunch persisting,” the statement discussed.

In Singapore, the stock finished the session lower, with steep declines in banks and financials, properties, and manufacturing issues on disappointment over economic stimulus and financial bailout rescue plans in the United States. Investors’ sentiments remain fragile on concerns about its economy outlook after domestic players posted huge losses in their profits during the fourth quarter of 2008. The benchmark Straits Times Index dropped 30.74 points, or 1.79%, to 1,691.23.

On the economic front, the International Enterprise (IE) Singapore announced a S$4.2-billion ($2.78 billion) financing scheme that is projected to generate S$14.4 billion worth of trade and S$1.6 billion worth of overseas investments this year.

The stock market in Taiwan snapped its four days of winning streak, as leading DRAM makers fell despite government announcement of plans to consolidate the sector. The main Taiex share index slumped 109.53 points or 2.39% at 4,466.42, the lowest closing since 5 February 2009.

On the economic front, tax revenue received by the government amounted to NT$74.7 billion i.e.US$2.2 billion in January 2009, a decrease of 40.1% from January 2008. According to statistics released by the Ministry of Finance the fall, the largest monthly decline since March 2007 was mainly the result of the economic downturn and a decrease in workdays because of the Lunar New Year holiday, said Lin Li-chen, chief of the ministry's Department of Statistics.

In Philippines, the stock market reversed its two days of losses, closing the day higher, as investor sentiments were supported by gains on the Wall Street overnight, which in turn led to buying of key heavyweight stocks. The benchmark index PSEi augmented 1.38% or 26.35 points to 1,924.10, while the All Shares index rose 1.47% or 18.14% to 1,245.09.

In India, Sustained selling in index pivotal throughout the day kept key benchmark indices depressed throughout the day. The BSE 30-share Sensex provisionally lost 152.71 points, or 1.59% closing the day at 9456.83. The S&P CNX Nifty lost 32.65 points, or 1.12%, to 2,893.05 as per provisional closing

On the economic front, India’s industrial production contracted 2% in December 2008 as compared to 8.6% growth a year earlier. The fall was led by a led by a 2.5% contraction in the manufacturing output. The mining output for the month was up 1% as compared with 5% a year earlier.

In other release, inflation based on the whole sale price index rose 4.39% the year through 31 January 2009, much lower than previous week's annual rise of 5.07%, government data released at noon today showed.

Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.28% or 2.47 points to 894.60, while Indonesia’s Jakarta composite increased by 0.60 points or 0.05% to 1,325.42. In Thailand, the Thai Stock exchange fell 3.47 points or 0.78% to 440.63.

In other regional market, European shares fell Thursday for the third session in a row, with oil producers lower on a slumping oil price and companies such as BT Group and EdF falling after reporting lower profits. On a national level, the French CAC-40 index declined 1.4% to 2,984.56, the German DAX 30 index dropped 1.5% to 4,463.83 and the U.K. FTSE 100 index fell 1.3% to 4,180.71.