Asian markets ends mixed

Hang Seng, Shanghai retreat while Sensex gave up yesterday's losses

Stock market in Asian region showed mixed trend on Tuesday, 7 July 2009 amid choppy movements following a mixed close on Wall Street. With concerns over the state of global economy continuing to weigh in to a marked extent, participants are rather wary of holding positions at higher levels even as a section of them appear to be evincing keen interest in going in for some bargain hunting at declines.

On Wall Street, consumer staples stocks and an upgraded American Express helped to pull two of three major indices into the green Monday after a drop in oil and economic worries discouraged investors early on. The Dow Jones Industrial Average was higher by 44.13 points, or 0.5%, at 8324.87, while the S&P 500 gained 2.3 points, or 0.3%, to 898.72. The Nasdaq Composite declined 9.12 points, or 0.5%, to 1787.40.

In the commodity market, crude oil traded near a five-week low on a stronger dollar and concerns that slow fuel consumption will lead to an increase in stockpiles.

Crude oil for August delivery was at $64.23 a barrel, up 17 cents, or 0.3%, at 1:42 p.m. Singapore time on the New York Mercantile Exchange. Yesterday, the contract fell $2.68, or 4%, to $64.05, the lowest settlement since 27 May 2009.

Brent crude oil for August settlement traded at $64.36 a barrel on London’s ICE Futures Europe exchange, up 31 cents, or 0.5%, at 1:37 p.m. in Singapore.

Gold, little changed in Asia, may gain from a two-week low as crude oil stemmed a decline and the dollar rally halted. Gold for immediate delivery traded at $925.98 an ounce at 8:43 a.m. in Singapore. Gold for August delivery on the Comex division of the New York Mercantile Exchange was at $925.90.

Bullion fell to $920.75 an ounce yesterday, the lowest since June 23, as oil led a drop in commodities on concern the global economic recovery will falter, damping demand for the precious metal as an inflation hedge.

In the currency market, major currencies recover against dollar and yen as markets stabilize following yesterday's late recovery in US stocks.

The Japanese yen strengthened against major currencies on Tuesday in Asia after European finance ministers said risks to the recovery remain, spurring demand for the relative safety of Japan’s currency. The Japanese currencies were quoted at 95.1 against the US dollar, 132.47 against euro, and 154.02 against British pound.

The Hong Kong dollar was trading at HK$ 7.7502 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 trade, the Australian dollar firmed on Tuesday after the Reserve Bank sounded slightly more upbeat in its latest policy statement, where it kept interest rates unchanged at a record low of 3 per cent as expected.

At the local close, the dollar was trading at $US0.7960, up from Monday's close of $US0.7912. During the domestic session, the unit moved between $US0.7944 and $US0.7993.

In Wellington trades, the New Zealand dollar fell to a three-week low against the greenback overnight, but then charged ahead. By 8am the kiwi was buying US63.67c, having fallen to around the US62.40c area from US62.80c at 5pm yesterday. The NZ dollar also fell to its lowest level in nearly six weeks against the Japanese currency, dropping as low as 59.30 yen early today before racing up to 60.70 yen at the local open from 59.95 at yesterday's local close.

The South Korean won finished at 1,273.1 won to the U.S. dollar, down 4.6 won from Monday's close, as an absence of major news led it to trade in a tight range

The Taiwan dollar weakened further against the greenback. The Taiwan dollar fell against the US dollar as it was trading lower at NT$ 32.9890, down by NT$ 0.0010 from Monday’s close of NT$32.9880.

Coming back in equities, Asian equity markets ended mostly lower as weaker metal and oil prices dragged on commodity and shipping related stocks.

In Japan, the stock market tumbled extending losses for fifth consecutive day, as investor’s remains on doubts over a potential rebound in the global economy. Marine transportation, automakers, and other export oriented shares plummeted as shipping rates slumped and the rising yen dimmed earnings prospects for the exporters. At the closing bell, the Nikkei 225 Stock Average index erased 33.08 points, or 0.3%, to 9,647.5, while the broader Topix index fell 3.29 points, or 0.4%, to 909.

On the economic front, Japan’s Ministry of Finance said the official reserve assets totaled $1.019 trillion at the end of June, representing a decline of $4.84 billion from May. In June, the foreign currency reserves amounted to $988.5 billion, while the reserves with the IMF totaled $ 4.3 billion. The gold reserves stood at $22.9 billion, while the SDRs amounted to $2.97 billion.

In Mainland China, stock index plummeted snapping five days of winning streak, on the back of losses from properties amid worries recent gains had outpaced profit expectations, while resource related shares plunged as pullback in commodities prices and on news copper imports into China might fall 64% in the second half. The Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, tumbled 1.13%, or 35.21 points, to 3,089.45, while the Shenzhen Component Index melted 1.02%, or 127.48 points, to 12,362.44.

On the economic front, China's central bank plan to drain 170 billion Yuan ($24.9 billion) from the money market on Tuesday through short-term bond repurchase agreements. The operation comprises 90 billion Yuan via 28-day repos and 80 billion Yuan via 91-day repos. A total of 260 billion Yuan in central bank bills and repos is due to mature this week. Last week, the central bank injected a net 31.5 billion yuan into the market.

In Hong Kong, the stock indices tumbled on tracking negative cues from Shanghai bourses. Shares of property developers dragged down the market amid worries recent gains had outpaced profit expectations and on concern regulators will crack down on mortgage lending to cool growth in home prices.

Banks stumbled after the nation’s banking regulator said rapid credit growth poses a risk to lenders. Falling commodities and oil prices weighed down resources related shares. The Hang Seng Index melted 117.14 points, or 0.65%, to 17,862.27, while the Hang Seng China Enterprise Index retracted 152.95 points, or 1.41%, to 10,674.67.

In Australia, the stock market drifted lower extending losses for third consecutive days on tracking negative lead from Wall Street and pullback in commodities prices. Materials and resources and energy shares hardest hit on a morning on the back of drop in base metal and crude oil prices. Shares of properties and other economically sensitive stocks were also below the line fell as investors turned cautious ahead of the upcoming company earnings reporting season.

At the closing bell, the benchmark S&P/ASX200 index stumbled 16.8 points, or 0.44%, to 3,766.9, meanwhile the broader All Ordinaries tumbled 16.4 points, or 0.43%, to 3,767.8.

On the economic front, the Australian Industry Group-Housing Industry Association performance of construction index dropped for the 16th consecutive month in June. The PCI shed 4.3 points to 42.6. The Reserve Bank of Australia retained its cash rate at 3% as expected for third straight month. The official cash rate now stands at its lowest level in 49 years.

In New Zealand, equities edged forward ending its four-day losing streak. The New Zealand share market edged slightly higher in early trading today, after Wall Street ended its session on a firm note. the NZX50 edged up 0.12% or 3.26 points to 2746.24. The NZX 15 added 0.28% or 14.07 points to close at 5068.63

On the economic front, New Zealand business activity is rebounding slightly according to NZIER. New Zealand businesses are less pessimistic than they have been in the past six months, said Jean-Pierre de Raad, chief executive of NZIER, as reported in the latest NZIER Quarterly Survey of Business Opinion (QSBO). According to the survey, fewer businesses expect a reduction in their own trading activity in the next three months. The recession is not over yet. These latest data do not alter the view of a continued contraction until the December quarter.

Meanwhile, the Reserve Bank of Australia board has kept interest rates unchanged at 3 percent. The decision was widely expected. It means that rates across the Tasman - unusually - remain higher than those in New Zealand. Here the Official Cash Rate is 2.5 percent. RBA Governor Glenn Stevens reiterated his view that the global economy is stabilising, after a sharp contraction in demand during the December and March quarters.

In South Korea, stocks finished higher as investors snapped up electronics shares amid rising expectations for second-quarter earnings. The benchmark Korea Composite Stocks Price Index (KOSPI) added 5.26 points to end at 1,434.20.

On the economic front, the International Monetary Fund (IMF) Tuesday revised up its 2009 growth outlook for South Korea, forecasting that its economy will contract 3 percent as the government's rapid and comprehensive" stimulus measures helped limit its downturn. In April, the IMF forecast that the economy would undergo a 4 percent contraction. The latest outlook is still worse than the government's projection of minus 1.5 percent growth for this year.

In Taiwan, stock market trespassed one month high, as technology shares on better-than-expected second-quarter earnings. The main Taiex share index gave up yesterday’s losses as the Taiex index stepped up 65.31 points or 0.98%, closing the day at 6715.22, strongest closing since last 6 June 2009 when market closed at 6856.74.

In Philippines, the stock market continued to take an uphill for a second consecutive day, closing almost 1% higher, as investors became optimistic following the benign inflation data on the local inflation front, which seemingly augured well from the point of view of the domestic markets. Philippines CPI rose at their slowest pace in more than 22 years in June, prompting the central bank to reiterate its monetary easing thrust. At the final bell, the benchmark index PSEi mounted 0.92% or 22.66 points to 2,471.76, while the All Shares index rose 0.89% or 13.98 points to 1,582.80.

In India, the key benchmark indices snapped yesterday’s nearly 6% post-budget losses on a view that the Union Budget 2009-2010 will aid a recovery in the economy The BSE 30-share Sensex was up 127.05 points or 0.90% to 14,170.45. The S&P CNX Nifty was up 36.45 points or 0.88% to 4,202.15.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.05% or 0.53 points to 1066.36 while Indonesia’s Jakarta composite index ended the day higher at 2083.25.

In other regional market, shares in Europe shook off some early uncertainty on Tuesday to trade higher for the first time in four sessions, helped by gains for metal stocks and banks. Of regional equity markets, the commodity-heavy U.K. FTSE 100 index advanced 0.8% to 4,227.25, the German DAX index rose 0.6% to 4,680.29 and the French CAC-40 index traded up 0.5% at 3,098.38.