Asian markets witness another mute Monday

Seoul, Taiex tumble by more than 3% while Hang Seng, Nikkei slumped by more than 2.5%

Stock market in Asian region witnessed another mute Monday on 13 July 2009, as most of the regional stock markets ended the day lower, as investor's indulging in heavy selling on concerns over the U.S. economy and corporate earnings. Though most of the markets in the region bounced back after a weak start, but it ended sharply into the red, with investors remaining wary of holding positions at higher levels.

On Wall Street, upgrades in the technology sector helped the Nasdaq on Friday, but the major stock indices recorded losses for the week amid falling oil prices, earnings warnings and an unexpected drop in consumer confidence.

The Dow Jones Industrial Average fell 36.65 points, or 0.5%, to 8146.52, and the S&P 500 shed 3.55 points, or 0.4%, to 879.13. The Nasdaq Composite, however, added 3.48 points, or 0.2%, to 1756.03.

But all three major indices were negative for the week, with the Nasdaq faring the worst. The Dow Jones Industrial Average gave up 1.6%, the S&P 500 lost 1.9%, and the Nasdaq shed 2.3% in the five-day session.

In the commodity market, crude oil fell for a second day as Asian stocks declined, raising speculation that the global recession will sap demand for fuel and increase stockpiles.

Oil for August delivery dropped as much as 97 cents, or 1.6 percent, to $58.92 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $59 a barrel at 2:20 p.m. in Singapore.

Brent crude for August settlement fell as much as 82 cents, or 1.4 percent, to $59.70 a barrel on London's ICE Futures Europe exchange and was at $59.76 at 2:31 p.m. Singapore time.

Gold, little changed in Asia, may gain as the dollar weakened against the euro, boosting demand for the precious metal as an alternative investment. Gold for immediate delivery traded at $914.39 an ounce at 9:36 a.m. in Singapore compared with $913.05 on July 10. Bullion for August delivery on the Comex division of the New York Mercantile Exchange was at $914.

In the currency market, risk aversion continues to be the main driving force in the markets as another week starts. Yen crosses are broadly lower but still manage to hold above last week's low so far. Meanwhile, Aussie, Kiwi and Sterling are hardest hit as usual in this type of market environment, in particular, with Aussie dipping below last week's low against dollar.

The Japanese yen softened against major currencies on Monday. The Japanese currencies were quoted at 92.69 against the greenback.

The Hong Kong dollar was trading at HK$ 7.7503 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 extended losses towards recent lows on Monday as caution prevailed ahead of the US corporate earnings season, which analysts say could dampen hopes for a swift economic recovery. At the local close, the dollar was trading at $US0.7733, down from Friday's close of $US0.7796 and the session's high of $US0.7825. It dropped to a five-week low of $US0.7723 on 8 July 2009.

In Wellington trade, the New Zealand dollar was under pressure today due to ongoing uncertainty about the direction of the world economy. The NZ dollar was at US 62.36 cents at 5 pm, down from US 62.83 cents at 8 am and US 62.96 cents at 5 pm Friday.

The South Korean won fell to an over two-month low against the U.S. dollar on Monday as foreign investors dumped local stocks amid heightened geopolitical risk and U.S. banking woes. The local currency closed at 1,315 won to the greenback, down 32.3 won, or 2.46%, from the previous session and the weakest level since 29 April 2009.

The Taiwan dollar weakened against the greenback. The Taiwan dollar fell against the US dollar as it was trading lower at NT$ 33.1800, down by NT$ 0.0130 from Friday's close of NT$33.050.

Coming back in equities, Asian equity markets suffered heavy losses as nervous investors braced for a slew of big U.S. earnings reports in the coming week, though merger-and-acquisition related news-boosted shares of China Eastern Airlines and Kirin Holdings.

In Japan, the benchmark indices Nikkei endured losses for nine consecutive days after Japan's ruling coalition was defeated in an important local election the previous day. Most of the investors trimmed their position, as anxiety corporate earnings are unlikely to improve amid a dearth of demand at home and abroad. At the closing bell, the Nikkei 225 Stock Average index plummeted 2.55%, or 236.95 points, to 9,050.33, while the broader Topix index stumbled 2.3%, 20.08 points, to 852.42.

On the economic front, Ministry of Economy, Trade and Industry said Industrial production in Japan grew a seasonally adjusted 5.7% month-on-month in May, revised down from a 5.9% rise reported on 28 June 2009. Shipments increased 4.8%, revised up from a 4.5% rise, while inventory fell a revised 0.7% compared to a 0.6% drop reported initially.

On an annual basis, industrial output was down an unadjusted 29.5% in May, confirming the initial estimates. Shipments fell 30%, while inventory declined a revised 8.4% compared to an 8.3% fall reported earlier.

In Mainland China, stock market extended losses for second day in row amid worries over short-term liquidity after China State Construction Engineering's looming blockbuster flotation. Meanwhile, decline in exports data for an eighth month in June fueling the downtrend. Lower crude oil and metals prices taking a toll on materials and energy shares. Properties were under pressure after Poly Real Estate announced a plan to issue initial share sale.

The Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, fell 1.07%, or 33.38 points, to 3,080.56, while the Shenzhen Component Index shed 0.36%, or 45.46 points, to 12,660.55.

On the economic front, the customs bureau said exports slid 21.4% in June 2009 from a year earlier.

In Hong Kong, the benchmark index tumbled on the back of weak global cues amid lingering concerns about the global economy. Lower crude oil and metals prices taking a toll on materials and energy shares. Financials were under pressure on concerns about liquidity squeeze in the financial market after Chinese regulators approved more initial public offerings. Export related stocks dropped after US consumer sentiment dropped more than market forecast, rekindled anxiety about the global economic recovery.

The Hang Seng Index tumbled 453.79 points, or 2.56%, to 17,254.63, while the Hang Seng China Enterprise Index slipped 295.17 points, or 2.79%, to 10,279.25.

In Australia, the stock market continued to decline throughout the day to eventually close down, dragged down by real estate and financials on anxiety about the corporate earning. Miners, materials and energy shares dropped as crude oil and metal prices softened.

At the closing bell, the benchmark S&P/ASX200 index dived 56.60 points, or 1.49%, to 3,737.5, meanwhile the broader All Ordinaries dropped 52.6 points, or 1.39%, to 3,738.

On the economic front, the Australian Bureau of Statistics said in a statement that loans for personal finance dropped 2.9% in May after rising 0.2% in April. However, commercial finance climbed 4% after a 12.9% slide the previous month.

In New Zealand, benchmark index commenced the first trading day of the week, slightly lower in the negative patch. The share market failed to rise on a positive economic data; with the country's retail sales data for May was much stronger than expected. It registered the third consecutive day of decline on Monday. The NZX50 edged down 0.05% or 1.39 points to 2736.89. The NZX 15 decreased 0.12% or 6.20 points to close at 5058.98.

Meanwhile, on the economic front, New Zealand's seasonally adjusted total retail sales rose 0.8 percent ($41 million) in May 2009, registering the largest monthly increase since November 2007. The rise is due to a 1.6 percent ($65 million) rise in core retailing, more than offsetting a 1.8 percent ($25 million) drop in the vehicle-related industries.

In South Korea, stocks closed down as investor's dumped shares on cloudy earnings outlooks and renewed geopolitical concerns following rumors over the health of North Korean leader Kim Jong-il. The benchmark Korea Composite Stock Price Index (KOSPI) tumbled 50.5 points to 1,378.12, the first close below the 1,400-point mark this month.

In Singapore, the stock market continued to decline throughout the day to eventually close down, dragged down by properties and financials on anxiety about the corporate earning seasons and a delay in global economic recovery. Manufacturing and multi-industries shares dropped as commodities prices softened. The blue chip Straits Times Index fell 41.34 points, or 1.79%, to 2,266.64.

In Taiwan, stock market in Taiwan witnessed Monday mayhem, as the benchmark index tumbled by more than 200 points after the Commercial Times quoted Mainland Affairs Council minister Lai Shin-yuan as saying China and Taiwan won't start talks on a trade pact until 2010.

The main Taiex share index showed a sharp decline on the first day of the week as the benchmark index slumped by 239.04 points or 3.53%, closing the day at 6530.82, the lowest closing since 30 June 2009 when market closed the day at 6432.16. Considering the one-day change, it has been the sharpest decline since 17 April 2009 when market corrected by 241.79 points.

In Philippines, the stock market closed lower amid a lack of positive leads, following the losses in Wall Street last Friday. The benchmark index PSEi fell 0.15% or 3.83 points to 2,483.39, while the All Shares index declined 0.14% or 2.35 points to 1,594.65.

In India, trading for the week began on a subdued note as the key benchmark indices fell, extending last week's sharp losses on weak regional stocks. The S&P CNX Nifty fell below the psychological 4,000 mark.

As per the provisional figures, the BSE 30-share Sensex was down 103.90 points or 0.77% to 13,400.32. The S&P CNX Nifty was down 29.85 points or 0.75% to 3,974.05.

Elsewhere, Malaysia's Kula Lumpur Composite index went down 0.38% or 4.10 points to 1063.66 while stock markets in Indonesia's Jakarta Composite index ended the day lower at 2020.14.

In other regional market, European shares tried to show some recovery after opening lower on Monday, as Philips Electronics advanced after kicking off earnings season on the Continent with a small profit.

On the regional level, the U.K. FTSE 100 index
edged up 0.56% or 22.96 points to 4,150, the German DAX index added 0.71% or 32.44 points to 4,608 while the French CAC-40 index was trading higher by 0.28% or 8.28 points at 2,991.