Asian markets turn down on Thursday

Shanghai, Sydney, Nikkei, Hang Seng ends lower while Sensex, Strait Times wangle gains

Stock markets in Asian region slip as buying fatigue sets in on Thursday, 27 August 2009, after a flat day on Wall Street following encouraging home sales and durable goods data left investors cautious about chasing shares higher.

On Wall Street, stocks hovered just off the flat line Wednesday despite better-than expected data on durable goods and new home sales data. The Dow Jones Industrial Average rose 4.23 points, or 0.04%, to 9543.52, while the S&P 500 climbed 0.12 points, or 0.01%, to 1028.12. The Nasdaq Composite crept up 0.2 points, or 0.01%, to 2024.43.

Concisely perking up stocks, the Commerce Department said new-home sales rose to a seasonally adjusted annual rate of 433,000 in July, up from an upwardly revised 395,000 in June. It was the fourth straight increase and marked the most dramatic hike since February 2005.

Earlier, the Commerce Department said orders for goods expected to last at least three years increased 4.9% in July, the third rise in the past four-month. Orders for June were revised up to a 1.3% drop, from a 2.2% decline.

Orders for transportation equipment rose 18.4%. Commercial aircraft orders, a volatile category, more than doubled after falling 30% in June. Motor-vehicle orders increased 0.9%. Excluding transportation goods, orders rose 0.8%. That was the third straight increase.

In the commodity market, crude oil fell for a third day on concern China may cut back on industrial investment, slowing demand for fuels in the world’s second-largest energy user. It was also hurt by data showing an increase in U.S. inventories in the past week and a broad decline for Asian stocks.

Crude oil for October delivery fell as much as 40 cents, or 0.6%, to $71.03 a barrel on the New York Mercantile Exchange, and traded at $71.07 at 3:29 p.m. Singapore time. Yesterday, the contract dropped 62 cents, or 0.9%, to settle at $71.43.

Brent crude oil for October settlement declined as much as 53 cents, or 0.7%, to $71.12 a barrel on the London ICE Futures Europe Exchange, and traded at $71.19 at 3:29 p.m. Singapore time.

Gold futures are trading with marginal gains in the Asian electronic session as US dollar was flat against the European currency. Gold for immediate delivery gained 6 cent to $946.40 an ounce at 3:29 p.m. in Singapore.

In the currency market, Japanese yen rallies in Asia on broad based weakness Asian equities and news that China is planning to curb overcapacity and excessive investments in some industries. The US dollar's rebound yesterday takes a breather and turns into sideway consolidation. Main focus will turn to Q2 GDP preliminary reading which is expected to be revised down from advance reading of -1.0% annualized contraction.

The Japanese yen strengthened against major currencies on Thursday, 27 August 2009 on speculation restrictions on Chinese production will stifle an economic recovery, sparking demand for the relative safety of the Japanese currency. The Japanese yen was quoted at 94.07 per greenback, down from Wednesday’s quote of 94.17 yen.

The Hong Kong dollar was trading at HK$ 7.7510 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 climbed off lows after a surprising jump in business investment in second quarter suggested the economy is growing faster than expected, underpinning bets for local rate hikes this year. Still, gains were capped by thin trading conditions, and a general sense of caution as investors worried China's economy could slow if the government tries to rein in investment. At the local close, the dollar was trading at $US0.8275, off a day’s low of $US0.8239. However, it was still nearly a cent lower than Wednesday's close of $US0.8359.

In Wellington trade, the New Zealand dollar fell around a cent as the greenback strengthened broadly, after another unsuccessful run at the US69c level overnight. The NZ dollar was down to US68.08c, having peaked 12 hours earlier at US68.94c.

The South Korea won ended at 1,248.7 won against the greenback, down 3.4 won from Wednesday's close, as companies snapped up the greenback to settle import bills.

The Taiwan dollar was unchanged against the greenback. The Taiwan dollar was trading flat against the US dollar as it closed trading at NT$ 32.9240, unaltered from Wednesday’s close of NT$32.9240.

Coming back in equities, Asian stock markets closed mostly lower with weakness in China shares dampening sentiment. In Japan, the yen's strength dragged exporters' stocks lower.

In Japan, shares market dropped as investor elected to book profit after the benchmark indices hitting ten month closing high yesterday, with export related shares drag the most on the index on stronger yen against major currencies.

At the closing, the Nikkei 225 Stock Average index stumbled 165.74 points, or 1.56% from Wednesday to 10,473.97, meanwhile the broader Topix index fell 11.36 points, or 1.16%, to 964.23.

On the economic front, the Japan Aluminium Association said that supplies of aluminum rolled products to the domestic and export markets gained 5.1% to 166,673 metric tons in July2009 from a June.

In Mainland China, share market stumbled in cautious trade as investors banked profits on news reports that China is considering curbing overcapacity in steel, cement and other industries to cool the pace of expansion and renewed concerns over share supplies. Shares of property companies’ weighed the most in the Shanghai index after China Vanke unveiled plans for a big share offer.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, dropped 21.20 points, or 0.71% to 2,946.40, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, slid 16.08 points, 0.5%, to 3,156.30.

In Hong Kong, benchmark index succumbed as disappointing set of corporate earnings from Esprit Holdings and CNOOC. Investors banked profits on news reports that China is considering curbing overcapacity in steel, cement and other industries to cool the pace of expansion in China. The Hang Seng Index dropped 213.57 points, or 1.04%, to 20,242.75, while the Hang Seng China Enterprise dived 86.46 points, or 0.74%, to 11,570.67.

In Australia, the stock market closed marginal lower as investors elected to profit-taking on as a string of poor earnings reports and a fall in materials and resource stocks such as Rio Tinto and BHP Billiton as base metal prices plummeted by news the world’s top consumer, China, would take steps to curb industrial overcapacity. At the closing bell, the benchmark S&P/ASX200 index slid 3.7 points, or 0.08%, to 4,450.8, meanwhile the broader All Ordinaries skid 6.3 points, or 0.14%, to 4,458.1.

On the economic front, the Australian Bureau of Statistics (ABS) said that new private capital expenditure rose 3.3% in real terms, seasonally adjusted, in the June quarter. The seventh and final estimate of expenditure for 2008-09 is $101.134 billion, which is 16.9% higher than the seventh and final estimate for 2007-08.

In New Zealand, stock market ended its three-day winning streak following a dull day on the Wall Street overnight. The share market was flat in early trading as earnings results continued to reflect tough economic conditions. The NZX50 fell 0.47% or 14.48 points to 3076.42. The NZX 15 decreased 0.68% or 41.58 points to close at 5660.94.

In South Korea, stocks closed lower as institutional investors took a breather with tech and bank share sell-offs. The benchmark Korea Composite Stock Price Index (KOSPI) declined 14.79 points to 1,599.33. The Kospi rose to a fresh 13-month high on Wednesday as investors snapped up undervalued shares and the U.S. economy showed signs of improvement. But institutional sell-offs sparked by the recent sessions' sharp gains weighed on the market, sending the key stock index down as much as 1.43% in late trading.

In Singapore, the stock market surged after opening lower, buoyed by buying pressure among properties and multi industries shares, shrugged off weak performance in offshore markets and other Asian bourses. The blue chip Straits Times Index surged 13.8 points, or 0.53%, to 2,642.23.

In Taiwan, stock market continued to linger in red, as dawdling worries over a possible cabinet reshuffle and an H1N1 outbreak triggered selling. The benchmark Taiex share index stretched its losing stripe in third session as its finished the session lower by 28.46 points or 0.42% in a day, closing the day at 6690.75.

On the economic front, the revival in the car market and in the stay-at-home sales, Taiwan’s retailing sales witnessed a monthly rise of 1.28% to NT$277 billion in July, a new high since June of 2008.

In India, volatility ruled the roost as the key benchmark indices provisionally closed with small gains. The market recovered after an early slide triggered by weak global stocks. Volatility was high in late trade with the Sensex alternatively moving between positive and negative zone as traders rolled over positions in the derivatives segment from August 2009 series to September 2009 series, ahead of the expiry the August 2009 contracts.

The Sensex moved into positive zone in morning trade. It slipped into the red red again later. The market once again moved into the green from red in early afternoon trade. The market extended gains in afternoon trade. The market pared gains in mid-afternoon trade. The BSE 30-share Sensex was up 11.22 points or 0.07% to 15,781.07. The S&P CNX Nifty was up 7.35 points or 0.16% to 4,688.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.37% or 4.34 points to 1176.90 while stock markets in Indonesia’s Jakarta Composite index ended the day lower at 2356.06.

In other regional market, European shares held to a tight range on Thursday, as gains from Credit Agricole, Nokia and Accor worked to offset weakness from Diageo and miners. Overall, the French CAC-40 index was trading little higher by 0.1% at 3,672, the German DAX 30 index lost 0.1% to 5,519 and the U.K. FTSE 100 rose was trading higher by 0.1% at 4,894.