Wednesday woes continues to hammer Asian markets

Shanghai, Sydney, Sensex, Hang Seng, Nikkei finish in red while Seoul, Taiex edge higher

Stock markets in Asian region slip on Wednesday, 9 December 2009, after US corporate news increased worries on export demand and debt rating downgrades sent investors seeking safety ahead of the year end. The mood remained extremely cautious with doubts about the pace of economic recovery and Dubai debt worries resurfacing again. Focus has now shifted to November US retail sales and a deluge of Chinese economic data due on Friday to gauge how strong the global recovery really is.

On Wall Street, the Dow suffered a triple-digit loss by the closing bell Tuesday, as lingering concerns about the pace of economic recovery, both at home and abroad, weighed on stocks all day. The Dow Jones Industrial Average finished lower by 104 points, or 1%, to 10,286. The S&P 500 fell off by 11 points, or 1%, to 1092 and the Nasdaq slid 17 points or 0.8% to 2173.

In the commodity market, crude oil climbed above $73 a barrel in New York after an industry report showed U.S. supplies dropped, bolstering optimism that fuel demand in the biggest energy-consuming nation will increase.

Crude oil for January delivery gained as much as 72 cents, or 1 percent, to $73.34 a barrel in electronic trading on the New York Mercantile Exchange. It was at $73.01 at 3:12 p.m. in Singapore. Yesterday, the contract fell $1.31 to $72.62 a barrel, the lowest settlement since 9 October 2009.

Brent crude oil for January settlement rose as much as 53 cents, or 0.7%, to $75.72 a barrel on the London-based ICE Futures Europe exchange. It was at $75.52 a barrel at 3:12 p.m. Singapore time. The contract fell $1.24, or 1.6%, to $75.19 a barrel yesterday.

Gold gained in London as a weaker dollar attracted some investors to the metal after its longest losing streak since August. Gold for immediate delivery gained as much as $10.10, or 0.9%, to $1,138.50 an ounce and was at $1,136.02 at 9:22 a.m. local time. Bullion futures for February delivery on the New York Mercantile Exchange’s Comex unit were 0.6% lower at $1,136.70.

In the currency market, the U.S. dollar plummeted against its major counterparts on the back of higher oil prices.

The Japanese currency strengthened against major currencies for fourth day to as high as 88.18 against the greenback today in Tokyo, compared with 88.90 yesterday close.

The Hong Kong dollar was trading at HK$ 7.7504 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 fell under pressure on Wednesday after news about debt woes in Greece and Dubai gave investors a reason to sell riskier currencies. At the local close, the dollar was trading at $US0.9067, down from yesterday’s $US0.9127, but slightly recovered from the day’s low at $US0.9016, with some dealers saying the selling pressure that started in New York overnight was carried over to provide trading momentum.

In Wellington trade, the New Zealand dollar consolidated at lower levels today after investors shunned speculative currencies again and as the focus turned to tomorrow's monetary policy statement from the Reserve Bank of New Zealand (RBNZ). The NZ dollar was US70.83c at 5pm, little changed from US70.80c at 8am and down from US71.47c at 5pm yesterday.

The South Korean won closed at 1,161.60 won to the U.S dollar, down 6.5 won from Tuesday's close of 1,155.10.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.2750, 0.0750 up from Tuesday’s close of NT$32.3500.

In equities, Asian shares were lower as renewed risk aversion gripped markets after Wall Street's sharp decline, while weaker-than-expected economic growth data in Japan hurt stocks there.

In Japan, shares market endured losses for second day in row, as markets around the region were sold off on continuing concerns about the health of the global economy rekindled by credit problems in Dubai and Greece. Sentiments are further dampened after the cabinet office data showed Japan’s gross domestic product rose at an annual 1.3% rate in the quarter ended September 2009, slower than the 4.8% the initial estimation by government as cautious companies decided to save, not to spend.

At the closing bell, the Nikkei 225 Stock Average index was at 10,004.72, eased 135.75 points or 1.34% from its previous close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange tumbled 11.76 points, or 1.31%, to 884.94.

In Mainland China, share market plummeted with broad based sell off across the sector, as lingering concerns about the pace of economic recovery, both at home and abroad. Financials dragged the most amid worries Beijing will curb new lending in 2010 to avert asset bubbles, while materials, industrials, and energy stocks sold heavily as renewed risk aversion gripped markets in the wake of a sharp fall On Wall Street and European market.

The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, plummeted 57.1 points, or 1.73%, to 3,239.56, meanwhile the Shenzhen Component Index on the smaller Shenzhen Stock Exchange tumbled 1.14% or 158.11 points, to 13,772.17. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, stumbled 1.92%, to 3,554.48.

In Hong Kong, the benchmark continued its southward movement registering the fourth consecutive dip in row in response to weakness in European and US markets overnight, reignited risk aversion due to uncertainties over the prospects for the recovery. At the closing bell, the Hang Seng Index stumbled 318.76 points, or 1.44%, to 21,741.76, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, shrank 252.74 points, or 1.92%, to 12,899.36.

In Australia, the stock market extended losing streak for third consecutive day, as sluggish commodity prices, widening nation’s trade deficit, and on continuing concerns about the health of the global economy. At the closing bell, the benchmark S&P/ASX200 index retreated 32.7 points, or 0.7%, to 4,637.9, meanwhile the broader All Ordinaries retracted 33.80 points, or 0.72%, to 4,652.6.

On the economic front, the statistics bureau of Australia said that the number of loans granted to build or buy houses and apartments in Australia dropped 1.4% in October from the previous month. The Australian Bureau of Statistics said country’s trade deficit increased from A$1.85 billion in September to a revised A$2.38 billion in October. The Westpac-Melbourne Institute index of consumer sentiment dropped from 118.3 in November to 113.8 points in December.

In New Zealand, benchmark index continued its southward movement on Wednesday registering the fourth consecutive dip in a row. The NZX50 declined 0.31% or 9.67 points to 3127.64. The NZX 15 decreased 0.37% or 21.11 points to close at 5665.31.

In South Korea, stocks closed higher as investors shrugged off concerns that Dubai debt woes and a cut in Greece's credit rating may dent the global economic recovery. Reversing earlier losses, the benchmark Korea Composite Stock Price Index (KOSPI) rose 6.39 points to 1,634.17.

In Singapore, stocks market dragged by financials and blue chips stocks after debt rating downgrades of Greece sent investors seeking safety ahead of the year-end. At the closing bell, the blue chip Straits Times Index was at 2,797.21, fell 8.29 points or 0.3%, off an intraday low of 2,784.64.

In Taiwan, Stock market in Taiwan continued to teeter-totter between the gains and losses as it finished Wednesday, 9 December 2009, at 17 month high, as investors ignored weakness on Wall Street and piled into shares of big tech companies with better earnings outlooks. The benchmark Taiex share index resumed with gains, by finishing the day higher by 28.71 points or 0.37% at 7797.42, the highest closing since 26 June 2008 when market finished the day at 7811.80.

In Philippines, the stock market closed lower tracking the lackluster performance of overseas markets following the losses on the Wall Street overnight. At the concluding bell, the benchmark index PSEi fell 1.02% or 30.82 points to 2,981.25, while the All Shares index tumbled 0.83% or 15.64 points to 1,860.36.

In India, the key benchmark indices lost ground in choppy trade as weak global stocks weighed on investor sentiment. The BSE Sensex was down 102.46 points or 0.59% to 17,125.22. The S&P CNX Nifty was down 35.95 points or 0.68% to 5112.00.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished lower at 1255.76 while stock markets in Indonesia’s Jakarta Composite index inched down 2.59 points ending the day higher at 2481.30.

In other regional market, a drop for financials dragged Europe stocks lower on Wednesday, led lower by a further fall in the Greek bank sector as well as a decline for Man Group on a drop in performance in one of its key funds.

On a regional level, the U.K. FTSE 100 index declined 0.2% to 5,214.20 ahead of the U.K. government's pre-budget report where it will flag up future fiscal targets, due at 7:30 a.m. Eastern. The French CAC-40 index declined 0.5% or 20.41 points to 3,765 and the German DAX index declined 0.35% or 20 points to 5,669.