Asian markets wrap-up woeful week weaker

Nikkei led the regional losses as Sensex, Sydney, Seoul, Shanghai follows them

Stock market in Asian region fell Friday, 22 January 2010, as concerns over proposed U.S. banking curbs and the prospect of China rolling out more measures to cool its economy triggered broad losses. Investors followed the lead of the Dow Jones index, which suffered its worst fall of the year after Obama said he wanted to put limits on banks to avoid a repeat of the financial crisis that tore into the world’s economies.

On Wall Street, blue-chip stocks suffered a second day of triple-digit losses Thursday after President Obama announced sweeping new curbs on big banks. The Dow Jones Industrial Average stumbled by 213 points, or 2%, to 10,390. The S&P 500 dropped 22 points, or 1.9%, at 1116, and the Nasdaq declined by 26 points, or 1.1%, at 2266.

In the commodity market, crude oil fell below $76 a barrel in New York, poised for a second weekly decline, after a U.S. government report showed refineries in the biggest energy consumer slashed processing in response to lower fuel demand.

Crude oil dropped for a third day after the Energy Department said refineries operated at 78.4% of capacity last week, the lowest rate outside the Atlantic hurricane season since at least 1989. Gasoline stockpiles climbed to the highest level since March 2008. Fuel consumption in the past four weeks was down 1.8% from a year earlier.

Crude oil for March delivery declined as much as 46 cents, or 0.6%, to $75.62 a barrel in electronic trading on the New York Mercantile Exchange. It was at $76.37 at 10:14 a.m. London time. Yesterday, the contract lost 2.1% to $76.08, the lowest settlement since 22 December 2009.

Brent crude oil for March settlement fell as much as 30 cents, or 0.4%, to $74.28 a barrel on the London-based ICE Futures Europe exchange, and was at $74.98 at 10:14 a.m. London time. Yesterday, it declined 2.3% to $74.58, the lowest settlement since 22 December 2009.

Gold, trading was little changed in London trading, as it is poised for its biggest weekly decline in six as the dollar’s rebound curbed investor demand for the precious metal as an alternative investment. Bullion for immediate delivery traded at $1,097.20 an ounce at 10:14 a.m. in London.

In the currency market, the U.S. dollar was trading off its early lows near the end of the Asian session Friday, regaining some ground after initial losses though still smarting from the aftermath of the U.S. President’s new plans to regulate U.S. banks.

The Japanese yen strengthened against major currencies on Friday. Japan’s currency was quoted at 89.97 per US dollar on Friday from yesterday quote at Y90.34 per dollar in New York.

The Hong Kong dollar was trading at HK$ 7.7730 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 stuck near three-week lows on Friday as investors fled riskier trades and higher-yielding currencies, unwinding leveraged positions funded mainly in yen. At the local close, the dollar was trading at $US0.9031, having shed over a cent overnight and almost 2% for the week.

In Wellington trades, the New Zealand dollar fell to multi-week lows against a range of currencies today after United States President Barack Obama proposed the biggest regulatory crackdown on banks since the 1930s. The NZ dollar traded just below US 71 cents, it’s lowest since 29 December 2009, before settling at US 71.30 cents at 5 pm from US 72.09 cents at the same time yesterday.

The South Korean won closed at 1151 won to the greenback, down from Thursday 1137.10 won.

The Taiwan dollar weakened against the greenback. The Taiwan dollar was trading lower against the US dollar at NT$ 31.9640, 0.0450 down from Thursday’s close of NT$31.9190.

In equities, Asian markets tumbled as concerns over proposed U.S. banking curbs and the prospect of China rolling out more measures to cool its economy triggered broad losses, with financials and metal shares hit especially hard.

In Japan, the share market benchmark Nikkei Average stumbled with broad based slumps across the sectors, triggered by the proposed banking limits by the White House and the prospect of China rolling out more measures to cool the economy. Losses were heavy and widespread with the oil developers and trading houses being the most heavily sold. The Nikkei Average sank 3.6% or 391.55 points in a week.

At the end of Friday trade, the Nikkei 225 Stock Average index was at 10,590.55, dropped 277.86 points or 2.56%, while the broader Topix of all First Section issues on the Tokyo Stock Exchange fell 15.09 points, or 1.58%, to 940.94.

On the economic front, Japan's nationwide supermarket sales on an annual basis fell below the 13 trillion yen thresholds for the first time in 21 years, according data released Friday by the Japan Chain Stores Association

In Mainland China, the stock index dropped after hitting an one month intraday low of 3,062.6 in morning low on the back of the slide in commodity prices and overseas market losses and on concern the government will raise interest rates to cool the world’s fastest-growing major economy. Lower commodity prices due to strength greenback dampen commodity and resources stocks. Energy stock also lost ground following the weakness in the oil price. Properties were sluggish on prospect of China rolling out more measures to cool the economy. The index has lost 3 percent or 95.57 points this week.

At the end of Friday’s trade, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, dropped 30.27 points, or 0.96%, to 3,128.59, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange dived 321.22 points, or 2.49%, to 12,595.94. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, dropped 1.24%, to 3,366.20.

In Hong Kong, the stock market tumbled to three month closing low following tumbles in surrounding markets on falling commodities and fears of more monetary tightening in China. Although, most of morning declines were pared back on late hour bargain hunting triggered by late recovery in the Shanghai market on hope recent sell off turned stocks valuation attractive.

At the end of Friday session, the Hang Seng Index dropped 136.49 points, or 0.65%, to 20,726.18, while the Hang Seng China Enterprise, which tracks the overall performance of 43 Mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, recouped 17.82 points, or 0.15%, to 11,975.92.

In Australia, the shares fell sharply with benchmark All Ordinaries tumbled as investor risk appetite hurt by a proposed overhaul of the US banking sector, which sent New York shares tumbling overnight, while a falling commodities prices hammered materials and resources. Energy stock also lost ground following the weakness in the oil price. The proposed banking limits by the White House hurt financial stocks. The All Ordinaries registered weekly declines of 3.2% or 157.60 points. At the closing bell, the benchmark S&P/ASX200 index dropped 76.60 points, or 1.59%, to 4,750.60, meanwhile the broader All Ordinaries dived 77.70 points, or 1.60%, to 4,771.90.

In New Zealand, stock market dropped sharply on the last trading day of the week in line with most of the Asian markets that faltered after a strong decline on the Wall Street overnight. Share prices had dropped sharply overseas as US President Barack Obama took a tough stance on financial institutions, proposing rules to make the system safer by preventing the biggest banks from taking excessive risks. He said he was ready to fight the financial sector and its lobbyists for rules that would bar banks from owning, sponsoring or investing in hedge funds or private equity funds for their own profit, causing a bank share sell-off.

At the closing today, the NZX 50 lost 1.09% or 34.86 points to 3190.43. Meanwhile, the NZX 15 declined by 1.17% or 67.45 points to close at 5748.20.

In South Korea, stocks closed lower on strong foreign and institutional selling sparked by overnight fall on Wall Street. The benchmark Korea Composite Stock Price Index (KOSPI) plunged 37.66 points to 1,684.35.

In Singapore, the share market melted as equities and commodities sold-off across the market on US plans to curb excessive risk-taking by banks and concerns over Chinese monetary tightening. The blue chip Straits Times Index was at 2,819.71, slipped 31.27 points or 1.1%.

In Taiwan, stock market fell for fifth straight session taking the index to one-month closing low, as financial shares witnesses a selling spree after the United States proposed tough restrictions on banks that could squeeze profits. U.S. President Barrack Obama threatened to fight Wall Street banks on Thursday with a new proposal to limit financial risk taking, sending stocks and the dollar tumbling. Construction and technology stocks also lost ground as investors feared that the new restrictions could cause consumers to pull back on spending and hit corporate earnings.

The benchmark Taiex share index extended loses to fifth session, as the index finished tumbled by 200.56 points or 2.47% at 7927.31, the lowest closing since 23 December 2009 when market finished at 7901.50. The index also registered its biggest one day percentage fall since 27 November 2009.

In Philippines, the stock market closed the week in the negative territory following the Asian equities, as investors became vigilant after US president Barack Obama proposed tough new restrictions on banks, curbing investors' appetite for riskier assets. The downward moves echoed those on Wall Street flustered the PSEi, which plummeted more than 2%. Sustained selling in financials and industrials hurt the sentiments, keeping the selling pressure on ahead of the weekends. At the concluding bell, the benchmark index PSEi lost 2.01% or 62.11 points to 3,023.47, while the All Shares index tumbled 1.27% or 24.56 points to 1,906.89.

In India, the key benchmark indices ended a volatile trading session lower after US President Barack Obama proposed limiting risk-taking at US banks.The BSE 30-share Sensex was down 191.46 points or 1.12% to 16,859.68. The S&P CNX Nifty was down 58.15 points or 1.14% to 5036.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly lower at 1300.45 while stock markets in Indonesia’s Jakarta Composite index fell by 28.04 points ending the day higher at 2610.34.

In other regional markets, European shares Friday extended steep losses made in the previous session as the threat of profit-hindering regulation continued to drive investors away from the banking sector. On a regional level, the U.K. FTSE 100 index declined 0.1% to 5,331.79, the German DAX index declined 0.4% or 23.81 points to 5,723 and the French CAC-40 index declined 0.3% or 12.65 points to 3,850.