Asia mired in red as dollar strikes back

Fresh concerns about downgrading of Greece on debt problems impact broad market sentiments

Asian equities slipped today, led by the Japanese and Hong Kong stocks as persistent selling pressures weighed on the global asset markets amid stronger dollar and worries over the Greece fiscal scenario. Fresh concerns about downgrading of Greece on debt problems also impacted market sentiment amid fears the global economic recovery might slow down. Yesterday, the US Commerce Department said sales dropped 11.2% to a 309,000-unit annual rate, the lowest level since record keeping started in January 1963, compared with an upwardly revised 348,000 units in December.

This came in an as a rude shock to the global markets which expected new home sales to increase to a 360,000 unit annual pace. The demand for loans to buy homes also hit a 13-year low last week, fanning fears of renewed weakness in the housing market. The dollar emerged as a direct beneficiary out of this; coming near the nine month highs against the Euro as risk aversion hold ground stubbornly.

The stock market in Japan closed in red, dragged down by exporter and trading companies on stronger yen, as the stronger local currency reduces the export realizations in local currency terms upon realization. The benchmark Nikkei 225 Index fell 96.87 points, or 1.0%, to 10,102, while the broader Topix index of all First Section issues lost 4.28 points, or 0.5%, to 891.

On the economic front, a statement released by the Ministry of Finance revealed that Japanese investors bought net 348.0 billion yen in foreign bonds for the week ended February 20. The statement also noted that the country's residents sold a net 27.9 billion yen in foreign stocks last week. Foreign investors purchased a net 37.2 billion yen in Japanese stocks and net 310.5 billion yen in Japanese bonds during the last week, the statement noted.

The Australian market ended in negative territory amid concerns that global economic recovery might receive a setback following developments in Greece, which might lead to downgrading on mounting debt problems. The benchmark S&P/ASX200 Index slipped 54.40 points, or 1.17% to close at 4,594, while the All-Ordinaries Index ended at 4,615, representing a loss of 51.00 points, or 1.09%.

Positive closing on Wall Street in the previous session on Ben Bernanke's comments failed to enthuse investors who preferred to move to sidelines awaiting further developments in Greece and the awesome strength in the US dollar hurt the risk aversion. The greenback traded around 1.3450, threatening to break the nine-month highs against the Euro.

n the U.S., stocks rose by notable margins on Wednesday,. The major averages all closed firmly in positive territory, offsetting a majority of the week's earlier losses. The Dow gained 91.75 points or 0.9% to end at 10,374, the Nasdaq advanced by 22.46 points or 1% to 2,236 and the S&P 500 rose by 10.64 points or 1% to 1,105.

In other markets, China's Shanghai Composite was up 1.0%, Taiwan shares were down 0.4% and South Korea's Kospi Composite was down 1.0%. Singapore's Straits Times Index was 0.6% lower, Thai shares were up 0.4% and New Zealand's NZX-50 was up 0.5%. India's Sensex trimmed earlier losses after the Finance Ministry's Economic Survey for 2009-2010 predicted that India would bounce back to a high 9% growth in 2011-12 and is on its way to becoming the world's fastest growing economy in four years.

Meanwhile, the latest data showed a strong growth in the infrastructure sector in the month of January 2010. The BSE 30-share Sensex was down 23.90 points or 0.15%, up close to 60 points from the day's low and off close to 100 points from the day's high

Dow Jones Industrial Average futures were 39 points lower in screen trade when last seen. Oil fell below $80 on Thursday, dragged lower by a rise in the dollar as the euro slid on concerns over the outlook for the European economy. WTI crude futures for April were down 42 cents at $79.58 a barrel by after rising $1 on Wednesday.