Asian Markets tumbles on Thursday

Sensex, Hang Seng, Seoul, Shanghai led losses while NZX50, Seoul close higher

Stock markets in Asian region tumbled on Thursday, 4 February 2010, as investors showed little interest, drying up the buying activity following somewhat lackluster session on Wall Street overnight. Besides a lack of triggers, caution ahead of some key earnings reports and a fair amount of profit taking due to weaker commodity prices are also contributed to the decline in most of the markets in the region.

On Wall Street, a two-day stock rally stalled Wednesday as mildly positive economic data failed to offset uncertainty regarding the strength of economic recovery amid a weak job environment. The Dow Jones Industrial Average finished off session lows but still lost 26 points, or 0.3%, to 10,271. The S&P 500 shed 6 points, or 0.6%, to 1097, though the Nasdaq improved by nearly 1 point, or 0.04%, at 2191.

In the commodity market, crude oil declined for a second day after a U.S. Energy Department report yesterday showed a bigger- than-forecast increase in inventories as refineries idled units and imports climbed.

Crude oil for March delivery fell as much as 43 cents, or 0.6%, to $76.55 a barrel in electronic trading on the New York Mercantile Exchange. It was at $76.57 at 8:33 a.m. London time.

Brent crude for March settlement fell as much as 55 cents, or 0.7%, to $75.37 a barrel on the London-based ICE Futures Europe exchange. It was at $75.47 at 8:33 a.m. London time.

Gold declined for a second day in London as a stronger dollar may curb demand for the metal as an alternative investment. Gold for immediate delivery fell $3.30, or 0.3%, to $1,106.50 an ounce at 8:58 a.m. London time. Prices dropped 0.4% yesterday. Bullion for April delivery was down 0.4% at $1,107.20 on the New York Mercantile Exchange's Comex unit.

In the currency market, the US dollar slipped against the yen but gained against other rivals in Asian trading, ahead of European Central Bank and Bank of England policy meetings later in the session.

The Japanese yen softened against greenback and euro, but strengthened against other higher yielding currencies on Asia-Pacific slow recovery speculation and European nation's debts struggles. The yen strengthen against Australian and New Zealand currencies after reports showed Australian retail sales unexpectedly shrank and New Zealand's jobless rate rose to the highest level since 1999. Japan's currency yen was quoted at 91.03 against the greenback.

The Hong Kong dollar was trading at HK$ 7.7698 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 dropped after a fall in monthly retail sales figures surprised financial markets. At the local close, the dollar was trading at $US0.8814, down 0.7% from Wednesday's close of $US0.8872.

In Wellington trades, the New Zealand dollar fell around one US cent after a shock rise in the unemployment rate to 7.3% in the December quarter. The NZ dollar fell to a five month low of US69.60c from US70.80c just before the report. It was at US69.80c at 5pm from US71.06c at the same time yesterday.

The South Korean won closed at 1150.9 won against the U.S. dollar, down 1.9 won from Wednesday's close of 1149.

The Taiwan dollar weakened against the greenback. The Taiwan dollar was trading lower against the US dollar at NT$ 32.0200, 0.0200 down from Wednesday's close of NT$32.0000.

In equities, most Asian stock markets ended down as caution reigned ahead of the U.S. jobs report Friday, with Japanese shares hurt by deepening fears over Toyota Motor's vehicle recall.

In Japan, the share market fell on profit taking among major heavyweights fueled by another bout of heavy selling in Toyota Motor and affiliated shares over deepening recall jitters. Pullback in commodities prices pressured energy and metal companies. Domestic cues are mixed, as investors are sensitive about companies' third-quarter earnings. Japanese companies set to report results later in the day include Sony Corp, Hitachi, and Nikon Corp. At the closing bell, the Nikkei 225 Stock Average index was at 10,355.98, erased 48.35 points or 0.46%, while the broader Topix of all First Section issues on the Tokyo Stock Exchange dived 4.59 points, or 0.5%, to 911.09.

In Mainland China, the shares finished modest lower as renewed worries of fund raising from Chinese lenders, falls in commodity prices, and risk aversion. Most of heavyweights trimmed some of the yesterday's strong gains after regulator's denial of rumors that it had suspended the review and approval of new IPOs. The market tumbled in recent weeks by worries about heavy share supplies, fuelled by steady approvals of new initial public offerings.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, fell 8.53 points, or 0.28%, to 2,995.31, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange slipped 93.09 points, or 0.76%, to 12,169.48. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, sank 0.37%, to 3,218.80.

In Australia, the shares snapped a 2-days of winning streak, pushing key indices to down. Resource-linked shares led the declines on pullback in commodity prices and as weaker cues from offshore market. The sell off was intensified by unexpectedly shrank in Australian December retail sales. Retailer's shares tumbled after the release of weak retail sales data and a disappointing result from Myer. At the closing bell, the benchmark S&P/ASX200 index fell 26.30 points, or 0.57%, to 4,621.60, meanwhile the broader All Ordinaries shrank 29.10 points, or 0.62%, to 4,644.10.

On the economic front, Australian Bureau of Statistics report retail sales increased 1.1% in the December quarter, however dipped 0.7% in the month of December to A$19.925 billion.

In a separate report, the Statistic Bureau said that building approvals in Australia were up a seasonally adjusted 2.2% to reach 14,869 units in December after the 5.9% increase in November. On an annual basis, approvals surged 53.3% after the 33.3% gain in the previous month.

In New Zealand, stock market ended in the positive terrain, up almost 14 points. The domestic benchmark index rose today after dipping down in the red region for six days in a row. NZX 50 that crossed 3300 levels early in January 2010 has thereafter been consistently declining, currently trading close to 3150. At the closing today, the NZX 50 added 0.44% or 13.83 points to 3148.94. Meanwhile, the NZX 15 advanced 0.72% or 40.79 points to close at 5688.72.

On the economic front, unemployment rose to 7.3% in the December quarter from 6.5% the previous quarter, according to the Household Labour Force Survey released today. The number of unemployed people rose by 18,000 to 168,000 during the quarter, taking the unemployment rate to its highest level since the June 1999 quarter. The jump in the unemployment rate was largely due to an increase in the number of people entering the labour force but who were unable to find work.

In South Korea, stocks closed higher as automaker gains narrowly offset falls stemming from heavy institutional sell-offs. After range-bound trading, the Korea Composite Stock Price Index (KOSPI) added 1.4 points to finish at 1,616.42.

In Singapore, the stocks retreated in quiet trading on Thursday as equity and commodity markets lost ground across the globe overnight. Commodity-linked shares led the slide, while financials fell as weak lead from the US financials. Manufacturing and multi-industries slid amid speculation Asia-Pacific economic recovery might slow this year and broader decline in commodities prices. At the closing bell, the blue chip Straits Times Index was at 2,744.98, slipped 19.86 points or 0.72%.

In Taiwan, stock markets finished flat with technology shares tracked losses on Wall Street amid concerns about the global economic recovery. Investors were worried that governments of major countries would shift direction of their stimulus packages. The benchmark Taiex share index extended losses in second session, by finishing the day slightly lower by 5.94 points or 0.08% at 7542.04.

In Philippines, the stock market closed higher bucking the trend in regional markets, as investors remained optimistic following the positive economic prospects. A rebound in exports and spending related to the local and national polls in May are expected to push gross domestic product (GDP) growth past 2.6% in the first quarter of 2010. At the final bell, the benchmark index PSEi ascended 1.04% or 30.06 points to 2,914.87, while the All Shares index went up 0.76% or 14.06 points to 1,853.78.

In India, a late sell-off in index pivotals pulled the key benchmark indices to the day's low. Weak global stocks weighed on investor sentiment. European markets were trading lower ahead of rate decisions from the European Central Bank and the Bank of England later in the global day. In another announcement, the two top stock exchanges, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have decided to hold a special trading session on Saturday, 6 February 2010, as NSE is testing an upgraded trading system. Trading will begin at 11:00 IST and end at 12:30 IST. The BSE 30-share Sensex was down 271.10 points or 1.64% to 16,224.95. The S&P CNX Nifty was down 86.50 points or 1.75% to 4845.35.

Elsewhere, Malaysia's Kula Lumpur Composite index finished slightly lower at 1265.03 while stock markets in Indonesia's Jakarta Composite index gave up by 11.33 points ending the day lower at 2593.22.

In other regional market, European shares Thursday resumed a downward trend from the previous session, as worries about the debt levels of Greece and Portugal refused to go away. Overall, the German DAX index declined 0.7% to 5,634.74, the French CAC-40 index lost 0.7% to 3,767.30 and the U.K. FTSE 100 index fell 0.7% to 5,214.31.