Wednesday woes continues to whack Asian Markets

Nikkei, Hang Seng, Seoul, Sydney, Sensex finish lower while Shanghai, NZX 50 edge up

Stock markets in Asian region raised woes on Wednesday, 24 February 2010, as surprise drops in US consumer confidence and German business sentiment fueled fears about the strength of the global economic recovery and boosted safe haven currencies. Investors turned cautious ahead of Federal Reserve Chairman Ben Bernanke’s testimony to the House Finance Services Committee later in the day and to the Senate Banking Committee on Thursday. In light of last week’s unexpected discount rate hike, market players continue to lean toward the Fed raising rates sooner rather than later this year, despite Fed official protests to the contrary.

On Wall Street, blue-chip stocks finished with a triple-digit drop as weaker-than-expected February consumer confidence figures spooked investors about the nation's fragile economic recovery. The Dow Jones Industrial Average lost 101 points, or 1%, to 10,282, and the S&P 500 shed 13 points, or 1.2%, at 1095. The Nasdaq declined 29 points, or 1.3%, at 2213.

On the economic front, the Conference Board's Consumer Confidence Index fell to 46 in February, the lowest level in 10 months. The Conference Board upwardly revised January's level to 56.5, down from January's originally reported level of 55.9. The housing data also proved disappointing, as home prices in 20 cities slipped 0.2% in December, according to the Standard & Poor's Case-Shiller Index. The U.S. national home price index is down by 2.5% in the fourth quarter from a year ago.

In the commodity market, crude oil rose in New York after an industry report showed U.S. stockpiles declined and the dollar dropped, increasing the incentive to buy commodities.

Crude oil for April delivery rose as much as 47 cents, or 0.6%, to $79.33 a barrel in electronic trading on the New York Mercantile Exchange. It was at $78.95 at 3:50 p.m. Singapore time. Yesterday, futures declined 1.6% to settle at $78.86.

Brent crude oil for April settlement rose as much as 41 cents, or 0.5%, to $77.66 a barrel on the ICE Futures Europe exchange in London. It was at $77.27 a barrel at 3:52 p.m. Singapore time. Yesterday, the contract dropped $1.36, or 1.7%, to $77.25.

Gold advanced in Asia, ending two days of losses, as a pause in the dollar’s rally prompted investors to seek an alternative investment. Immediate-delivery gold rose to $1,108.33 an ounce today, before trading 0.2% higher at $1,105.20 at 1:25 p.m. in Singapore. April-delivery bullion in New York added 0.2% to $1,105.50 an ounce.

In the currency market, the U.S. dollar held on to modest early gains against the yen in Asia Wednesday but slipped on the euro as risk aversion subsided enough to allow small gains in some regional stock markets.

The Japanese yen was strengthened against major counterparts on Wednesday as weaker equities curb appetite for riskier, higher-yielding currencies. The Japan’s currency yen was quoted at 90.19 against the greenback.

The Hong Kong dollar was trading at HK$ 7.7644 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 closed lower after a quiet day in which the currency dipped after softer than expected wages data increased the chance of interest rates staying on hold. At the local close, the dollar was trading at $US0.8933, down 0.9% from Tuesday’s close of $US0.9015.

In Wellington trades, the New Zealand dollar posted some modest gains today after tumbling on Tuesday night as investors moved away from riskier assets. The NZ dollar was at US69.45c at 5pm from US69.11c at 8am and US70.20c at 5pm on Tuesday.

The South Korean won ended at 1153.2 won to the greenback, down 4.9 won from Tuesday’s close of 1,148.3.

The Taiwan dollar weakened against the greenback. The Taiwan dollar was trading lower against the US dollar at NT$ 32.0900, 0.0400 down from Tuesday’s close of NT$32.0500.

In equities, Asian markets ended mostly lower as exporters fell on worries about U.S. consumer sentiment and as falling commodity prices hit resource shares.

In Japan, the key stock average stumbled after Wall Street fell overnight on weaker US consumer confidence figures, lower commodity prices, and stronger domestic currency dent investors’ confidence in the economy. Negative sentiment from the US session overnight flowed through to Japanese trade, with the cyclical material and energy sectors led the market lower.

Fresh anxiety about the US overshadowed new signs international trade was picking up. Japan’s exports jumped more than 40% last month from a year earlier, fueled by robust demand for vehicles and high-tech goods in Asia.

At the closing bell, the Nikkei 225 Stock Average index was at 10,198.83, surrendered 153.27 points, or 1.48%. The broader Topix of all First Section issues on the Tokyo Stock Exchange fell 11.68 points, or 1.29%, to 895.69.

In economy section, Ministry of Finance data released showed that Japan’s trade surplus stood at Y85.20 billion in January, as exports jumped, posting the second straight year-on-year rise, while imports marked the first gain in 15 months. Imports rose 8.6% on the year to Y4.82 trillion in January.

Japan’s corporate service price index fell 1% from a year earlier in January, posting the 16th consecutive year-on-year drop, but the pace of decline was the slowest since 0.9% in November 2008 as the recovering global economy is pushing up international transportation costs, Bank of Japan data released Wednesday showed.

In Mainland China, the key indices surged snapping two days of losing streak, buoyed by broad based gains across the sector as lot of rumor in the market ahead of legislative meting next week and strong gains in madcap stocks outweighed negative factors including a huge fundraising plan by Bank of Communication as well as continued official clampdown on excessive bank lending.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, added 39.60 points, or 1.33%, to 3,022.18, meanwhile the Shenzhen Component Index on the smaller Shenzhen Stock Exchange jumped 212.88 points, or 1.76%, to 12,282.09. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, rose 1.44%, to 3,244.77.

On the economic front, China's centrally administered state-owned enterprises (SOEs) under the supervision of the state assets watchdog saw profits grow 200% year on year in January, the watchdog said.

The SOEs reaped 74.33 billion Yuan (10.88 billion U.S. dollars) in profit in January 2001. The figure, however, was down 14.5% from December 2009, the State-owned Assets Supervision and Administration Commission (SASAC) said in a statement on its website

In Hong Kong, the shares fell following a sharp drop in US consumer confidence overnight, retreating commodity prices, and huge fundraising plan by Bank of Communication. However, the key indices off an intraday day low, helped by mild bargain hunting on tracking firmer mainland bourses as well as the city’s government announced better-than-estimated economic growth.

At the closing bell, the Hang Seng Index dropped 155.26 points, or 0.75%, to 20,467.74, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 Mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, retreated 126.27 points, or 1.09%, to 11,493.41.

On the economic front, Hong Kong’s gross domestic product rose a seasonally adjusted 2.3% from the previous three months, Financial Secretary John Tsang said in his budget speech. Hong Kong raised the Stamp duty on homes selling for more than HK$20 million ($2.6 million) will rise to 4.25% from 3.75%, citing it would boost the supply of residential apartments in an attempt to cool the property market.

In Australia, the share market tumbled on heavy selling pressure across the board, triggered by weak lead from international market, falls in commodity prices and some disappointing earnings results. At the closing bell, the benchmark S&P/ASX200 index slipped 69.80 points, or 1.48%, to 4,648.50, meanwhile the broader All Ordinaries melted 65.10 points, or 1.38%, to 4,665.90.

On the economic front, Australia wage price index increased by 0.7% for the fourth quarter of 2009 compared to the previous quarter, as per the Australian Bureau of Statistics. The bureau also reported that for the full 2009 year, its wage index was up 2.9%.

In New Zealand, stock market managed to inch up by the end of the day after dipping down yesterday and during the early hours today. The New Zealand share market fell in early trading in the wake of falling share prices across the globe as a drop in United States consumer confidence and house prices suggested the global economy was still fragile, while German business confidence fell unexpectedly for the first time in almost a year.

At the closing today, the NZX 50 edged forward 0.14% or 4.52 points to 3130.89. Meanwhile, the NZX 15 was up 0.19% or 10.65 points to close at 5635.55.

In South Korea, stocks ended lower Wednesday as a sharp slump in U.S. consumer confidence highlighted lingering concerns about the global economic recovery. The benchmark Korea Composite Stock Price Index (KOSPI) declined 16.07 points or 0.99% to 1,612.83.

In Singapore, share market ended the session lower, weighed down by banks and properties and commodity producers after weaker led from Wall Street overnight and other Asian bourses following a drop in US consumer confidence dampened investor sentiment. Market sentiments were also hammered on news that China was imposing fresh measures to check loans to local governments. At the closing bell, the blue chip Straits Times Index was at 2,762.14, dropped 20.41 points or 0.73%, off an intraday low of 2,748.23.

In Taiwan, stock market in Taiwan flipped to the lower side, snapping five sessions on gains, as with export-reliant registered a sharp drop in U.S. consumer confidence. Investors also showed some concern about rising debt problem in Europe. The benchmark Taiex share index snapped its five days winning streak on Wednesday after ending the day lower by 67.77 points or 0.89% at 7529.67.

On the economic front, Taiwan racked up US$54.13 billion of surplus in its balance of payment last year, a record high, as both the current account and the financial account were both in the black, for the first time in three years. According to the Central Bank of China surplus of the current account, which reflects the state of foreign trade, hit US$42.57 billion in 2009, while the financial account scored a surplus of US$13.98 billion, both record highs.

In other news, Taiwan’s tax revenues surged an annual 56.5% or NT$41.9 billion to NT$116 billion (US$3.52 billion) in January due to last year’s low comparison base, excluding which the growth would be 33.5% or NT$24.8 billion (US$751.52 million), both the highest of their kinds in January records.

In Philippines, stock market took a hit afresh with PSEi tumbling below the 3000 mark once again, as cautiousness played a role once again following the losses on Wall Street overnight. Moreover, investors remained on sideline for more earning reports to be released this week, so far, only banks have released their full-year reports. At the concluding bell, the benchmark index PSEi declined 1.06% or 32 points to 2,981.14, while the All Shares index tumbled 0.63% or 12.16 points to 1,891.07.

In India, the key benchmark indices edged lower in choppy trade as Rail Minister Mamata Banerjee announced a populist rail budget for 2010-2011. Weak global equities and lower US index futures also weighed on investor sentiment. Auto stocks declined on fears of hike in excise duty in Union Budget 2010-2011 later this week. However, Maruti Suzuki India reversed early losses on bargain hunting and was the top gainer form the Sensex pack. The BSE 30-share Sensex was down 30.35 points or 0.19% to 16,225.97. The S&P CNX Nifty was down 11.45 points or 0.24% to 4858.60.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished was little changed at 1270.78 while stock markets in Indonesia’s Jakarta Composite index fell by 4.23 points ending the day lower at 2579.42.

In other regional market, European shares couldn’t hold onto early gains on Wednesday, with Spanish banks such as BBVA and Santander notably weak. The French CAC-40 index fell 0.2% or 7.58 points at 3,699, the German DAX index dropped 0.2% or 10.29 points to 5,594 and the U.K. FTSE 100 index was trading little lower at 5,315.