Choppy moves in Asian stocks

Stocks punished on Portugal downgrade, late rebound seen in select markets

Asian equities ended mostly lower in a choppy trading session as markets were pushed lower by fading risk appetite amid continuous strength in the US dollar and falling commodity prices. The weak overnight cues from the US markets and worries over the Portugal sovereign ratings downgrade stressed the sentiments on the bearish side throughout the day with mega sell off in China undercutting the fragile attempts by bulls to stage a rebound during the end of the session. Japan and India were the notable exceptions to end in green though.

Economic concerns lingered across the asset markets as the US dollar rose under 1.3300 against Euro as the downgrading of credit rating on Portugal by Fitch and uncertainty over Greece debt problems continued to help the greenback. The Australian market ended in negative territory with minor losses, taking cues from Wall Street where the major averages ended in negative territory with modest losses amid weaker-than-expected economic data related to new home sales and appreciation of the US dollar. The benchmark S&P/ASX200 Index declined 6.10 points, or 0.12% to close at 4,885, while the All-Ordinaries Index ended at 4,896, representing a gain of 6.90 points, or 0.12%.

On the economic front, the Reserve Bank of Australia, releasing the latest semi-annual financial stability review report, opined that conditions in the global financial system have continued to improve in recent months but a range of challenges and uncertainties remain. It further noted that banks' overall loan losses may have peaked and that profits are beginning to grow again, albeit against a backdrop of continued uncertainty in the global financial system.

China's stocks fell the most in two weeks, led by developers on concern that rising trade tensions will hurt the outlook for exports and the government may further tighten policy to curb asset bubbles. The country's Vice Minister of Commerce Zhong Shan said pressuring China to revalue its currency wouldn't succeed. The Shanghai Composite Index lost 37.63, or 1.2%, to 3,019.18 at the close, the biggest decline since March 12. The Shanghai stock gauge has lost 7.9 percent this year, as the government stepped up measures to cool economic growth and contain inflation. China, which has held the renminbi at about 6.83 per dollar for the past 20 months to aid exporters, has been criticized by US. The world's largest economy is looking for the Obama administration to take retaliatory action through import tariffs.

While most of the other indices ended in red, the stock market in Japan ended in positive territory with minor gains. The benchmark Nikkei 225 Index advanced 13.82 points, or 0.13%, to 10,829, while the broader Topix index of all First Section issues gained 0.16 points, or 0.02%, to 952. On the economic front, a report released by the Bank of Japan revealed that an index measuring corporate service prices in the country declined 1.3% year-over-year during February, coming in at 97.4. The report further noted that, on a monthly basis, corporate service prices were up 0.1% after retreating 0.4% in the previous month.

In Mumbai, the key benchmark indices reversed intraday losses and surged to fresh intraday highs in late trade tracking higher European stocks and gains in US index futures. The BSE 30-share Sensex was provisionally up 110.46 points or 0.63%, up close to 180 points from the day's low and off close to 15 points from the day's high. Index heavyweight Reliance Industries reversed early losses. Banking, capital goods, FMCG and realty stocks rose. Some side counters surged even as the market breadth, indicting overall health of the market, was negative.

The Euro broke below 1.3300 in Asia today and plummeted to its fresh low in 10 months ahead of the key EU summit over a financial aid package for Greece as the sentiments grew heavy against the single currency and markets eyed the fragile undertone in the risky assets. The summit could include an unprecedented intervention by the IMF in Euro zone affairs but a lack of such a move may bring even more worries for the Euro as the Greece contagion spread around the entire region. Greece's debt crisis and a credit downgrade for fellow Euro zone member Portugal yesterday helped drag down the value of the euro, which slumped to a low of 1.3283 against the dollars today.

Commodities were punished by the investors following the rise in US dollar. Gold futures fell to nearly a six-week low of around 1090 per ounce while Light sweet crude oil futures for May delivery ended at $80.36 a barrel in electronic trading, down $0.25 per barrel from previous close at $80.61 a barrel in New York on Wednesday.