Asian stocks lack buying conviction

Weak over night cues amid continued worries over global recovery keep a lid on stocks

Asian markets ended mostly in red today, extending losses for a second day as strong dollar and lack of buying optimism hurt the sentiments. The regional stocks were off to a nervous start today as the DOW fell 149 points yesterday on weak housing data and the effect of the Chinese Yuan moves was seen wearing off. Fitch Ratings cut it's rating on BNP Paribas SA, heightening concern Europe's debt crisis is worsening. Dollar eventually bottomed out at a five day high and DOW futures also rallied but the by that it was a little too late for the Asian markets to catch up and gains were capped as such. Volumes were relatively lesser than normal, as traders preferred to move to the sidelines ahead of FOMC announcement and new home sales data later in the U.S.



The Japanese stocks eased following weak cues from Wall Street, where the major indices ended in negative territory on weak existing home sales data for May, raising fresh concerns about sustaining US economic recovery. Exporters were hurt as Yen rallied and benchmark Nikkei 225 Index slipped 189.19 points, or 1.9%, to 9924, while the broader Topix index of all First Section issues dropped 13.72 points, or 1.5%, to 881.

The Australian market extended losses after hitting five-week highs on Monday as miners and other resource stocks were under pressure following the slide in commodities. The benchmark S&P/ASX200 Index lost out by 72.20 points, or 1.58% and closed at 4,486, while the All-Ordinaries Index ended at 4,509, shedding 71.90 points, or 1.57%.

China stocks ended lower for the first time in three days, led by losses from steel makers on concern that the government is extending its tightening measures on commodities to curb overcapacity.

In Mumbai, the key benchmark indices provisionally closed marginally higher after moving between positive and negative terrain in late trade. Higher US index futures helped the domestic bourses erase steep intraday losses. The BSE 30-share Sensex was provisionally up 10.09 points or 0.06%, up close to 130 points from the day's low and off close to 20 points from the day's high. Realty, auto, healthcare, consumer durables and steel stocks rose.

In other markets, TSEC in Taiwan dropped 0.40% while Hang Seng in Hong Kong managed to gain 0.18% and Singapore stocks dropped 0.04%.

In over night trades, stocks were hurt badly on reports that U.S. existing home sales fell in May as tax incentives from the government ended. Home sales fell 2.2 percent to a seasonally adjusted annual rate of 5.66 million units compared to 5.79 million units in April.

The DOW futures were seen building some gains, currently indicating that the blue chip index could gain 51 points at the open. The US dollar also eased after hitting highs of 1.2250 and led to reemergence of some risk appetite. Crude oil quotes down $24 cents at $77.41 while Gold has gained $5 to trade at $1246.10 per ounce.