Asian stocks trend lower

Markets give up further of their early September gains as the US dollar rallies and commodities dip

Asian markets trended lower, giving up further of their early September gains as the US dollar rallied and commodities dipped. The weak overnight cues from the US markets and continued worries over the European banking health kept a tab on the markets. US index futures dropped, pointing to a second session of losses for Wall Street, as investors awaited a report from the Federal Reserve for more evidence on the health of the American economy. Yesterday, the US stocks fell by sharp margins to open the Labor Day-shortened week on a negative note, as profit taking following last week's gains drove the major averages down off of their best closing levels in three weeks. The Dow drifted lower by 107.24 points or 1% to end at 10,341.



The Australian market closed in negative zone as global risk appetite swung into action. The banking and mining stocks slide lower following weak cues from Wall Street. Some traders were also worried that Australian Prime Minister Gillard might revisit policy on mining resource taxes. The benchmark S&P/ASX200 Index dropped 36.00 points, or 0.79%, and closed at 4,537 points, while the All-Ordinaries Index ended at 4,578, representing a loss of 34.70 points, or 0.75%.

On the economic front, a statement released by the Australian Bureau of Statistics revealed that the value of home loan commitments in the country increased 0.7% in July from June. The Bureau further noted that the number of loan commitments for new, owner-occupied dwellings increased a seasonally adjusted 1.7%.

Japanese equities dropped more than 2%, extending its latest drop as the as the yen rose further, hitting a new 15-year high against the dollar. The benchmark Nikkei 225 Stock Average lost 201.4 points, or 2.18%, to close at 9,024.6 while the broader Topix index ended down 13.93 points, or 1.67%, at 820.99.

On economic front, Japan's private-sector machinery orders, excluding volatile ones for ships and those from electric power companies, rose a seasonally adjusted by 8.8% on the month to 766.3 billion yen in July, marking the second straight month of increase, as per the Cabinet Office report. Core machinery orders are considered a leading indicator of corporate investment trends.

In China, stocks eased from four-month highs with financials weighed down by weak global cues and concerns over the health of the global economy. However, the losses were still very much limited and the Shanghai Composite Index closed at 2,695.3, down 0.1% on the day. There were reports that August bank lending may not show an inspiring performance – hurting the banking stocks.

In Mumbai, the key benchmark indices recovered from lower level, with the Sensex registering small gains and Nifty ending almost unchanged for the day. Indian stocks outperformed global equities, which fell on renewed concerns about the health of European banks. Index heavyweight Reliance Industries (RIL) edged lower in volatile trade. The BSE 30-share Sensex was provisionally up 12.66 points or 0.07%, off close to 65 points from the day's high and up close to 115 points from the day's low.

In other markets, the Hang Seng index in Hong Kong dropped 1.46%, Straits Times in Singapore shed 0.81% while the TSEC in Taiwan pared 0.42%. Dollar eased a little in initial moves but then recovered in afternoon, quoting under 1.2700 mark against the Euro. Crude oil looked fatigued above $74 per barrel mark and was last seen quoting at $73.94, down 15 cents on the day. The commodity had dipped to a low of $73.37 a barrel.