Asian stocks end mostly lower

Markets ease after recent spree of gains as investors adopt wait and watch approach ahead of key economic reports



Asian stocks ended mostly lower today after the recent spree of gains as investors took a wait and watch approach ahead of the key economic reports from the world's advanced economies and some profit booking took place in select indices. Weak overnight cues from the US markets also kept the overall sentiments mixed even as the International Monetary Fund (IMF) announced that the global economy is unlikely to face a double-dip recession and the recovery will be lead by emerging and developing economies. In its latest world economic outlook, IMF said that the world economy would grow 4.8% this year, better than 4.6% predicted in July. The global economic calendar remained heavy with major central banks in Europe about to convey their interest rate decisions today and the US announcing its non-farm payrolls data for the last month tomorrow.

US stocks closed mixed note last night as private sector jobs dropped unexpectedly, further reinforcing prospects of the Federal Reserve reviving its asset purchase programs and creating a dismal build up for tomorrow's non farm payrolls data. The Dow eked out gains of 22.93 points but the movement in the other indices made it a listless kind of a day. The private payroll processor Automatic Data Processing Inc. (ADP) reported that private sector employment fell by 39,000 jobs in September following a revised increase of 10,000 jobs in August.

The Japanese stocks ended slightly as weak overnight cues from the US markets and a massive strengthening of the Japanese against the US dollar hurt the exporters. The traders remain ware of the latest moves by the Japanese Central Bank and unless a measured spell of weakness is witnessed in the local currency, the overall market sentiments are likely to be decayed. The benchmark Nikkei 225 Index closed down 6.62 points or 0.07% at 9,685,while the broader Topix index of all First Section issues added 1.56 points, or 0.18%, to close at 846.

On the economic front, preliminary data released by the Cabinet Office in Japan revealed that the country's leading index dropped to 99.1 in August from 100 in July, in line with economists' expectations. The data further revealed that the coincident index came in at 103.5, up from 103 in the previous month. The coincident index reading also matched consensus forecast.

The Australian stock market rebounded from initial losses on the back of commodity shares and an impressive jobs data even as the Australian dollar soared to two and half decade highs. The benchmark S&P/ASX200 index inched up by 4.5 points, or 0.1% to close at 4691.3- hitting a fresh five-month closing high while the broader All Ordinaries index added 8.2 points, or 0.2% to end at 4746.2 points.

On economic front, Australia's unemployment rate was a seasonally adjusted 5.1% in September, compared with an unrevised 5.1% in August, the Australian Bureau of Statistics (ABS) stated today. Total employment rose by 49,500 to 11.324 million in the month, seasonally adjusted.

In Mumbai, the key benchmark indices extended losses to hit fresh intraday lows in late trade as profit taking emerged after the market scaled 33-month high on Wednesday, 6 October 2010. IT, metal, realty and banking stocks led the decline. The market breadth turned weak, in contrast with strong breadth earlier in the day. Index heavyweight Reliance Industries reversed initial gains. As per provisional figures, the BSE 30-share Sensex was down 235.21 points or 1.14 % to 20,307.87. The S&P CNX Nifty fell 68.45 points or 1.11% to 6,118 as per provisional figures

In other markets, the Straits Times index in Singapore dropped 0.73%, Hang Seng index in Hong Kong edged up 0.02% while the TSEC index in Taiwan was flat. US dollar plummeted to fresh six month low near 1.4000 levels against the Euro but then gained slightly. The DOW futures are showing a very tight movement and currently indicate that the DOW could drop by 18 points at the open. Crude oil rose sharply, hitting a high of $83.95 per barrel while Gold also continued to gain at a feverish pace, setting a fresh high above $1260 per ounce mark.