No more gains for Asia

Equities witness a mostly bearish outing

Asian equities witnessed a mostly bearish outing today, as the late pullback in the US dollar in the yesterday's New York trades and worries on the US housing front kept the buying momentum under check. Investors were seen not getting carried away ahead of the upcoming G20 meeting and the currency markets continued to keep a tab on the risk appetite with the Japanese not far off 15-year highs against the dollar. The US housing markets remain weak and high levels of mortgage defaults may well persist for some time to come, according the Federal Reserve Chief Ben Bernanke. Media reports quoted Bernanake saying that the Fed is concerned about reported irregularities in foreclosure practices at a number of large financial institutions, and the Fed is looking into whether systematic weaknesses are leading to improper foreclosures.



US stocks witnessed modest gains to open the week yesterday, as the dollar weakened in the wake of comments from the G20 indicating little willingness of other nations to participate in devaluing their currencies. The major averages all saw some downside in late-session dealing but still managed to close at their best levels in nearly six months. The Dow gained 31.49 points or 0.3% to close at 11,164.05.

Japan recovered slightly in early moves after two days of losses but fell back as investors eyed for more measures from the Bank Of Japan to curb the relentless rise in the Yen. The current rally in the currency is reflecting it quite clearly that the measured bouts of interventions by the central bank are not making much of an impact on the currency. There was nothing much on the economic front too and the Nikkei 225 index closed down 23.78 points or 0.25% at 9,377 today.

Australian stocks slipped on profit sales amid mixed undertone in the commodity prices. The markets started on a firm note on positive overnight US cues but the sentiments were hurt as the session progressed on waning risk appetite and stronger Yen. The exuberance pertaining to merger and acquisitions activities, as witnessed in the last session, failed to stay in place today as ASX, the operator of the Australian stock market, plunged more than 7% as Singapore Exchange's move to take over ASX seemed to be facing political hurdles. The benchmark S&P/ASX 200 index dropped 22.20 points or 0.47 % on the day to end at 4761.50 points. The broader All Ordinaries index lost 19.10 points or 0.40% on the day to end at 4761.50 points.

In China, markets drifted lower after the recent flurry of gains. China's stocks dropped from a six- month high following weak global cues and an increase in local fuel prices. China will lift fuel prices by nearly 3% from immediate effect, marking the first rise in 7 months, according to media reports today. Gasoline prices will rise by 230 Yuan per tonne and diesel by 220 Yuan per ton. The country has initiated a cut of 3% in the local fuel prices in June. The benchmark Shanghai Composite Index, which tracks both A and B shares, dropped 9.87 points or 0.3% to close at 3041.54.

In Mumbai, markets slipped on weak global cues and inflationary worries even as the key benchmark indices recovered from the day's lows in mid-afternoon trade as index heavyweights Reliance Industries, Larsen & Toubro and Infosys edged higher. The market breadth was negative, compared with a strong breadth earlier in the day. The RBI deputy governor Subir Gokarn said today that surging food prices are structural and would put upward pressure on inflation and interest rates. This raised the concern for rate hike ahead of second quarter review of monetary policy scheduled on 02 November 2010. The BSE 30-share Sensex closed down 77.11 points or 0.40% at 20221 while the NSE NIFTY dropped 23.80 points or 0.39% to end at 6082 points.

In other markets, the Hang Seng index in Hong Kong slipped 11%, the Straits Times index in Singapore dropped 0.62% while the TSEC index in Taiwan edged higher by 0.44%. US maintained its firm undertone after a moderate slide in the Asian trades. The greenback was last seen quoting at 1.3945 against the Euro. Crude futures moved sideways, breaking under $82 per barrel for a while before recovering. The commodity currency quotes at $82.42, down 10 cents from the previous close.