Growth worries rattle Asian stocks

Crude bounces, risk appetite struggling to sprout

Asian markets ended mostly lower today though some gains emerged in Japanese stocks on bargain hunting after the latest spate of losses. The risk appetite continued to be affected on US growth worries after the US Beige Book report described the pace of growth as "modest," in line with Federal Reserve Chairman Ben Bernanke's acknowledgment Tuesday that growth was slowing. WTI Crude oil bounded back above $100 per barrel as OPEC kept its output levels unaltered and signs that the monetary tightening activity in emerging Asia would hold on its course in coming months is keeping buyers aside. In the overnight trades, the US stocks in red for sixth consecutive session on economic worries and the Dow dropped 21.87 points, or 0.18% to close at 12,048.94 points.



Japanese markets slipped on these counts initially but then moved up. Latest data showed that the country's economy shrank 0.9% in the first quarter, unchanged from the initial estimate as inventory adjustments offset weaker corporate spending, the revised numbers, released by the Cabinet Office stated. On an annualized basis, the economy contracted a revised 3.5%, against a preliminary reading of 3.7%. Capital expenditure dropped a revised 1.3%, compared with the initial estimate of a 0.9% drop. Some bargain buying emerged later in the day though, pulling the benchmark Nikkei index up by 17.69 points or 0.19% at 9,467.15 points.

In Australia, stocks dropped further on poor global leads and weak local employment data. Australian employment growth continued to lose steam. Bureau of Statistics' latest report stated that the unemployment rate has remained steady at 4.9 per cent, but the Australian economy shed 22,000 full-time jobs in May. The seasonally adjusted figures showed 7,800 jobs were created overall, but all of them were part-time, offsetting the fall in full-time work. It is the second month in a row that full-time employment has slipped, with April's fall being revised to 57,200, after initially being estimated at 49,100. The stocksplummeted to a fresh two-and-a-half month low and the benchmark S&P/ASX 200 index slipped by 14 points, or 0.3%, at 4569.1.

The Chinese stocks stumbled today. Markets were gripped by a heavy sell off on concerns that the central bank will further tighten money supply and a customary rise in the local money market rates hurt the sentiments. The Shanghai Composite Index closed down 1.71%, or 46.94 points, at 2,703.35.

In Mumbai, stocks slid lower, giving up modest intraday gains amid mostly bearish cues from world markets. The wholesale food price inflation in the country surged to a two-month high of 9.01% for the week ended May 28 following expensive fruits and certain vegetables. Food inflation, as measured by the Wholesale Price Index (WPI), was 8.06% in the previous week, while it was as high as 20.62% during the last week of May, 2010. Fruit prices surged by 31% while milk jumped 8.49% and egg, meat and fish soared by 7%. However, the prices of pulses went down by 9.49 percent year-on-year. The BSE benchmark Sensex today ended flat, closing 9.39 points down to 18,384.90.

In other markets, the Hang Seng index in Hong Kong shed 0.21%, the Seoul Composite in South Korea dropped 0.57%, the Taiwan Weighted index in Taiwan was off 0.07% and the Straits Times Index in Singapore's moved lower by 0.17%. In currencies, the US dollar traded in a thin range above 1.4600 against the Euro as markets waited for key central banking decisions in Europe. Crude oil managed to hold its gains and was last seen quoting at $100.99, up 25 cents on the day.Gold is trading flat at $1536.80, down 1.90 per ounce on the day after edging near 1540 per ounce in intraday moves.