Asian markets subdued on Monday

Gloomy world economic prospects continue to keep risk aversion under check, gold rises to fresh highs above $1600

Asian markets tilted lower in the first session of the week as the gloomy world economic prospects continued to keep risk aversion under check. Safe havens gold rallied above $1600 per ounce, a fresh all time high even as the US dollar stayed resilient, as investors were uninterested in any risk play. The concerns pertaining to Europe's banking woes and debt problems in the US remained at the helm of the affairs for world markets.The results of stress tests on European banks that were released on late Friday revealed that eight of 90 European banks could not clear these tests, indicating that the European banking sector could come under intense pressure if the economic conditions deteriorate in coming months. The DOW futures dropped today and most Asian benchmarks ended in red. Markets in Japan are closed today for a national holiday.

In Australia, the stocks slipped on weak energy and financial issues amid the weak global cues. A heavy falls in News Corporation also weighed on the market though the Gold miners surged, cheering the record-breaking rally for the yellow metal. News Corp international extended its drop after the recent phone-hacking scandal in the UK and shed 4% today. The benchmark S&P/ASX200 index closed down 1.5 points, or 0.03%, at 4472 points.

In China, the pertinent worries about further monetary tightening took their charge and the market dropped, led by the property developers. Twenty-six cities out of a statistical pool of 70 major cities saw new home prices decline or remain unchanged from a month earlier, compared to 20 cities in May, the National Bureau of Statistics (NBS) said today. While this is a welcome development, the government's regulatory measures are expected to remain in place, as some cities are still facing price hikes. The benchmark Shanghai Composite Index dropped 3.48 points or 0.12% to close at 2,816.69 points.

In India, the markets slipped amid weak global cues though the morning trades witnessed volatile movement. Key benchmark indices slipped in the red in afternoon trade and extended losses with major index heavyweights like Reliance Industries, ICICI Bank and Larsen & Toubro edging lower. At 14:20 IST, the BSE Sensex was down 45.05 points or 0.24% to 18,516.87. The Sensex rose 60.64 points at the day's high of 18,622.56 in morning trade but dropped thereafter and closed down 54.88 points or 0.30% at 18507.04 points. Investors continue to monitor the progress of the monsoon rains. Monsoon rains were above average in June 2011, but dropped to 3% below average after slowing in the first week of July. Rainfall between July 7 and July 13 was 19% below average, while it was 25% below average between June 30 and July 6.

In other markets, the South Korea's Kospi slipped 0.69%, Hong Kong's Hang Seng dropped 0.32% while Taiwan's Taiex shed 0.42%. In commodities, Gold ruled the roost as the excellent buying support pushed the yellow metal to fresh highs above $1600 per ounce. Crude oil dropped though as the weak undertone in stocks curbed the buying support. The commodity quotes at $97.10, down 44 cents on the day.