RTTNews - Asian markets are mostly seen struggling for support on Friday with the overnight fall on Wall Street and caution ahead of the release of some crucial economic data forcing investors to the sidelines. A few markets in the region are seeing some profit taking after recent sharp gains, while others are moving in a highly choppy fashion with participants waiting for a clear signal to emerge.
In Australia, all the sector indices are currently trading in the red though the key benchmark indices S&P/ASX 200 and All Ordinaries are off their morning lows. Materials, financials and consumer staples stocks are among the major losers.
Miners BHP Billiton and Rio Tinto are trading lower by 2.4% and 2.2%, respectively. Among financials, Macquarie Group and National Australia Bank are down by 1.6% and 1.8%, respectively, while ANZ Bank, Commonwealth Bank of Australia and Westpac Banking Corporation are trading with modest losses.
The Reserve Bank of Australia has upgraded its growth forecasts out to the end of 2010 and says official interest rates could move to a more normal, or higher, setting if the global and domestic economic recoveries prove durable. The central bank has for a second time this week reduced hopes of another rate cut in the near term, saying economic conditions in Australia have been stronger than expected. Its new forecast is for the nation to record modest growth of around 0.5% in calendar 2009, compared to a previous estimate for a contraction of 1%.
According to a survey by the Australian Industry Group-Housing Industry Association, activity among construction firms contracted further in July despite a pickup in house building activity. The performance of construction index (PCI) fell 3.1 points to 39.5 in July. The index has remained below the 50 level, which separates expansion from contraction, for 17 months.
Insurance major Suncorp said the group's net profit for 2008/09 will be lower than last year after volatile markets hit profits in the general insurance investment portfolios. In a trading update, Suncorp said its preliminary expected results for the group for the full year ending June 30, 2009, were for net profit of A$340 million to A$360 million. The Suncorp stock is currently trading 2% down from its previous close.
Construction company John Holland has won an A$270 million contract to redevelop a Perth healthcare facility. The wholly owned Leighton Holdings subsidiary said in a statement on Friday that it had secured the contract to help redevelop the Joondalup Health Campus in Perth. The total value of the project is A$332 million, with John Holland's share estimated at about A$270 million. Leighton Holdings is trading with a modest gain.
In the currency market, the Australian dollar opened lower ahead of a crucial central bank report and U.S. jobs figures. In early trading this morning, the Aussie was quoting at US$0.8395/04, down from Thursday's close of US$0.8427/31. The Australian dollar is currently trading at 0.8377 to the U.S. dollar.
In Tokyo, the Nikkei was down by 104.54 points or 1.01% at 10,284 at the end of the morning session as investors pressed sales ahead of key U.S. jobs data for July. Auto, consumer finance, non-ferrous metals and iron & steel stocks were among the prominent losers.
Bank stocks were trading mixed, while Textiles and paper stocks were mostly trading higher.
Mitsubishi Rayon rose sharply on reports that the firm plans to start producing a high-performance chemical in Saudi Arabia. If the company carries out the plan, it will be able to make use of the 'Alpha process' technology owned by major British chemical firm Lucite International Group Ltd., which the Japanese firm purchased in May. However, after gaining around 6%, the stock has drifted down and is currently up by around 3% over its previous close.
Electrical machinery stock Pioneer Corp. is down sharply by about 4% today following an announcement from the company that it posted an 8.9 billion yen pretax loss for the April-June quarter. According to media reports, the company is considering raising money by tapping public or private funds. With no specific details provided about the plan, investors are largely unmoved by the reports.
Japan Airlines Corp. has reported a group net loss of 99 billion yen for the April-June quarter. The company had announced this morning that it would step up efforts to reduce excess seat capacity, canceling or reducing flights on 10 international routes from October 25. The nation's leading carrier also said it would stop flights for six domestic routes. The company, which is in rehabilitation under government supervision, has decided to make drastic service cuts to improve its bottom line. The JAL stock was down modestly at the end of the morning session.
In the currency market, the U.S. dollar continued trading at the mid-95 yen level early Friday in Tokyo, almost unchanged from its levels overnight in New York. In early trading, the dollar fetched 95.48-53 yen as compared to Thursday's close of 95.42-52 yen in New York and 95.18-19 yen in Tokyo. The yen is currently trading at 95.30 to the U.S. dollar.
The Korean benchmark index KOSPI is having a choppy ride on Friday with investors treading a cautious path ahead of some key economic data from the U.S. With the reporting season more or less over and prices having run up quite sharply over the past few weeks, participants appear a bit confused about the near term direction of the market.
With the reporting season more or less over and prices having run up quite sharply over the past few weeks, the Korean markets is trading flat today with participants choosing to wait for clear signals to emerge.
The KOSPI, which shrugged off a negative start and moved on to 1,573, recording a modest gain in the process, is currently trading flat at 1,566.
Technology stocks are trading mixed. Among automobiles, Kia Motor is trading modestly higher, while Hyundai Motor is down by over 1%.
Bank stocks are mostly trading in positive territory. Oil and energy stocks are trading modestly lower. Among steel stocks, Hyundai Steel is up modestly, while POSCO is down by 1%.
Shipbuilders are mostly trading weak. Not much buying is seen in telecommunications and airlines stocks.
Among other markets in the region, Hong Kong, Shanghai and Singapore are trading notably lower while New Zealand and Taiwan are up modestly. The Indonesian market is trading flat. Stock markets across the region had turned in a mixed performance on Thursday.
On Wall Street, stocks surrendered early gains and posted moderate losses overnight, as traders did some profit taking ahead of key employment data on tap for Friday. Though there were some encouraging signs on the jobless claims front, sales figures from major retailers were somewhat disappointing.
The Dow closed down by 24.71 points or 0.3% at 9,256, the Nasdaq eased by 19.89 points or 1% to 1,973, and the S&P 500 drifted down by 5.64 points or 0.6% to 997.
Major European markets closed on the upside by moderate margins. The French CAC 40 index and the German DAX index finished up by 0.6% and 0.3%, respectively, while the U.K.'s FTSE 100 index ended the day up by 0.9%.
Crude oil prices finished little changed on Thursday as a stronger-than expected employment report offset a stronger dollar and on reports OPEC isn't likely to cut production next month. Light sweet crude oil settled at US$71.94 per barrel, down 3 cents on the session. Earlier, oil had dropped below the US$71 mark.
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