RTTNews - Mixed trading was witnessed among the major markets open for trading in Asia Pacific region on Thursday. Weaker closing on Wall Street raised fresh concerns about the prospects for economic recovery. Traders across the region are turning increasingly averse to the gloomy outlook for the economic recovery which received a jolt in the form of higher yields for government securities that might eventually dampen the hopes for interest rate cuts by banks to spur economic recovery. The markets in Hong Kong, China and Taiwan are closed for public holidays. While the markets in Australia, Malaysia and Singapore ended in negative territory, the markets in Japan, South Korea and Indonesia ended in positive territory. The market in India is trading in positive territory on the eve of expiry of near month derivative contracts.
In the U.S., a report from the National Association of Realtors said that U.S. existing home sales rose 2.9% to an annual rate of 4.68 million units in April from a downwardly revised rate of 4.55 million units in March. Economists had expected sales to rise to a 4.66 million unit rate from the 4.57 million unit rate originally reported for the previous month. While the pace of existing home sales increased compared to the previous month, total housing inventories at the end of April represented a 10.2-month supply compared with a 9.6-month supply in March. In another development, the Treasury Department's auction of $35.0 billion worth of 5-year notes drew a high-yield of 2.310% while attracting moderately strong demand, with the bid-to-cover ratio coming in at 2.32.
Across-the-board selling was witnessed in late trading on concerns higher cost of borrowing might apply brakes on economic recovery. The Dow closed down 173.47 points or 2.1% at 8,300, the Nasdaq closed down 19.35 points or 1.1% at 1,731 and the S&P 500 closed down 17.27 points or 1.9% at 893.
The Nikkei 225 Average opened weaker at 9,353 compared to its previous close at 9,439, mirroring the losses on Wall Street. However, automakers helped stage a smart recovery in early trading and a weaker yen encouraged exporters. Better than expected retail sales data also lifted sentiment. The index recovered the losses in early trading and moved above the unchanged line in afternoon session to the day's high of 9,493 before finally closing with a gain of 12.62 points or 0.13% at 9,451. The broader Topix Index of all first section issues ended at 896, up 2.74 points, or 0.3%.
On the economic front, the Ministry of Economy, Trade and Industry revealed that retail sales declined 2.9% year-over-year during April. Analysts expected the sales to drop 3.3% during the month. The retail sales for March were revised to a negative 3.8% from the previously announced 3.9% decline.
General chemical firm Asahi Kasei Corp. advanced 2.43% after JP Morgan Securities raised the rating for the company to buy and also revised the stock price target upwards, citing better prospects for the company in non-petrochemical business segments and relatively less reliance on petrochemicals.
Tech exporters Canon Inc edged up 0.63% and Sanyo Electric surged 5.24%. In the auto space, Toyota Motor advanced 2.70%, Honda Motor added 2.39% and Isuzu Motors added 2.58%.
Financial stocks ended mixed. Mitsuibishi UFJ added 0.32% and Resona Holdings rose 0.77%. However, Sumitomo Mitsui lost 1.13% and Mizuho Financial slipped 0.53%.
After opening unchanged from previous close at 3,795, the All Ordinaries Index in Australia slipped into negative territory on weak cues from Wall Street and continued to trade in the red for the rest of the session. Lower copper and oil prices dragged down the indices to as low as 3,737 by mid-day. Financial stocks were also weaker on concerns that rising yields might curtail attempts to reduce interest rates and pour cold water on recovery hopes. The index ended down by 41.40 points, or 1.09%, at 3,754. The benchmark S&P/ASX 200 Index followed a similar trend and ended up at 3756, down 45.4 points or 1.2%.
On the economic front, the Australian Bureau of Statistics revealed that total new private capital expenditure in the country declined a seasonally adjusted 8.9% in volume terms sequentially during the first quarter of 2009, higher than economists expectation of a 6% decline. In the fourth quarter of 2008, private capital expenditure rose 6%. In another report, the Conference Board stated that its Leading Economic Index increased for the second straight month by 0.4% in March, while the Coincident Index increased 0.2%.
Resource stocks led the decline after copper price slipped in the international market for the first time in five sessions. BHP Billiton lost 1.82%, Orica slipped 1.63%, Oz Minerals shed 4.63% and Rio Tinto edged down 0.56%
Crude oil price for July delivery closed lower by 28 cents at $63.19 a barrel in Asian trading, following concerns about economic recovery as bond yields advanced. On Wednesday, light sweet crude for delivery in July, rose $1 to end at $63.45, as traders looked forward to the oil inventory report and Thursday's OPEC meeting.
Mixed trading was witnessed among oil stocks. While Woodside Petroleum added 0.87%, Santos slipped 0.55% and Oil Search shed 1.11%.
Among the financials, ANZ Banking, which was on a trading halt on Wednesday ahead of its capital raising plan, led the decline, dropping 1.22%. Commonwealth Bank of Australia was down 3.36% Macquarie Group lost 2.05%, and Westpac Banking shed 191%. National Australia Bank edged down 0.55%.
Gold stocks advanced on higher bullion prices. Lihir Gold advanced 1.58%, New crest Mining added 0.37% and Sino Gold advanced 0.64%.
In South Korea, the benchmark KOSPI Index ended sharply higher as concerns about the threat from North Korea petered out and bargain hunting by institutional investors helped stocks across the board to post gains.
After opening lower at 1,356 compared to previous closing 1,362, mirroring the weak cues from Wall Street, the Kospi Index moved over the unchanged line in early trading led by automakers who stand to gain additional market share should the expected bankruptcy of General Motors materialize, which now seems all but inevitable. The markets turned negative briefly during mid-day on jitters about the economic recovery but bargain hunting at lower levels by institutional investors powered the stocks above the unchanged line once again and the index finally ended with sharp gain of 30.15 points or 2.12% at 1,392.
Heavyweight Samsung Electronics advanced 4.49% following news that the company renewed its licensing contract with memory chip-maker SanDisk of the U.S. LG Electronics gained 5.75% after forecasting better earnings results for the second quarter. Automakers Hyundai Motor, Ssangyang Motor and Kia Motors registered smart gains on expectation of bankruptcy filing by General Motors.
Rising sea freight rates and increased demand helped shipping stocks post impressive gains during the day. Hanjin Shipping gained 7.26% and STX Pan Ocean soared 11.02%.
The markets in Hong Kong, China and Taiwan are closed for public holidays.
In India, the stock market ended in positive territory amid volatile trading led by short covering in near-month derivative contracts that expired today. Positive momentum continued among the mid-cap and small-cap stocks. Weaker cues from Wall Street or other Asian and European markets had little or no impact on the Indian market.
The BSE Sensex closed at 14,296, up 186.37 points or 1.32%, while the Nifty gained 61.05 points, or 1.42% to close at 4,337.
Among the other major markets open for trading in the region, Indonesia's Jakarta Composite Index edged up 10.03 points or 0.53% to close at 1,903, while the Strait Times Index in Singapore shed 13.11 points, or 0.57% to close down at 2,293.
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