RTTNews - The major markets across the Asia-Pacific region ended in negative territory on Thursday, mirroring Wall Street's losses after the minutes of the FOMC meeting revealed doubts over signs of recovery in the world's largest economy. Fed Officials foresee more downward risks to the economy and revised their GDP outlook for the year downward. However, strong commodity and oil prices helped limit the downside to a certain extent and broader sentiment appears to be positive as cautious investors with huge of pile of cash stay on the sidelines, waiting for the right opportunity to make an entry.
The Dow closed lower by 52.81 points or 0.62% at 8422, the Nasdaq finished down by 6.70 points or 0.39% at 1728, and the S&P 500 slipped by 4.66 points, or 0.51% to 903.
In Asian trading, crude oil prices for July delivery eased to $61.31, down 73 cents from previous close of $62.04 in New York Mercantile Exchange on Wednesday. A second successive weekly decline in oil inventories reported by the U.S. Energy Department drove up oil prices by $1.94 in New York trading yesterday.
In Japan, the Nikkei Index opened lower at 9,280 compared to its previous close at 9,345 and drifted down further to a low of 9,190 in early trading. After remaining in a narrow range for much of the session, the index managed to recover some of the losses, led by resource stocks, before closing at 9,264, down 0.9% or 80.49 points. The broader Topix Index of all first section issues shed 0.6% or 4.86 points, to close at 881.
On the economic front, the Ministry of Economy, Trade and Industry reported that an index measuring the tertiary industrial activity fell to a seasonally adjusted 4.0% to 100.8 month-on-month during March. Analysts expected the index to fall 1.5% compared to a revised drop of 1.3% in February. The Health Ministry confirmed yesterday that as many as 234 cases of swine flu have been registered in the country in the past few days.
Supermarket operator Aeon declined 3.17% following reports of swine flu in the Tokyo Area. Seven & I Holdings slipped 2.28% and McDonalds Holdings shed 2.68% following confirmation that two part time employees of the company were confirmed to be infected by swine flu.
Exporters declined after the local currency strengthened against the dollar. Canon declined 2.42%, Fanuc slipped 2.85%, Sony Corp edged down 0.20% and Toshiba Corp lost 3.66%.
Tokyo Marine, which reported a 79% drop in net income for the year ended 31 March 2009 due to losses on security holdings, slipped 2.83%. However, the company forecast a sharp increase in profits for the current year.
Among the banking stocks, Mitsubishi UFJ, Japan's biggest bank, declined 1.66%, Mizuho Financial shed 0.87%, and Resona Holdings edged down 0.28%. Sumitomo Mitsui however ended higher by 0.79%.
Shares of farm equipment maker Kuboto advanced 2.88% after Nomura Securities raised the share price target of the company following the release of earnings report for fiscal 2008.
Mitsubishi Materials, the third largest producer of copper in the country, gained 2.77% following reports that the company is planning to increase its output. Copper prices rose 2.4% on London Metals Exchange on Wednesday.
In Sydney, the All Ordinaries Index, having opened unchanged from previous close at 3809, drifted down to 3,783, led by financials on weak cues from Wall Street. Resource stocks advanced on higher metal prices, helping to trim the losses of the market. The index closed with a loss of 4.20 points, or 0.11%, at 3,805. The benchmark S&P/ASX 200 Index followed a similar trend and ended lower by 10.7 points, or 0.28%, at 3,814.
On the economic front, the Australian Bureau of Statistics revealed that total earnings of full time working adults in the private and public sector rose a seasonally adjusted 5% year-on-year in February. In another report, the Statistics Bureau stated that new motor vehicle sales increased by a seasonally adjusted 0.9% in April from March, but were still sharply lower than one year ago.
Mining stocks rose, as a measure of six metals traded on the London Metals Exchange advanced 1.2%. Copper prices gained 2.4%. BHP Billiton, the largest mining company, gained 0.58%. Rival company, Rio Tinto gained 2.86% following reports in the media that Chinalco might favorably consider the former's proposal to restructure the US$19.5 billion deal.
Gold stocks moved to the upside, tracking the higher bullion prices. Lihir Gold advanced 3.86%, New crest Mining added 1.74% and Sino Gold gained 2.96%.
Oil stocks ended in negative territory following crude oil prices receding in the Asian session. Woodside Petroleum slipped 0.91%, Santos shed 0.47% and Oil Search was lower by 0.97% from previous close.
Banking stocks were the major losers., reacting to the negative sentiment on Wall Street. Commonwealth Bank of Australia declined 1.66%, National Australia Bank slipped 1.68% and Westpac Banking lost 1.27%. Australia and New Zealand Bank, however, bucked the trend and edged up 0.51%.
Retail stocks also ended weaker. David Jones slipped 0.53%, Harvey Norman shed 1.96%, Wesfarmers lost 3.61% and Woolworths declined 1.40%.
In Hong Kong, the Hang Seng Index opened sharply lower at 17,290 and continued to drift lower. Attempts to stage a recovery during mid-day trading proved futile and the index finally ended lower by 1.58% or 276.35 points, at 17,199.
Profit taking across all stocks after a strong rally in the past few trading sessions as well as gloomy outlook for the future sent the stocks lower.
All components in the index, except four, ended in negative territory. Bank, property and resource stocks drifted lower.
Conglomerate Citic Pacific, having interests in power generation, aviation, civil engineering, mining and retail in Hong Kong and on mainland China, is the major gainer, advancing 5% after the company announced a series of measures to restructure its core businesses.
In South Korea, the benchmark KOSPI Index ended at 1,422, down 14.05 points, or 0.98%. The index opened lower by 4 points at 1,431 and continued to drift lower before closing at 1,422.
The market witnessed across the board weakness, as investors dumped stocks on weak prospects for a global economic recovery. Shipping and technology stocks were worst hit.
Among the shipping stocks, Hanjin Shipping declined more than 7% while Korea Line declined about 6%. Market heavyweight Samsung Electronics lost 2.26%.
In India, the Indian market ended sharply lower, as traders took profits in frontline stocks and bought under-valued smallcap stocks. Weak cues from the overseas market also kept the large-cap indexes under check. The Sensex closed at 13,737, down 324 points or 2.31%.
Among the other major markets in the region, China's Shanghai Composite Index slipped 40.79 points or 1.54% to close at 2,611, and Singapore's Strait Times Index fell 2.57% or 58.27 points to close at 2,211. The market in Indonesia was closed, while the Taiwanese Weighted Index bucked the overall trend and ended higher by 15.19 points or 0.23% at 6,719.
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