RTTNews - Major markets across the Asia-Pacific region ended in the red on Friday, mirroring the losses on Wall Street amid concerns about the pace of global economic recovery. Although the major averages in the region opened notably lower, buying that emerged thereafter helped them trim much of their losses over the course of the session. The Indian market shrugged off the weak regional sentiment and ended in positive territory on short covering and value buying.
Weekly jobs report released by the U.S. Labor Department for the week ended May 16th showed that first time jobless claims showed a smaller-than-expected decline in claims, but continuing claims rose further to a new historic high. The Philadelphia Federal Reserve's business activity index for the first half of May showed improvement but rose by less than expected, further mitigating risk appetite. However, the forward-looking indicators for April from the Conference Board came in slightly better than expected, raising some economic prospects for the near future.
The Dow closed lower by 129.91 points or 1.54% at 8292, the Nasdaq finished down by 32.59 points or 1.89% at 1695, and the S&P 500 slipped by 15.14 points to 888.
In Asian Trading, crude oil prices for July delivery edged up and ended at $61.36, up 35 cents, or 0.2%. Crude oil prices slipped 1.6% in New York and ended at $61.05.
In Tokyo, the Nikkei Index opened lower at 9,156 compared to its previous close at 9,264 on weaker cues from Wall Street. However, policy announcement and positive outlook issued by the Bank of Japan lifted the index almost into positive by mid-day. The strengthening of the local currency in reaction to comments by Finance Minister Kaoru Yosano that the government will not intervene in the currency market weighed on the market, as the index ended at 9,226, down 38.34 points, or 0.41%. The broader Topix Index of all first section issues lost 0.63% or 5.56 points, to close at 876.
On the economic front, a revised report from the Japanese Cabinet Office showed that the leading index stood at 76.3 in March, revised down from the initial estimate of 76.6. But the reading stood above February's 74.4.
The Bank of Japan, in a statement, said that it has unanimously decided to maintain the uncollateralized overnight call rate at 0.1%. The central bank also expanded the range of eligible collateral to ensure financial market stability by further facilitating money market operations. It has decided to accept bonds issued by the governments of the United States, the United Kingdom, Germany, and France as eligible collateral.
Further, the BoJ in its assessment of the economy said that economic conditions have been deteriorating, but exports and production are beginning to level out. Looking forward, exports and production are expected to start recovering despite the continuing weakness in domestic private demand, the bank opined.
Exporters declined after the local currency strengthened against the dollar. The local currency rose to 93.87 yen from previous its close in Tokyo at 94.56 yen per US dollar. Canon declined 1.86%, Sony Corp lost 2.00%, Toshiba Corp slipped 1.17% and Toyota Motor shed 2.19%.
Tire manufacturer Bridgestone Corp., declined lost 2.49% following reports that US automaker General Motors might file for bankruptcy during next week.
Japan Tobacco, the third-largest cigarette maker in the world, announced plans to increase the final dividend payable to shareholders. Following the news, the stock ended higher by 1.65%
Among banking stocks, Mizuho Financial shed 0.88%, Resona Holdings lost 1.32% and Sumitomo Mitsui declined 2.34%. Mitsubishi UFJ remained unchanged from previous close.
Oil stocks ended mixed. Inpex edged down 0.14% and Showa Shell slipped 0.11%, but Nippon Oil bucked the trend and ended higher by 1.07%.
In Sydney, the All Ordinaries Index opened unchanged at 3,805 and drifted down to 3,744 in early trading following weak cues from Wall Street. Energy and mining stocks slipped, forcing the index to trade in negative territory despite recovery attempts during the mid-day. The index ended firmly in negative territory and closed slightly above the day's low at 3,755, down 1.30% or 49.40 points. The benchmark S&P/ASX 200 Index followed a similar trend and ended lower by 52.30 points, or 1.40%, at 3,762.
No major economic reports were released during the day. In a statement, the Australian Government defended its stance on climate change legislation and hinted that the new scheme would result in mining industry losing as much as 24,000 jobs over the next decade.
Mining stocks declined, led by Rio Tinto following reports that Chinalco might not agree to the proposals made by Rio Tinto to restructure the US$19.5 billion deal. Sharp drop in metal prices also weighed on the mining stocks. Copper prices slipped 2.6% on the London Metals Exchange. Rio Tinto lost 3.30%, while BHP Billiton declined 2.73%.
Energy stocks also declined on lower crude oil prices in the international market. Woodside Petroleum slumped 4.43%, Santos shed 3.73% and Oil Search edged down 0.19%.
Citing global downturn as the primary reason, Wesfarmers, the owner of Coles super-market chain, decided to impose a freeze on salary payments and reduce bonuses to the senior management. The stock slipped 2.62% following the news. Among other retailers, David Jones lost 3.76%, Harvey Norman slipped 1.33% and Woolworths declined 1.15%.
Gold stocks bucked the weak sentiment and moved to the upside, tracking higher bullion prices. Lihir Gold advanced 1.59%, New crest Mining added 0.41% and Sino Gold surged 8.26%.
Mixed trend was witnessed among banking stocks, Commonwealth Bank of Australia slipped 0.28%, Australia and New Zealand Bank lost 1.41% and Westpac Banking lost 0.31%. However, National Australia Bank edged up by 0.51%.
In Hong Kong, the Hang Seng Index opened modestly lower at 17,170 but recovered immediately and moved above the unchanged line on short covering. However, the market could not sustain the gains and plunged into negative territory, dropping to a low of 6,740 by mid-day. In the after-noon session, the market staged a smart recovery, led by property stocks and trimmed part of its loss before finally ending at 17,063, down 0.80% or 136.97 points.
Weak cues from Wall Street and gloomy outlook for the economy triggered selling, with only seven of the 42 components of the index ending in positive territory. Banks, resource and china-related stocks were the major losers.
SHK Properties is the major gainer, having advanced 5.01% after the company unveiled new designs of low-density luxury residences where rooftops can be turned into private gardens. Another property stock New World Development gained 3.76%, while Sino Land edged up 0.51%.
Banks, insurance stocks and china-related stocks ended in negative territory.
In South Korea, the benchmark KOSPI Index ended at 1,404, down 17.90 points, or 1.26%, on increasing concerns about the pace of global recovery. The index opened sharply down by 15 points at 1,406. Although the index recovered by the mid-session, concerted selling of blue-chip stocks led the markets back to negative territory to close at 1,404.
Technology stocks were the major losers, with heavyweight Samsung Electronics down 2.31% and LG Electronics shedding 4.37%. Steel major POSCO lost 3.16%. Shipping related stocks also ended lower with Hyundai Heavy Industries losing 3.59%.
In India, the stock market is trading in positive territory with both the BSE Sensex and the Nifty Index rising smartly after opening weaker on global cues. Value buying and short covering were responsible for the strong performance, spearheaded by mid-cap stocks. Besides, positive sentiment ahead of the swearing in ceremony of the new prime minister also lifted the stocks.
The Sensex ended with a gain of 150.61 points, or 1.10%, at 13,887, while the broader Nifty index ended at 4238.50, up 27.60 points, or 0.66%.
Among the other major markets in the region, China's Shanghai Composite Index lost 13.02 points or 0.50% to close at 2,597, and Indonesia's Jakarta Composite Index slipped 4.01 points or 0.21% to close at 1,882. Singapore's Strait Times Index ended higher at 2,245 with a gain of 34.30 points or 1.55%, and Taiwan's Weighted Index gained 18.48 points or 0.28% to close at 6,737.
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