RTTNews - The markets across the Asia-pacific region ended weaker on Monday as commodity prices, which spearheaded the recent rally, reversed the trend and declined, raising concerns over global recovery. Valuation concerns following a sharp rally have dented the optimism as investors preferred to lock-in profits and remain in the sidelines awaiting clear signals on the economic front.
In the U.S., stocks finished Friday's session on a mixed note after traders were presented with mixed economic data. A report released by the Reuters / University of Michigan revealed that consumer sentiment continued to improve in the month of June. The preliminary reading of the consumer sentiment index for June came in at 69.0 compared to a reading of 68.7 in May. Economists had been expecting a somewhat more notable increase to 69.5.
Separately, a report from the Labor Department showed that import prices climbed by 1.3% in May, compared to an 1.1% increase in April. Export prices also rose, climbing 0.6% in May following an increase of 0.4% in the previous month. Compared to the same month a year ago, import prices fell 17.6%, while export prices slipped by 6.5%.
While the Nasdaq closed down 3.57 points or 0.2% at 1,859, the Dow closed up 28.34 points or 0.3% at 8,799 and the S&P 500 closed up 1.32 points or 0.1% at 946.
The Nikkei 225 Average opened slightly lower at 10,127 compared to its previous close of 10,136, and continued to tread below the unchanged line in negative territory as investors preferred to lock in profits, following the recent rally that helped the index surge past the psychological 10,000-mark. The index finally closed at 10,040, representing a loss of 96.15 points, or 0.95%. The broader Topix Index of all first section issues also slipped to 947, down 3.72 points, or 0.39%.
Crude oil prices ended lower, with a loss of $1.06 at $70.98 a barrel in Asian trading. Light sweet crude oil finished at $72.04, down 64 cents on Friday in New York, recovering partly from the session's low of $70.80 a barrel after OPEC lowered its demand forecast.
Financial stocks ended weaker on valuation concerns and the murky outlook for the global economy. Sumitomo Mitsui Financial slumped more than 6.5% following reports in the press that the company might sell more stock than earlier planned. Among other financials, Mitsubishi UFJ Corp. fell 3.22%, Mizuho Financial lost 3.70%, and Resona Holdings declined 2.17%.
Commodity stocks declined on weaker prices. Japan Petroleum Exploration lost 2%, Nippon Oil Corp. edged down 0.33%, and Showa Shell slipped 0.41%. Nippon Mining & Metals, the leading producer of copper in the country, lost 2.60%.
Realty stocks advanced after Daiwa Securities raised its outlook for the real estate industry in the country from underweight to neutral. Sumitomo Realty surged 6.79% and Tokyu Land Corp advanced 5.71%.
Retail stocks advanced after Merrill Lynch revised its outlook for the second largest retailer in the country, Aeon Ltd, on improving investor sentiment. Aeon gained 1.31% and Seven & I Holding added 0.84%.
In Australia, the All Ordinaries Index opened unchanged from its previous close at 4,062, but slipped into negative territory on lower commodity prices. The index remained below the unchanged line throughout the session before closing at the day's low of 4,030, representing a loss of 31.10 points, or 0.77%. The benchmark S&P/ASX 200 Index followed a similar trend and ended lower at 4,032, a loss of 30.50 points or 0.80%.
Resource stocks dragged the market lower on weak commodity prices. A measure of six metals traded in London Metals Exchange dropped 2.3% on Friday. Copper fell 2.6%, zinc shed 1.7% and nickel declined 0.7%.
BHP Billiton, the world's largest mining company, declined 2.73%, and rival Rio Tinto fell 2.20%. The third-largest iron-ore exporter, Fortescue Metals, declined more than 7% following a 2% drop in cash prices for Iron-ore exported to China. Oz Minerals slumped 4.31% after Citigroup downgraded its stock rating to sell from hold.
However, iron-ore mining company, Atlas Iron bucked the trend and surged up more than 17% after announcing plans to sell shares for funding its expansion projects.
Gold stocks also showed weakness on lower gold prices. Lihir Gold shed 1.35%, Newcrest Mining lost 1.38% and Sino Gold slumped 4.00%. Among oil stocks, Woodside Petroleum lost 1.59%, Santos fell 1.00% and Oil Search shed 2.85%.
Among financial stocks, Commonwealth Bank added 1.08%, and National Australia Bank rose 0.77%. Australia and New Zealand Bank remained unchanged from previous close, while Westpac Banking Corp. fell 0.25%.
In Hong Kong, the Hang Seng Index opened weaker at 18,712 compared to its previous close of 18,890, and continued to drift lower on lower commodity prices. The index finally ended with a loss of 391 points, or 2.07%, at 18,499.
Almost all the components of the index, except two, ended in negative territory on valuation concerns and profit taking
Among resource stocks, Aluminum Corp. of China, or CHALCO, slumped 4.49% on lower commodity prices. PetroChina lost 3.33% and CNOOC, the largest offshore oil company in China, fell 3.32%.
Property stocks also ended in negative territory. New World Development lost 2.81%, Sino Land fell 3.85% and SHK Property declined 2.48%.
In South Korea, the benchmark KOSPI Index ended in negative territory on lower commodity prices and concerns about global recovery. After opening slightly weaker at 1,428 compared to previous close at 1,429, the market continued to drift downward as investors dumped banks and shipbuilders amid lingering jitters over an economic recovery. The KOSPI Index ended lower with a loss 16.17 points, or 1.13% at 1,412.
Financial shares ended weaker on concerns about global recovery. Hana Financial Group tumbled 4.81%, KB Financial Group, which controls top lender Kookmin Bank, shed 0.71%, and Samsung Securities plunged 2.74%.
Among shipping firms, shipbuilder Hyundai Heavy Industries fell 3.37% and Hanjin Shipping dropped 3.84% on concerns that rising crude prices could drive up their operating costs.
Tech bellwether Samsung Electronics lost 0.86% and automaker Hyundai Motor dropped 0.55%.
Among the gainers, Hynix Semiconductor rose 0.39% and LG Electronics advanced 2.08%. Steelmaker POSCO advanced 3.22% percent amid the news of rises in steel prices in China and the U.S.
In India, the stock market ended in the negative territory on weak global cues and profit taking.
The BSE Sensex lost 362.42 points or 2.38% to close at 14,876, and the broader Nifty Index shed 2.17% or 99.60 points, to close at 4,484.
Among the other major markets in the region, China's Shanghai Composite Index ended higher by 45.79 points or 1.67% at 2,790, while Strait Times Index in Singapore lost 60.51 points or 2.55% to close at 2,317, Taiwan Weighted Index lost 3.45% or 222.67 points to close 6,226, and Indonesia's Jakarta Composite Index, fell 1.01%, or 21.07 points, to close at 2,070.
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