RTTNews - With participants choosing a cautious path, stock markets in the Asia-Pacific region are exhibiting a mixed trend on Thursday. With doubts about a quick economic revival surfacing again following mixed reports from the U.S., Europe and other regions, markets across the globe have been finding it increasingly tough to hold at higher levels over the past few sessions.
After opening flat this morning, the Australian market rallied higher but only to decline sharply into the red, led by a fall in key material stocks BHP Billiton and Rio Tinto. Despite rebounding subsequently on the back of some strong buying in stocks from the banking, utilities, consumer staples and healthcare sectors, the market has faltered into the red once again due toa lack of support at higher levels.
The Australian benchmark index S&P/ASX 200 is down by 10 points at 3,894. The broader All Ordinaries index is trading lower by 15 points at 3,889.
According to a survey by the Australian Chamber of Commerce and Industry (ACCI) - Westpac, there has been a massive jump in business confidence despite actual conditions staying around levels not seen since the 1991/92 recession. The actual composite index rose 3.9 points to 38.9 in the June quarter. Business sentiment bounced by a strong 57 points - the largest improvement since 1975 - to a reading of minus four, the highest outcome since the December quarter of 2007 and compared with a decade average of minus six.
Meanwhile, a report released by the Australian Bureau of Statistics showed that merchandise imports into Australia fell by a seasonally adjusted A$801 million in May. Unadjusted, merchandise imports fell by nine per cent, or A$1.496 billion, to A$14.712 billion, from a downwardly revised A$16.208 billion in April.
Imports of mineral fuels, lubricants and related materials rose to A$1.847 billion in April from A$1.872 billion a month earlier, while imports of machinery and transport equipment fell to A$5.540 billion, from A$5.985 billion.
Australian oil and gas firm Santos Ltd has agreed to sell liquefied natural gas from its Gladstone project to venture partner Malaysia's Petronas, securing its first sales contract for the project. Santos has agreed to sell 2 million tonnes of LNG a year to the state-owned Petroliam Nasional Berhad, also known as Petronas, for 20 years beginning in 2014. Santos is currently trading with a sharp gain.
Macarthur Coal Ltd is raising about A$190 million (US$151 million) via an equity issue to funds its future growth, riding on a recent rally in stock markets. China's CITIC Group, Macarthur's biggest shareholder, will participate in the offer and maintain its 23.39 percent holding in Macarthur's expanded capital, Macarthur said in a statement on Thursday. The new shares are being offered at A$6.00 each, a 9.4 percent discount to its last traded price. Trading in its shares has been halted pending completion of the offer.
In another corporate news, engineer and builder Decmil Group's subsidiary and its joint venture partners have bagged a A$500 million contract to design and construct an accommodation village for Chevron Australia Pty Ltd on Barrow Island, off the Western Australian coast. Decmil's share of the total contract value is expected to be around $170 million, making it the company's largest single contract. The stock of the Decmil, earlier known as Paladio Group, is up with a hefty gain at present.
In Tokyo, stock prices tumbled on growth concerns and a stronger yen. Bank stocks fell, tracking the overnight fall of U.S. financial stocks. Construction, food, textiles Steel, non-ferrous metals, machinery and electric machinery stocks were mostly trading lower in the morning session with a few of them posting sharp losses. Real estate, insurance, chemicals and pharmaceuticals stocks were seen exhibiting a mixed trend.
The Nikkei was down 177 points or 1.8% at 9,663 at the end of the morning session.
In the Korean market, automobile stocks, Kia Motors and Ssangyong Motor are trading higher by 2% and 1.5% respectively while Hyundai Motor is trading with a modest gain. Bank and technology stocks are also trading reasonably firm.
Oil and telecom stocks are trading weak, while steel and shipbuilding stocks are up modestly.
The Korean benchmark index KOSPI, which had slipped to 1,378 earlier in the day, is currently trading at 1,393, up by around a couple of points over its previous close.
Among other markets in the Asia-Pacific region, Hong Kong, Indonesia and Singapore are trading lower. New Zealand, Taiwan and Shanghai markets are trading in positive territory.
After a choppy ride, amid mixed sentiment with regard to the near-term prospects of the economy and the proposed financial system reforms from the Obama administration, the major indices closed flat on Wall Street on Wednesday. The data on consumer prices showed a modest increase in the month of May, but the rise was less than what the economists had expected.
Unable to hold on to their earlier gains, the Dow slipped 7.49 points to 8,947 and the S&P 500 dropped by 1.26 points to 911. The Nasdaq, however, ended higher by 11.88 points at 1,808.
Major European markets all closed firmly in the red, with the French CAC 40 Index and the German DAX Index falling by 1.6 percent and 1.9 percent, respectively. The U.K.'s FTSE 100 Index also finished notably lower, dropping by 1.2 percent.
Oil prices finished a choppy session modestly higher on Wednesday in U.S. trading as investors mulled the Energy Information Administration inventories report. Oil gained strength in the afternoon as the dollar gave back some early gains. Light sweet crude ended the day at US$71.03, up 56 cents.
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