RTTNews - The markets across the Asia-pacific region extended the slide on Tuesday, mirroring weakness in Wall Street amid concerns about valuation of the stocks, and concerns about the pace and magnitude of global recovery. Japan's Nikkei however bucked the trend and ended in positive territory on bargain hunting at lower levels. Lower commodity prices also impacted market sentiment.
In the U.S., stocks finished Tuesday's session firmly in the negative despite positive housing starts data. Weaker-than-expected producer price index and industrial production numbers, however, dampened the early euphoria and disappointing sales numbers from Best Buy and comments from President Barack Obama impacted the sentiment amid fresh concerns about global recovery.
A report released by the Commerce Department revealed that housing starts rose sharply by 17.2% during May to an annual rate of 532,000 units from the revised estimate of 454,000 units in April. Economists had expected starts to rise to 485,000 from the 458,000 originally reported for the previous month. While single-family starts showed a notable 7.5% rise in May, the jump in housing starts was due in large part to a 77.1% surge in buildings with five units or more.
In a separate report, the Labor Department revealed that producer prices rose 0.2% in May, following a 0.3% percent increase for April. Economists expected the prices to rise 0.6% during the month. Core producer prices, which leave out the impact of volatile food and energy prices, edged down by 0.1% for May. In April, the figure was up by 0.1 percent.
The Federal Reserve, in a separate report, revealed that industrial production fell by 1.1% in May following a revised 0.7% decrease in April. Economists had been expecting production to fall 1.0%. The report also showed that capacity utilization fell to 68.3% in May from a revised 69.0% in the previous month. The capacity utilization rate had been expected to slip to 68.4% from the 69.1% originally reported for April.
The Dow closed down by 107.46 points or 1.3% at 8,505, the Nasdaq closed down by 20.20 points or 1.1% at 1,796 and the S&P 500 closed down by 11.75 points or 1.3% at 912.
The Nikkei 225 Average opened at 9,706 compared to its previous close of 9,753. However, Bank of Japan's positive economic assessment and bargain hunting by investors after two days of losses helped the index move above the unchanged line and end in positive territory. The index finally closed at 9,841, representing a gain of 87.97 points or 0.90%. The broader Topix Index of all first section issues ended at 923, up 8.27 points or 0.90%.
After two days of declines, crude oil prices ended higher by 52 cents at $70.99 a barrel in Asian trading. Light sweet crude oil finished Tuesday's New York session at $70.47, down $0.15, amid volatile trading
In its latest monthly assessment of recent economic and financial condition, the Bank of Japan, raised its view on the broad economy as well as key sectors of the economy, including exports and industrial production.
Most stocks advanced as investors went on bargain hunting, picking up stocks at lower prices amid underlying optimism about a global recovery. Specifically, green technology related stocks led the gains after Nomura Holdings has started a new global fund exclusively for the sector that implements the environment-friendly technology.
Sanyo Electric Co., engaged in the manufacture of rechargeable batteries, soared 13.93%, and GB Yuasa Corp. gained 12.49%.
Among financial stocks, Mitsubishi UFJ edged up 0.50%, Mizuho Financial added 1.62% and Resona Holdings added 0.22%. Among brokerages, Nomura Holdings added 0.49%.
In Australia, the All Ordinaries Index opened unchanged from its previous close at 3,958 and drifted into negative territory mirroring the losses on Wall Street Tuesday. Lower commodity prices and concerns about growth impacted sentiment. The index remained below the unchanged line throughout the session before closing at 3,904, representing a loss of 53.70 points, or 1.36%. The benchmark S&P/ASX 200 Index followed a similar trend and ended lower at 3,904, a loss of 58.40 points or 1.50%.
On the economic front, the Australian Bureau of Statistics said that the number of dwelling units commenced during the first quarter dropped 4% sequentially on a seasonally adjusted basis, following a revised 11.5% fall in the fourth quarter. Year-on-year, the housing starts were down 22.5% in the first quarter, reflecting a 16.3% fall in new private sector houses commenced and a 34.9% drop in new private sector other-residential buildings.
A survey released by Westpac Bank and Melbourne University revealed that the pace of economic contraction in the country slowed down in April. The Leading Economic Index for April declined an annualized 3.5 percent, compared to a contraction of 5.1 percent in March, the survey revealed.
Resource stocks dragged the market lower on weak commodity prices. BHP Billiton, the world's largest mining company, declined 2.19%. Rio Tinto edged down 0.14%. Nickel producer Mincor Resources fell 1.33%.
Gold stocks ended lower on lower gold prices. Lihir Gold declined 0.69%, Sino Gold lost 1.11%, and Newcrest Mining fell 1.65%.
Financial stocks also ended weaker. ANZ Bank fell 2.08%, Commonwealth Bank slipped 1.05%, National Australia Bank lost 0.82%, and Westpac Banking Corp. declined 1.31%.
Mixed trading was witnessed among oil stocks. While Woodside Petroleum edged up 0.15% and Santos gained 0.50%, Oil Search ended lower by 1.78%.
CSR Limited, having interest in building materials, sugar and aluminum, rose more than 6% after the company stated that it is planning to spin off its sugar unit.
In Hong Kong, the Hang Seng Index opened sharply lower at 17,985 compared to its previous close of 18,166 and continued to trade in the negative territory on weak clues from Wall Street and lower commodity prices. However, selective buying in bank stocks limited the losses and the market ended with a loss of 80.90 points, or 0.45%, at 18,085.
Property and resource stocks led the declines. Among resource stocks, Aluminum Corp. of China, or CHALCO, fell 1.00% on lower commodity prices. PetroChina lost 1.26% and CNOOC, the largest offshore oil company in China, declined 2.02%.
Property stocks also ended in negative territory. Hang Lung Property declined 3.12%, New World Development edged down 0.72%, Sino Land fell 1.33% and Henderson Land Development declined 2.98%.
Finance stocks ended mixed. ICBC Bank gained more than 2% and China Construction Bank advanced 1.3% on bargain hunting at lower levels. HSBC Holdings edged up 0.23%
In South Korea, the benchmark KOSPI Index ended in negative territory. After opening slightly weaker at 1,392 compared to previous close at 1,399, the market remained firmly in the negative territory amid volatile trading. Financials and steel stocks declined on concerns about global recovery while technology stocks gained on bargain hunting. The index ended in the negative territory at 1,392, representing a loss of 7.98 points, or 0.57%.
Steelmakers ended lower on demand concerns. Industry leader POSCO dropped 1.28% and smaller Hyundai Steel fell 1.49%.
Financial shares also ended weaker. KB Financial Group, which controls top lender Kookmin Bank, shed 3.59%, Woori Finance lost 2.86% and Samsung Securities fell 1.87%.
Technology stocks ended higher on bargain hunting at lower prices. Samsung Electronics, the leading computer memory-chip maker, jumped 1.77% and Hynix Semiconductor surged 3.4%.
In India, the stock market ended sharply lower as investors paused for locking gains in the recent rally amid weak global cues.
The BSE Sensex lost 435.07 points, or 2.91% to close at 14,523, and the broader Nifty Index shed 161.68 points, or 3.58%, to close at 4,356.
Among the other major markets in the region, China's Shanghai Composite Index managed to end in positive territory with a gain of 34.10 points, or 1.23% at 2,810. However, Strait Times Index in Singapore fell 16.71 points or 0.73% to close at 2,271, Taiwan Weighted Index edged down 0.40% or 24.90 points to close at 6,196, and Indonesia's Jakarta Composite Index, slipped 0.27%, or 5.40 points, to close at 2,025.
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