RTTNews - Asian markets are mostly down in the red on Wednesday with the overnight weak close on Wall Street on the back of fresh concerns about the health of the financial sector and lower commodity prices forcing investors to indulge in some heavy selling. With a slew of economic reports from across the globe due for release over the next few days, the mood is extremely cautious in most of the markets in the region.
In the Australian market, energy and financials stocks are among the prominent losers today. Consumer discretionary and industrials stocks are also trading mostly trading lower. Technology, healthcare, utility and consumer staple stocks are exhibiting a mixed trend.
The Australian benchmark index S&P/ASX 200 is currently trading down by 89.6 points, or 2%, at 4,425. The broader All Ordinaries index is down by 87.3 points, or 1.9%, at 4,424.
Energy stocks Woodside Petroleum, Santos, Oil Search and Origin Energy are trading lower by 2% - 3%. Shares in Nexus Energy Ltd fell after the company said it had avoided asset sales by raising about A$31 million through an institutional placement. Nexus says it will call on shareholders for an additional A$43 million through a heavily discounted rights issue.
Among materials stocks, Rio Tinto is down by 2.3% and BHP Billiton is down with a 2.1% loss. Bluescope Steel, Fortescue Metals, Incitec Pivot and Onesteel are trading lower by 3% - 4%. Orica is down by 1.4%, while Newcrest Mining is down with a modest loss.
Among key bank stocks, ANZ Bank is down by nearly 3%, Commonwealth Bank of Australia is losing 2.1%, National Australia Bank is down by 2.8% and Westpac Banking Corporation is down by over 3%. Diversified financials stock Macquarie Group is down by about 3.3%.
Gunns Ltd has completed the institutional component of its A$145 million equity raising to finance the acquisition of the timber processing division of Elders Ltd subsidiary ITC. The institutional offer raised A$115 million from the issue of about 128 million shares at 90 cents per share. Gunns said the institutional entitlement offer was extremely well supported, with strong demand from both existing and new investors. Gunns said the retail component of the offer would raise about $30 million through the issue of about 33 million new shares. The Gunns stock is trading lower by nearly 12%.
According to a release from the Australian Bureau of Statistics, Australian real gross domestic product rose by a seasonally adjusted 0.6% in the June quarter as compared to an unrevised 0.4% in the March quarter. The median market forecast was for a rise of 0.2% in the June quarter and an expansion of 0.2% in the year to the end of the June quarter.
In the currency market, the Australian dollar opened lower today after a reassessment of U.S. financial stocks and lower commodities prices prompted a fresh bout of U.S. dollar and Japanese yen buying. In early trading this morning, the Aussie was quoting at US$0.8257/62, down 1.44 US cents, or 1.7%, from Tuesday's close of US$0.8402/05. The Australian dollar is currently trading at 0.8297 to the U.S. dollar.
In Tokyo, stock prices tumbled this morning with the overnight close on Wall Street and a stronger yen triggering a massive sell-off across the board. The benchmark index Nikkei was down by as much as 277 points, or 2.63%, at 10,253 at the end of the morning session.
With no major cues from the home front, investors were seen tracking the overnight development on Wall Street this morning. Bank, automobiles and electric machinery stocks were among the worst hit.
Steel, non-ferrous metals, machinery and pharmaceuticals stocks were also seen struggling. Shares of trading houses and insurance companies also suffered sharp losses.
Seven & I Holdings Co. is falling sharply following the company lowering its group net profit outlook for the year through February to an 18% increase on the year to 109 billion yen, from the previously forecast 33% jump to 123 billion yen.
Shares of Japan Wind Development Co. opened higher but declined after a while on selling pressure. Investors snapped up the stock in early trading on reports that Idemitsu Kosan Co., Mitsui Engineering & Shipbuilding Co. and Japan Wind Development will jointly build Japan's first wave power plant on the Pacific coast.
In the currency market, the U.S. dollar traded in the upper 92-yen zone early Wednesday in Tokyo, down from its levels overnight in New York. In early trading, the dollar fetched 92.71-72 yen, down from Tuesday's close of 92.86-96 yen in New York and 93.25-28 yen in Tokyo. The yen is currently trading at 92.83 to the U.S. dollar.
In the South Korean market, select stocks found support at lower levels and pulled the benchmark index up a bit from sharply lower levels. While bank, energy and technology stocks are exhibiting weakness, automobile stocks are showing some strength.
The benchmark index KOSPI, which fell to 1,593 earlier in the day, is currently trading at 1,617, down by around 6 points or 0.4% from its previous close.
Among key bank stocks, Korea Exchange Bank is down by 3.5% and KB Financial is trading lower by 2.8%. Woori Finance and Shinhan Financial are down by around 1.5%.
In the technology space, Samsung Electronics, LG Display LCD and LG Electronics are down by 1% - 2%, while Hynix Semiconductor is trading up by a modest 0.7%.
Steel stocks Hyundai Steel and POSCO are trading lower. Oil stocks SK Holdings and S-Oil are also trading weak.
Among shipbuilders, Hyundai Heavy Industries and Samsung Heavy Industries are down by 2% and 1.6%, respectively. Daewoo Shipbuilding is trading lower by 0.8% and STX Pan Ocean is up by 0.5%.
Airlines and telecom stocks are trading mixed. Automobiles, Kia Motor and Hyundai Motor are gaining 1% and 1.8%, respectively, while Ssangyong Motor is up by nearly 15%.
In the currency market, the South Korean won fell 0.8% against the U.S. dollar early this morning with increased volatility in global stock markets prompting investors to cut down positions on riskier assets. The won fell to 1,250.9 in early trading, down from Tuesday's domestic close of 1,240.7.
Among other markets in the Asia-Pacific region, Hong Kong and Indonesia are trading sharply lower with their key indices losing 1.6% and 1.89% respectively. New Zealand and Singapore are also down with notable losses. The Shanghai market is trading modestly higher. Taiwan is also trading firm. Stock markets across the region had closed mostly higher on Tuesday.
On Wall Street, stocks saw substantial weakness on Tuesday, as traders shrugged off some positive economic reports and chose to exit counters on fresh concerns about the health of the U.S. financial sector.
The Dow ended with a big loss of 185.68 points, or 2%, at 9,311, the Nasdaq declined by 40.17 points, or 2%, to 1,969 and the S&P500 closed down by 22.58 points, or 2.2%, at 998.
Major European markets closed notably lower, with the French CAC 40 index and the U.K.'s FTSE 100 sliding by 1.9% and 1.8%, respectively while the German DAX index fell by 2.5%.
Crude oil plunged toward US$68 per barrel as global stocks continued to decline, increasing worries over energy demand. Traders appeared to be looking for major jobs reports and the weekly petroleum inventory data. Light sweet crude for October delivery dropped to US$68.05, down US$1.91 on the session.
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