RTTNews - The markets across the Asia-pacific region ended weaker on Tuesday, mirroring weakness on Wall Street as fresh concerns were raised about the pace and magnitude of global recovery amid weak economic fundamentals. Lower commodity prices and valuation concerns following recent run up also impacted market sentiment.
In the U.S., stocks finished Monday's session substantially weaker as traders did some profit taking following the recent rally, with some disappointing economic data raising concerns that stocks have come too far too fast in light of the near-term economic outlook.
A report released by the New York Federal Reserve revealed that conditions for manufacturers in the region have deteriorated at a faster pace during June compared with May. The New York Fed said its general business conditions index fell to a negative 9.41 in June from a negative 4.55 in May, with a negative reading indicating a deterioration in conditions. Economists had expected the index to edge down to a negative 5.10. Another report released by the National Association of Home Builders revealed that the National Association of Home Builders/Wells Fargo Housing Market Index fell to a reading of 15 in June from a reading of 16 in May. Economists had been expecting the index to edge up to a reading of 17.
The Dow closed down 187.12 points or 2.1% at 8,612, the Nasdaq closed down 42.42 points or 2.3% at 1,816 and the S&P 500 closed down 22.49 points or 2.4% at 924.
The Nikkei 225 Average opened sharply lower below the 10,000-mark at 9,914 compared to its previous close of 10,040, and continued to tread below the unchanged line in negative territory as investors preferred to sell stocks amid concerns about a global recovery and the stronger local currency. The index finally closed at 9,753, representing a loss of 286.79 points, or 2.86%. The broader Topix Index of all first section issues ended at 915, down 32.06 points, or 3.39%.
Crude oil prices ended almost flat at $70.63 a barrel in Asian trading. Light sweet crude oil finished at $70.63, down $1.42, on Monday in New York on concerns about weak demand.
At the conclusion of the two-day meeting, the Bank of Japan retained its uncollateralized overnight call rate at 0.1%., which was in line with expectations. Commenting on the economic assessment, BOJ stated that amid continuing weakness in economic conditions, exports and production are beginning to level out against the backdrop of progress in inventory adjustments.
Across the board selling was witnessed on concerns about the global economic outlook. The stronger yen dragged the exporters and traders down. Lower commodity prices also affected market sentiment.
Trading house Mitsubishi Corp. slipped 5.01% and Sumitomo Corp. fell 4.54%. Electronics firm Sony Corp, declined 3.04%.
Financial stocks ended weaker on the bleak outlook for the global economy. Mitsubishi UFJ lost 4.75%, Mizuho Financial lost 5.00%, Sumitomo Mitsui Financial fell 1.98% and Resona Holdings declined 4.02%. Among brokerages, Nomura Holdings lost 8.82%.
In Australia, the All Ordinaries Index opened sharply lower at 4,015 compared to its previous close at 4,030, and continued to drift lower mirroring the weak closing on Wall Street Monday and the continued fall in commodity prices. The index remained below the unchanged line throughout the session before closing at 3,958, representing a loss of 72.50 points, or 1.80%. The benchmark S&P/ASX 200 Index followed a similar trend and ended lower at 3,963, a loss of 69.20 points or 1.72%.
Resource stocks dragged the market lower on weak commodity prices. BHP Billiton, the world's largest mining company, declined 1.46%. Rio Tinto fell 3.01%. The company closed its $15 billion rights issue today and would go ex-dividend from tomorrow. Nickel producer Mincor Resources slumped more than 8.5% on weaker nickel prices.
Among oil stocks, Woodside Petroleum lost 3.20%, Santos shed 4.85% and Oil Search fell 2.93%.
Financial stocks also ended weaker. Commonwealth Bank slipped 0.29%, National Australia Bank lost 1.26%, Australia and New Zealand Bank fell 2.89% and Westpac Banking Corp. edged down 0.05%.
Mixed trading was witnessed among gold stocks. While Lihir Gold edged down 0.34% and Sino Gold slumped 5.95%, Newcrest Mining bucked the trend and ended with a gain of 0.13%.
In Hong Kong, the Hang Seng Index opened sharply lower at 18,236 compared to its previous close of 18,499, and continued to drift further down mirroring the weak closing on Wall Street and renewed concerns about global recovery. The index finally ended with a loss of 333 points, or 1.80%, at 18,166.
Property and resource stocks led the declines. Among resource stocks, Aluminum Corp. of China, or CHALCO, fell 3.49% on lower commodity prices. PetroChina lost 2.56% and CNOOC, the largest offshore oil company in China, slumped 5.53%.
Property stocks also ended in negative territory. Hang Lung Property plunged 6.61%, New World Development lost 4.40%, Sino Land fell 3.68% and Henderson Land Development declined 2.90%.
Finance stocks ended mixed. While Bank of China added 1.08% and China Construction Bank gained 1.42%, all other stocks in the sector ended in negative territory.
In South Korea, the benchmark KOSPI Index ended in negative territory mirroring the weakness on Wall Street and concerns over global recovery. After opening slightly weaker at 1,395 compared to previous close at 1,412, the market remained firmly in the negative territory amid volatile trading. Technology stocks dragged the indices down amid bargain hunting at lower prices and the index firmly ended in the negative territory at 1,399, representing a loss of 13.27 points, or 0.94%.
Technology stocks ended weaker. Industry leader Samsung Electronics lost 2.42%, and LG Electronics fell 3.67%. Automakers also ended lower on concerns about global recovery. The country's leading carmaker Hyundai Motor closed down 2.36% and Kia Motors shed 3.66%.
Financial shares also ended in negative territory. Samsung Securities fell 2.11% and Hana Financial Group lost 1.5%.
However, telecom-related stocks ended in positive territory on expectations of better earnings. . Leading fixed line telecom operator KT rose 1.33% and SK Telecom added 0.84% .
In India, the stock market shrugged off the weak cues in global market and ended in positive territory on pre-budget announcements and expectations of stimulus package in the budget.
The BSE Sensex gained 82.39 points, or 0.55% to close at 14,958, and the broader Nifty Index added 33.80 points, or 0.75%, to close at 4,518.
Among the other major markets in the region, China's Shanghai Composite Index lost 13.53 points, or 0.48% to close at 2,776, Strait Times Index in Singapore lost fell 28.40 points or 1.23% to close at 2,288, Taiwan Weighted Index edged down 0.08% or 4.75 points to close 6,221, and Indonesia's Jakarta Composite Index, fell 1.91%, or 39.51 points, to close at 2,030.
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