RTTNews - Despite opening on a fairly strong note, most of the Asian markets are off their highs on Wednesday with participants turning cautious on concerns over the state of the global economy. The slump in Japanese exports is weighing on the markets as well. Right now, investors appear to be waiting for the outcome of the U.S. Federal Reserve Open Market Committee meeting.
In the Australian market, stocks are displaying a mixed trend today amid lackluster trades. Select energy and materials stocks are trading higher. A few stocks from healthcare and telecommunications sectors are also trading firm.
Bank stocks are exhibiting some weakness. Industrials and utilities are also seen struggling for support. Consumer staples and consumer discretionary stocks remain subdued today.
Media firm Ten Network Holdings has reported a 36.6 per cent drop in earnings for the year to date and said it would not pay a final dividend for fiscal 2009. Ten Network reported earnings before interest, tax, depreciation and amortization of A$128 million for the nine months to May 31, 2009, down from A$201.9 million in the prior year's corresponding period. Revenue for the nine months dropped 12.6 per cent to A$678.6 million. The company reported television revenue for the third quarter of $174.1 million, down 15 per cent from the prior year's corresponding quarter. The stock is trading nearly a per cent down from its previous close.
The Australian benchmark index S&P/ASX 200, which had slipped to 3,768 after hitting a high of 3,812 in early trading, is currently down by 11 points at 3,786. The All Ordinaries index is trading 10.4 points down at 3,782.6. On Tuesday, the S&P/ASX 200 had ended down 121.9 points or 3.1% at 3,797. The All Ordinaries index closed lower by 117.8 points or 3.01% at 3,793.
In Tokyo, stock prices drifted lower after a positive start and ended the morning session in negative territory. However, upon resumption, select stocks are edging higher and the benchmark Nikkei is currently trading in positive territory at 9,571.25, up 21.64 points or 0.23% over its previous close. The Nikkei had ended the morning session at 9,544.09.
On Tuesday, the Nikkei had ended with a big loss of 276.66 points or 2.82% at 9,550 on weak cues from Wall Street, lower commodity prices and gloomy outlook for the global economy.
Construction, textiles, real estate stocks are currently trading mixed. Automobile and bank stocks are also seen exhibiting a mixed trend. Foods, chemicals, pharmaceuticals, steel, non-ferrous metals and machinery are mostly trading firm. Insurance and securities stocks are also seen attracting some buying.
Nissan Motor Co. rose higher following the U.S. government agreeing to offer a low-interest loan of 1.6 billion dollars, or 150 billion yen, to support the company's development of eco-friendly vehicles. After falling nearly 5% on Tuesday, the stock moved up sharply this morning on technical rebound and the positive news flow. However, after initial buoyancy, the stock pared its gains and is currently trading in the red.
Showa Shell Sekiyu KK shares rose sharply Wednesday, climbing 9.6% to hit a year-to-date high of 1,077 yen, on reports that the firm plans to set up solar power facilities in Saudi Arabia jointly with Saudi Arabian Oil Co., attracting buying from investors targeting solar-related issues. On May 26, Showa Shell had announced its aim to generate sales of 50 billion yen from the solar cell business in fiscal 2014, amounting to half of its group pretax profit target for the full year. The stock is currently trading up 8.2% at 1,064 yen.
On the economic front, Japan posted a 299.8 billion yen merchandise trade surplus in May, Finance Ministry data showed Wednesday, marking the fourth straight month of surplus. The figure was better than the 214.6 billion yen surplus expected by economists polled by Dow Jones Newswires and the Nikkei. The surplus was 12.1% narrower than in the same month a year earlier.
Exports in May fell 40.9% from a year earlier, the eighth straight month of decline on weak overseas demand for cars, steel and electronic parts, the data showed. Imports dropped 42.4% in May, the data showed, marking the seventh straight month of decrease.
In other economic news, a release from the Bank of Japan revealed the corporate services price index plunged 3% year on year to 92.4 in May, the sharpest decline since the data began to be compiled in 1985. The decline was attributed to lower crude oil prices and overall sluggish demand. The index dropped 0.3% from April, down for the second straight month. By industry, prices in the transport sector slid 10.7% year on year, while the advertising industry saw a record 6.6% decline. The index gauges the overall level of prices that companies pay for services.
In the South Korean market, bank stocks are mostly trading weak. Oil and energy stocks are subdued, while automobiles are trading mixed.
Technology stocks are seen trading firm, with Hynix Semiconductor, LG Electronics and LG Display LCD posting sharp gains. Market heavyweight Samsung Electronics is trading modestly higher.
Steel stocks are trading flat. Telecom stocks are exhibiting weakness while shipbuilders and airliners are trading mixed.
The Korean benchmark KOSPI is down by 5 points at 1,355.54. Earlier, after moving on to 1,367, the index had dropped down to around 1,350. The KOSPI had ended 39.17 points or 2.8% down at 1,361 on Tuesday following losses on Wall Street, amid concerns about global recovery.
Among other markets in the Asia-Pacific region, Shanghai and Hong Kong are trading with modest gains. Indonesia, Singapore and Taiwan are up sharply, while the New Zealand market is trading lower.
On Tuesday, stocks ended little changed on Wall Street after a choppy ride. Volumes were thin as traders mostly stayed on the sidelines ahead of the release of the Federal Reserve's outlook on interest rates. A lower than expected rise in existing homes sales also weighed to an extent.
The major averages finished on opposite sides of the unchanged mark by only mild margins, unable to sustain any notable moves on the day. While the S&P 500 finished up by 2.06 points or 0.2 percent at 895.10, the Dow slipped by 16.10 points or 0.2 percent to 8,322.91, and the Nasdaq dropped by 1.27 points or 0.1 percent to 1,764.92.
Major European markets finished the day on opposite sides of the unchanged line. The French CAC 40 Index and the U.K.'s FTSE 100 Index slipped by 0.2 percent and 0.1 percent, respectively, while the German DAX eked out a 0.3 percent gain.
Oil jumped higher on Tuesday as investors looked ahead to the Energy Information Administration's weekly inventory report, which is expected to show a drop in stockpiles on Wednesday. Light sweet crude for August delivery rose to US$69.24 per barrel, up US$1.74 on the session. Prices rallied as high as US$69.68 after falling to as low as US$ 66.37.
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