RTTNews - Asian markets are trading weak on Monday with participants indulging in heavy selling on concerns over the U.S. economy and corporate earnings. Most of the markets in the region bounced back after a weak start, but have subsequently plunged sharply into the red, with investors remaining wary of holding positions at higher levels.
In the Australian market, stocks led by those from the resources sector tumbled on Wall Street cues and lower commodity prices. Bank, healthcare, industrials and consumer staples stocks are the other major losers.
Among the few notable gainers, WorleyParsons is up 2.5%, Leighton Holdings is trading 1.5% higher and transport group Transurban is gaining 1.6%.
The Australian benchmark index S&P/ASX 200 is currently down by 35 points at 3,759. The broader All Ordinaries index is trading lower by 31 points at 3,759.6.
Mirrabooka Investments Ltd reported a marginal rise in annual net operating profit, after the value of its portfolio fell and dividend earnings declined. Tough market conditions due to the global economic downturn saw the value of its portfolio fall by 19.4% in 2008/09. The company's net operating profit before gains on investments was A$8.38 million for the year ended June 30, up slightly from A$8.28 million in the previous year. The company's stock is currently trading with a gain of 4.5%.
CSR Limited is reportedly considering a range of options regarding the demerger of its sugar and renewable energy business. The group said in a statement that it would take a final decision on the structure of the two businesses on demerger and would inform investors of new developments. The stock is down nearly a percent now.
In economic news, households are reluctant to take on new loans due to the uncertain economic climate, a release from the Australian Bureau of Statistics revealed. The report said the value of personal loans fell by a seasonally adjusted 2.9% in May, compared with April, to A$6.03 billion, the lowest amount since November 2005.
However, according to the report, the value of home loans in the same month rose 2.3% to a record A$17.05 billion. The report also showed that despite tough economic conditions, commercial finance jumped 4% in May to A$28.26 billion, though lease finance fell 1.9% to a nine-year low of A$412 million.
In the currency market, the Australian dollar opened weak today as concerns over the U.S. economy hurt sentiment. The Aussie traded at US$0.7786/91 earlier this morning, down from Friday's close of US$0.7795/98. Currently, the Australian dollar is trading at 0.7781 to the U.S. dollar.
In Tokyo, the Nikkei is down by as much as 151 points or 1.63% at 9,136.22, with stocks across the board seeing a sell-off due to economic and political concerns. After a weak start, the Japanese market rebounded into positive territory, but faltered as selling resumed in several front line stocks on a stronger yen and political uncertainty following the ruling coalition suffering a defeat in a key local election.
Automobile and banking sectors are seeing stock-specific action. Shares of Toyota Motor Corp. rose moderately this morning on reports that the automaker has received about 1,500 preorders for its Lexus HS hybrid slated to hit the market on Tuesday.
Construction, chemicals, electric machinery and foods stocks are trading mixed. Pharmaceuticals stocks are bucking the trend to an extent. Shares of Daiichi Sankyo bounced back after three days of losses. The stock rose sharply on frenzied buying this morning and is currently trading over 3% up. The stock is in focus following the company receiving approval from the Food and Drug Administration of the U.S. for Effient, an anti-clotting medicine known generally as Prasugrel.
Textiles are mostly down in negative territory. Steel, ceramics, non-ferrous metals and machinery stocks are also mostly down in the red.
In the Korean market, technology, bank, oil and shipbuilding stocks are trading weak. In the automobile space, Kia Motor is down by 3.7% and Hyundai Motors is trading lower by 2%. Ssangyong Motors is up nearly 2%.
Among bank stocks, KB Financial, Korea Exchange Bank and Shinhan Financial are trading lower by 1.5%-2%. Woori Finance is up 0.4%. Among technology stocks, LG Electronics is down nearly 4%, Samsung Electronics is trading lower by 2.6% and Hynix Semiconductor is down by 1.3%. LG Display LCD, which is faring relatively better, is down by 0.8%.
Oil stock SK Holdings and S-Oil are down with notable losses. Energy stock KEPCO is down by 1.5%. Steel stocks Hyundai Steel and POSCO are trading down 2.6% and 2% respectively.
Telecom stocks KT Corp and SK Telecom are down by around 1.6%. Among airliners, Asiana Airlines and Korea Airlines are down by 1.3% and 0.5% respectively. Shipbuilding stocks are also exhibiting weakness. Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding are down by 2%-3%. Bulk carrier STX Pan Ocean is up with a modest gain.
The Korean benchmark index KOSPI opened modestly lower at 1,426, but fell sharply to 1,395 as stocks across various sectors tumbled on selling pressure. Currently, the index is trading at 1,398.60, down nearly 30 points or 2.1% from its previous close.
Among other markets in the Asia-Pacific region, Hong Kong, Taiwan and Indonesia are trading sharply lower, with their key indices losing 2%-3% from Friday's closing levels. The Straits Times index of the Singapore market is down by 1.2%. Shanghai and New Zealand are also trading weak. Stock markets across the region had ended Friday's session mostly lower.
On Friday, Wall Street ended lower after a lackluster show. The major averages saw some upside in late session dealing, with only the Nasdaq being able to climb into positive territory. The tech-heavy Nasdaq was able to finish higher by 3.48 points or 0.2% at 1,756.03, while the Dow fell by 36.65 points or 0.5% to 8,146.52 and the S&P 500 dipped by 3.55 points or 0.4% to 879.13.
Major European markets also finished on the downside, with the German DAX Index and the French CAC 40 Index closing down by 1.2% and 1.4% respectively. The U.K.'s FTSE 100 Index also fell, posting a loss of 0.8% for the session.
Crude oil dropped below US$60 per barrel after the latest International Energy Agency report backed lingering demand concerns. Crude capped its worst week since early January, falling more than 10%. On Friday, light sweet crude for August delivery touched as low as US$58.72 in early trading before finishing at US$59.89 a barrel, down 52 cents from Thursday's close.
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