RTTNews - Asian stock markets are trading weak on Monday with a negative close on Wall Street last Friday on the back of some weak economic data prompting investors to indulge in some heavy selling. The disappointing GDP figures from Japan are weighing on the markets as well.
Most of the markets in the region started off on a weak note and have drifted further down in the red on renewed concerns about the pace of economic recovery. With investors choosing to tread a cautious path and looking to cash in on recent strong gains, stocks cutting across various sectors are feeling the heat in the Asian markets today.
Bank and mining stocks are among the prominent losers in the Australian market today. The Australian benchmark index S&P/ASX 200 is currently down with a loss of 46.6 points or 1% at 4,414.4. The broader All Ordinaries index is trading lower by 40.5 points or 0.9% at 4,424.6.
Key bank stocks ANZ Bank, National Australia Bank and Commonwealth Bank of Australia are down by 2.5%-3.2%. Westpac Banking Corporation is trading lower by 1.6% and diversified financial services stock Macquarie Group is down with a loss of 2.3%.
Mining stocks BHP Billiton and Rio Tinto are trading lower by 2.3% and 3.2% respectively. Bluescope Steel is down by nearly 4% on disappointing results. Orica is also trading notably lower today. Shares of Fortescue Metals are up sharply by over 3% following the company securing a pricing deal with Chinese steel mills.
Newcrest Mining Ltd has lifted its annual profit by 84.7% after the price of gold rose and the company cut operating costs. The gold and copper miner's net profit for the year ended June 30 rose to A$248.1 million from A$134.3 million in the previous year. The group lifted its gold production forecast and now expects output for 2009/10 to be between 1.81 million ounces and 1.91 million ounces, up from 1.63 million ounces in 2008/09. The company's stock is currently trading up by 2.3%.
Shares of internet service provider iiNet Ltd. is up by about 5.5% on strong results. The company has posted a 28.8% jump in full-year profit after growing subscriber numbers and says it's well placed for the current financial year. The Perth-based company posted a net profit of A$25.63 million for the year to June 30, up from A$19.90 million in the previous financial year. The company said earnings before interest, taxation, depreciation and amortisation, or EBITDA, rose 36% to A$67 million, while revenue was up 67% to A$418 million in 2008/09.
In the currency market, the Australian dollar opened sharply lower this morning with risk averse investors beginning to doubt the pace of global economic recovery. In early trading this morning, the Aussie was quoting at US$0.8295/97, down from Friday's close of US$0.8426/29. The Australian dollar is currently trading at 0.8235 to the U.S. dollar.
In Tokyo, besides weak data on consumer sentiment in the U.S., disappointing Japanese GDP data for April-June quarter weighed on the market significantly and sent stock prices crashing down sharply today. As stocks cutting across various sectors had a free fall, the Japanese benchmark index Nikkei 225 ended the morning session with a loss of 2.24% at 10,360.25.
Upon resumption of trading, stocks have edged further down and the Nikkei is currently down with a loss of 252.6 points or 2.38% at 10,344.7.
Toyota Motor Corp., Sony Corp. and several other exporters are drifting down sharply today on weak Wall Street cues and disappointing GDP data.
TonenGeneral Sekiyu KK shares encountered selling on Monday morning, after the firm said Friday evening that it expects a group net loss of 5 billion yen in the year ending December, rather than a profit of 9 billion yen as previously forecast. The oil stock fell as much as 24 yen down to 907 yen. The company posted a 79.2 billion yen profit in fiscal 2008, but its bottom line is now under pressure amid rising crude oil prices.
Healthcare stock Daiwabo Holdings rose sharply this morning, as renewed fears over the swine influenza raised expectations that the antiviral mask maker will see increased sales.
Taiko Pharmaceutical Co., a seller of infection-control products, opened the day bid-only before rising sharply. Chugai Pharmaceutical Co., which sells Tamiflu, and Daiichi Sankyo Co., a firm which is developing a new anti-flu agent, are also trading notably higher.
In the currency market, the U.S. dollar traded in the upper 94 yen zone earlier this morning, down slightly from its levels Friday in New York. The dollar fetched 94.70-75 yen against Friday's close of 95.19-22 yen in Tokyo. The yen is currently trading at 94.57 against the U.S. dollar.
The Korean market is also trading sharply lower today amid renewed concerns over the pace of global economic recovery. Bank, energy, steel and automobile stocks have declined sharply. Stocks from other sectors are not faring any significantly better either.
The Korean benchmark index KOSPI, which showed some signs of a recovery after a weak start and a subsequent fall to lower levels, is currently down with a sharp loss of 22.9 points or 1.44% at 1,568.5.
Korea Exchange Bank is down by over 3%, KB Financial is trading lower by nearly 3% and Woori Finance is declining by about 2%. Shinhan Financial, faring slightly better, is down by 1.2%.
Oil stocks SK Holdings and S-Oil are down with notable losses. Among steel stocks, Hyundai Steel and POSCO have lost over 1.5% from their previous closing prices.
Technology stocks are trading mixed. Airliners Korea Airlines and Asiana Airlines are trading lower by 5% and 2% respectively. Telecom and shipbuilding stocks are also seen exhibiting some weakness.
Among other markets in the Asia-Pacific region, Hong Kong and Shanghai are trading sharply lower with their key indices Hang Seng and Shanghai Composite Average declining by 2.8% and 2.5% respectively. The benchmark indices of New Zealand, Singapore and Taiwan are down by 1.3%-1.75%, while the Indonesian index Jakarta Composite is down by a modest 0.4%.
On Wall Street, hurt by disappointing economic data, stocks finished notably lower on Friday despite a late pullback. The decline in equities came following the release of Reuters and the University of Michigan's preliminary report on consumer sentiment for the month of August, which showed that the consumer sentiment index unexpectedly decreased compared to the previous month.
Coupled with disappointing retail sales figures released earlier in the week, the data indicated that the American consumer is still struggling, prompting the pullback by stocks. The Labor Department said its consumer price index was unchanged in July after increasing by an unrevised 0.7 percent in June. The lack of growth in consumer prices came in line with the expectations of economists.
The Dow closed down by 76.79 points or 0.8% at 9,321.40, the Nasdaq declined by 23.83 points or 1.2% to 1,985.52 and the S&P 500 slipped by 8.64 points or 0.9% to 1004.09.
Major European markets closed notably lower, with the French CAC 40 index and the U.K.'s FTSE 100 index falling by 0.8% and 0.9% respectively, while the German DAX index posted a loss of 1.7%.
Crude oil plunged on Friday amid energy demand concerns after a disappointing consumer sentiment report in the U.S. The drop took oil to its lowest closing level of the month. Light sweet crude oil for September delivery declined to US$67.51 per barrel, down US$3.01 on the session. Prices touched a low of US$67.12 per barrel during the day.
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