The major markets across the Asia-pacific region are trading lower on Monday morning, taking cues from Wall Street, where the markets ended in negative territory on Friday, as investors resorted to profit taking following recent rally. Commodity prices declined on concerns that the plan for revival of the financial sector may get delayed, rekindling worries about the recession in the global economy.
Market participants keenly await the outcome of the G-20 meeting where the recent initiatives proposed by the US administration to unclog the credit markets by helping banks sell toxic assets, and the reactions to the same from the European counterparts will decide the future course of action for the global economy. Fundamentally, the economic indicators are still very weak and the signs of recovery are not encouraging.
On Friday, the Dow closed down 148.38 points or 1.9% at 7,776.18, the Nasdaq closed down 41.80 points or 2.6% percent at 1,545.20 and the S&P 500 closed down 16.92 points or 2% at 816.
In Asian trading, crude oil is currently down $0.93 at $51.45 a barrel, in electronic trading. Light sweet crude for May delivery closed at $52.34 per barrel on the New York Mercantile Exchange on Friday, down $1.96 a barrel.
In early morning trading, the benchmark Nikkei 225 Index is losing 151.91 points or 1.78% to 8,475 and the broader Topix Index of all First Section Issues is falling 15.91 points to 809.
On the economic front on Monday, industrial output in Japan plummeted by 9.4% in February compared to the previous month, the Ministry of Economy, Trade and Industry said. That was slightly worse than forecasts that called for a decline of 9.0% following the 10.2% decline in January. On an annual basis, industrial output dropped 38.4% compared to forecasts of a 38.1% decline after the 31.0% retreat in the previous month.
Real estate stocks are trading lower, after condominium developer Azel Corp. said Monday that it has decided to file for bankruptcy protection, with liabilities totaling 44.2 billion yen. The company has been severely hit by delays in payments of proceeds from sales of its fixed assets as well as the increasing reluctance to lend among financial institutions.
Other real estate stocks are also trading lower following the news. Mitsui Fudosan is losing 4.74% and Mitsubishi Estate Co. is losing 5.22%.
Banking stocks are trading mostly lower. Mitsubishi UFJ is down 4.93%, Mizuho Financial is falling 6.02% and Sumitomo Mitsui is losing 4.43%. Resona Holdings is down 1.90%. Brokerage Nomura Holdings is declining 3.63%.
Exporters are also trading lower. Canon is losing 2.98%, Sony is down 4.27%, and Sharp is falling 2.76%. Among automakers, Toyota is decreasing 1.23% and Honda is losing 3.04%.
Hitachi is losing 2.39%. The company stated that it will close a Czech plasma television manufacturing plant due to falling prices and demand in the economic slowdown.
Sanyo Electric Co. intends to book 45 billion yen in restructuring charges for its chipmaking operations in the year ending March 31, 2009, in a move that will make the company more financially viable before it becomes a subsidiary of Panasonic Corp. in fiscal 2009. The company's stock is up 0.68%.
Toshiba Corp is falling 3.15%. The company reportedly plans to take a 100% stake in its struggling liquid crystal display joint venture with Panasonic Corp.
Oil-related stocks are also trading weaker. Inpex is down 1.55%, Nippon Oil is losing 5.61% and Showa Shell is falling 2.66%. Among trading houses, house Mitsubishi Corp. is down 2.09%, Sumitomo Corp. is losing 3.48% and Itochu is declining 3.11%.
In the Australian stock market, the benchmark S&P/ASX 200 index is losing 53 points to 3,619, after closing more than half a percent higher on Friday. The broader All Ordinaries index is down 46.3 points at 3,569.
On the economic front, the Housing Industry Association Economics Group's latest survey shows that total new-home sales in the month of February increased 3.9% on month.
Among banking stocks, Commonwealth Bank of Australia is down 1.34%, ANZ Banking Group is losing 1.93%, and National Australia Bank is dropping 2.13% and investment bank Macquarie Group is falling 1.41%. On the other hand, Westpac is advancing modestly.
Commonwealth Bank of Australia said its wholly owned bank subsidiary Bankwest will cut 400 jobs from its workforce due to the economic downturn.
In the resources sector, index leader BHP Billiton is losing 3.23%, while Rio Tinto is gaining 1.67%. Gold miners were mixed, after gold closed lower on Friday. Lihir Gold is losing 1.55%, and Newcrest Mining is dropping 3.40%, while Sino Gold is edging up 0.38%.
Among energy stocks, Oil Search is losing 2.33%, Woodside is falling 2.76% and Santos is dropping 3.26%.
In the retail sector, David Jones is unchanged, while Woolworths is losing 0.78%, and Coles' owner Wesfarmers is falling 1.81%.
The benchmark KOSPI Index in South Korea opened Monday's session at 1,240, compared to its previous of 1,238, but slipped into negative territory and is currently trading at 1,217, down 20.68 points, or 1.67%.
The Central Bank of Korea revealed that the current account balance for February 2009 swung to a surplus of US$3.68 billion from a revised deficit of US$1.64 billion in January 2009. The Bank attributed sharp drop in imports during the month as the primary reason for the surplus and expects to report a record surplus for March 2009 as well.
At the same time, officials in the Ministry of Strategy & Finance revealed that the national debt in the country is expected to increase to as much as 19% this year, as the Government, in an effort to bolster the economy through extra-budget measures, is planning to issue bonds to fund the extra-budget amount. The total national debt, which was at 308.3 trillion won in last year, is projected to increase to 366.9 trillion Won, or US$269.9 billion, during the current year, the officials noted.
Financials are trading weak. KB Financial Group, the holding firm of Kookmin Bank, is losing 3.59%, Shinhan Financial is down 4.12% and Woori Finance is falling 0.55%.
Shipbuilders are also trading weak, on profit taking. Hyundai Heavy Industries is down 2.86%, Daewoo Ship building is losing 0.55%, and Samsung Heavy Industries is declining 1.86%.
Oil related stocks are trading weaker. S-Oil is down 1.36% and SK Holdings is losing 1.68%.
However, Hynix Semiconductor is advancing 3.75% and LG Electronis is edging up 0.11%. However, LG Display is trading unchanged from previous close. Market heavyweight Samsung Electronics is adding 0.17%.
Among the automakers, Hyundai Motor is up 0.18%, and Kia Motor is trading unchanged. However, Ssangyang Motor is losing more than 7%.
The benchmark Hang Seng Index in Hong Kong opened Monday's session at 13,893, sharply lower than its previous close of 14,119, and is presently trading at 13,816, down 2.13% or 301.23 points. Resource and financial stocks are the major losers in early trading. Profit taking is also being witnessed in the markets after a strong rally in the past few trading sessions.
Among resource stocks, Aluminum Corporation of China, or Chalco, is down 9.85%, CNOOC is falling 3.72%, and Petrochina is losing 3.01%. Chalco reported a sharp decline of 99.2% in profit attributable to equity shareholders for the year 2008. Revenue for the year declined 9.94%.
Financial stocks are the major losers in early trading. ICBC bank is losing 3.82%, Bank of China is declining 1.82% and Bank of Hong Kong is down 2.26%. HSBC Holdings is falling 1.26%, Hang Seng Bank is decreasing 1.32%, Bank of East Asia is moving down 2.19%, CCB is declining 3.42% and Bank of Communications is falling 2.27%.
Insurance stocks are also trading weaker. Ping An is down 2.24% and China Life is losing 2.29%.
China-related stocks are declining. China Mercantile Holdings is down 5.31%, Sinopec Corp. is losing 0.40%, China Overseas is declining 1.13%, and China Resources is falling 1.48%.
Telecom stocks are also moving to the downside. Hutchison Whimpoa is down 3.23%, China Mobile is losing 0.57% and Tencent Holdings is edging down 0.17%.
Among the other major markets in the region, China's Shanghai Composite Index is edging down 0.17% or 3.17 points to 2,371, Taiwan's Weighed Index is down 2.08% or 111.86 points at 5,279, Singapore's Strait Times Index is falling 33.81 points, or 1.94% at 1,712, and Indonesia's Jakarta Composite Index is declining 19.17 points, or 1.31% at 1,444.
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