RTTNews - Asian market are mostly trading weak on Wednesday with the overnight negative close on Wall Street and caution ahead of a slew of economic reports from across the globe and the outcome of the U.S. Federal Open Market Committee meeting weighing in significantly and prompting investors to go in for some profit taking.
The Australian market, which rebounded into positive territory after a weak start, is currently trading flat. The benchmark index S&P/ASX 200 is currently down by 2.2 points or 0.1% at 4,330. Earlier, the index had rallied to 4,348 from a low of 4,295. The All Ordinaries index is down with a loss of 1.8 points or 0.1% at 4,333.
Bank stocks are faring reasonably well. Miners BHP Billiton and Rio Tinto opened on a weak note but pared most of the losses in subsequent trades.
Fortescue Metals Group Ltd says it is in talks about financing its iron ore expansion plans. But the miner has declined to comment on reports it is in advanced talks with China Investment Corp (CIC) to sell convertible bonds worth about $US1 billion ($A1.2 billion). The stock is currently trading up 3.5% over its previous close.
Aevum Ltd has reported an annual net loss of A$12.2 million but the company has refrained from providing earnings guidance for 2009/10 because of abnormal market conditions. The firm had posted a net profit of A$28.55 million for the year 2007/08. The stock is trading 0.7% down from its previous close.
Stockland Group has posted a massive annual loss after the global economic downturn forced it to downgrade the value of its investment properties and book impairment charges. The firm's net loss for the year ended June 30 was A$1.803 billion, compared to a profit of A$704.6 million in the previous year. The full year underlying result before re-evaluations was a profit of A$631.4 million, a decline of 6.3%. The stock is currently trading nearly 3% down.
Global share registry operator Computershare Ltd says it is likely to maintain its management earnings level this financial year after posting a 9.3% fall in 2008/09 net profit. Computershare announced a net profit of US$255.733 million for the year to June 30, 2009, on a 4.5% drop in revenue to US$1.5 billion. The stock is currently trading lower by around 0.5%.
The economic slowdown and rising unemployment continues to ease pressures on company wage bills, a report from the Australian Bureau of Statistics shows. According to the report released today, the bureau's wage price index grew at 0.8% for the second straight quarter in the three months to June, as expected by economists. The index saw the annual growth rate ease to 3.8% in the year to June from 4.2% as of the previous quarter, its slowest pace in at least two years.
In the currency market, the Australian dollar opened at a near-two week low today as investors, treading a cautious path ahead of a US central bank meeting, sold growth assets such as equities and commodity-driven currencies. In early trading this morning, the Aussie was quoting at US$0.8291/94, down 0.97% from Tuesday's close of US$0.8372/75. The Australian dollar is currently trading at 0.8247 to the U.S. dollar.
In Tokyo, the negative close on Wall Street overnight and a stronger yen triggered heavy selling in stocks across various sectors. The benchmark index Nikkei was down by 127.57 points or 1.21% at 10,458 at the end of the morning session.
Chemicals, pharmaceuticals, steel and non-ferrous metals stocks traded lower. Machinery and electric machinery stocks were also seen struggling this morning.
Most of the key stocks in the automobile space drifted down into the red with Honda Motor, Toyota Motor, Hino Motors, Suzuki Motor and Nissan Motor losing between 0.7% - 2%.
In the banking space, Sumitomo Mitsui Financial, Resona Holdings, Sumitomo Trust and Banking, Mitsubishi UFJ Financial and Chuo Mitsui Trust Holdings declined.
Electrical machinery stock NEC fell sharply on reports that the firm is considering raising up to 200 billion yen by offering common shares and subordinated bonds for domestic and overseas investors as early as September.
Shares of Sapporo Holdings Ltd. moved higher and gained nearly 5% in early trading today on reports that the brewery will likely form a capital alliance with major beverage maker Pokka Corp. According to the report, Sapporo Holdings will likely acquire about 20% of Pokka's outstanding shares to create a three-way tie-up with Meiji Holdings Co., which has a major stake in Pokka. However, the stock pared gains subsequently and was up just about 1.5% at the end of the morning session. The Meji Holdings stock slipped by over 2%.
In the currency market, the U.S. dollar traded just below the 96-yen line early Wednesday in Tokyo, little changed from its levels in New York overnight. In early trading, the dollar fetched 95.90-95 yen against Tuesday's close of 95.95-96.05 yen in New York and 96.86-87 yen in Tokyo. The yen is currently trading at 95.58 to the U.S. dollar.
In the South Korean market, bank, steel and oil stocks are trading weak, while select technology and automobile stocks are trading higher. Shipbuilding, telecom and airlines stocks are trading mixed.
The Korean benchmark index KOSPI is currently trading at 1,557, down 22.5 points or 1.4% from its previous close.
Among other markets in the region, Hong Kong and Shanghai are down sharply in the red. While the Hang Seng index of the Hong Kong market is down by 2.3% or 490 points, the Shanghai Composite index of the Shanghai stock market is trading lower by 2.56% or 84 points now.
Indonesia and Singapore are trading notably lower, while Taiwan is down modestly. The New Zealand market has bucked the trend and is trading modestly higher. Stock markets across the region had largely turned in strong performances on Tuesday.
On Wall Street, stocks drifted lower on Tuesday with traders going in for profit taking ahead of key economic data due out in the second half of the week. On the economic front, traders largely shrugged off the Labor Department's report showing a much bigger than expected increase in productivity in the second quarter.
The Dow closed down by 96.50 points or 1% at 9,242, the Nasdaq slipped by 22.51 points or 1.1% to 1,970 and the S&P 500 drifted down by 12.75 points or 1.3% to 994.
Major European markets closed notably lower, with the French CAC 40 index and the U.K.'s FTSE 100 index finishing down by 1.4% and 1.1% respectively, while the German DAX index closed 2.4% down.
Crude oil prices finished below US$70 per barrel on Tuesday as traders braced for what is expected to be a bearish inventory report. Lower stocks also raised concerns for energy demand. Light sweet crude for September delivery settled at US$69.45, down US$1.15 on the session.
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