RTTNews - The markets across the Asia-Pacific region tumbled on Thursday after dismal U.S. April retail sales and a troubling rise in home foreclosures made investors skeptical about the possibility of a quick global economic recovery. Besides, a fall in commodity prices and lower U.S. index futures, which pointed to more losses on Wall Street Thursday, dampened investor sentiment.
Crude oil price settled lower at $58.02 a barrel, down 83 cents in New York trading on Wednesday, as worse than expected U.S. retail sales data and gloom on Wall Street more than outweighed the impact of a government report showing a surprise drop in U.S. crude and gasoline stockpiles.
A report from the U.S. Energy Information Administration showed that U.S. crude inventories fell by 4.7 million barrels; defying expectations for a 10th straight weekly build. In late Asian trading on Thursday, crude oil fell further below $57 a barrel after dismal economic data dampened investor optimism for economic recovery and energy demand.
Stocks on Wall Street saw substantial weakness during trading on Wednesday, as disappointing retail sales offset some of the recent optimism about the outlook for the economy. The major averages closed firmly negative, with the Nasdaq ending the session at its worst level of the day. The Dow Jones Industrial Average fell 2.18%, the Nasdaq Composite tumbled 3.01% and the S&P 500 index moved down 2.69%.
A report from the Commerce Department showed that retail sales unexpectedly fell 0.4 percent in April following a revised 1.3 percent decrease in March. Economists had expected sales to come in unchanged compared to the 1.2 percent decrease originally reported for the previous month. A separate report from the Commerce Department showed a continued decrease in business inventories in the month of March. The report showed that business inventories fell 1.0 percent in March following a revised 1.4 percent decrease in February.
Economic data is likely to remain in focus on Thursday. Traders are likely to keep a close eye on the Labor Department's weekly jobless claims report along with its report on wholesale price inflation for the month of April.
The Japanese market closed sharply lower after gloomy economic data in the U.S. dampened investor sentiment and the strengthening of the Japanese yen clouded the earnings of Japanese exporters. The benchmark Nikkei 225 index fell 247 points or 2.64% to 9,094, the lowest closing in about two weeks. Likewise, the broader Topix index of all First Section issues on the Tokyo Stock Exchange moved down 26 points or 2.94% to 863, the lowest closing since May 1.
Financials came under significant selling pressure. Mitsubishi UFJ Financial Group slumped 5.92%, Sumitomo Mitsui Financial Group fell 3.09%, Mizuho Financial Group plummeted 5.69% and Resona Holdings lost 2.25%.
Insurer Mitsui Sumitomo Insurance fell 3.89% and Sompo Japan Insurance tumbled 4.28%. Among brokerages, Nomura Holdings tumbled 4.87%, Daiwa Securities Group plummeted 6.81% and T&D Holdings lost 6.27%.
Automakers and high-technology stocks closed weaker. Honda Motor fell 3.54%, Suzuki slipped 1.63%, Toyota tumbled 4.10%, Nissan slumped nearly 6% and Mazda Motor plummeted 6.64%.
In the technology sector, Canon fell 4.83%, Advantest shed 3.42%, Tokyo Electron lost 2.16%, Kyocera slipped 1.32%, Fanuc fell 3.81%, Fujitsu shed 2.96% and Sony slumped 5.05%.
Oil explorer Inpex tumbled 6.06% on forecasting a 61% drop in its net income this fiscal year. Telecom giant Nippon Telegraph & Telephone gained 1.80% after it announced a
a net profit of 538.7 billion yen (5.6 billion dollars) in the year to March despite recession.
Drugmaker Astellas Pharma slipped 0.59% on forecasting a second straight year of profit declines this year due to the stronger yen. Camera and precision equipment maker Nikon Corp plunged 8.38% after its group net profit fell 63% to 28.06 billion yen in the fiscal year 2008. Panasonic tumbled 4.40% on reports that it could report a net loss of more than $1.1 billion this financial year.
The South Korean market tumbled, dragged down by institutional selling almost across the board. The benchmark KOSPI closed at 1,381, down 34 points or 2.37%, the steepest fall since April 28. Volume was significant at 694.05 million shares worth 7.47 trillion won (US$5.9 billion) and losers outnumbered gainers by 552 to 272.
Aviation stock Asiana Air Line tumbled 4.62% and Korean Air Line fell 3.31% after the dollar rebounded sharply against the won. Asiana said on Thursday that it swung to a net loss of KRW262.3 billion in the first quarter from a net profit of KRW3.3 billion a year earlier.
Steel maker POSCO tumbled 5.06% on announcing a 20% cut in its domestic steel prices. Technology stock Hynix Semiconductor closed down 0.72%, LG Display LCD fell 4.05% and market heavyweight Samsung Electronics moved down 1.43%, but LG Electronics rose 0.93%.
Shipbuilder Hyundai Heavy Industries fell 4.52% on concerns about depletion in its cash reserves after the company submitted a proposal to buy at least 50% of trading company Hyundai Corp from its creditors. Daewoo Shipbuilding lost 3.11% and Samsung Heavy Industries shed 3.97%.
Ssangyong Motor fell 4.74% after it posted a net loss of 265 billion won in the first quarter of this year compared to 34 billion won loss in the same period a year earlier.
Kia Motors slipped 1.22% and Hyundai Motor ended down 1.69%
Banker Woori Finance tumbled 4.59%, Korea Exchange Bank shed 2.36% and KB Financial, the holding firm of Kookmin Bank closed down 4.82%. Among other notable stocks, oil stock S-Oil fell 2.92%, energy stock KEPCO tumbled 5.42% and telecom stock KT closed down 2.74%.
The Australian market tumbled on renewed concerns about the U.S. economy. The benchmark S&P/ASX200 index closed at 3,723, down 133 points or 3.44% and the broader All Ordinaries index also fell 132 points or 3.4% to 3,711.
Big-miner Rio Tinto fell plunged 11.72% on speculation that the company may alter or scrap its planned $19.5 billon deal with China's Chinalco in favor of a discounted rights issue. Its rival BHP Billiton slumped 6.19%, Iluka Resources fell 1.81%, Fortescue Metals Group plummeted 10.88% and OZ Minerals slumped 9.49%.
Gold miner Newcrest Mining ended down 2.06%, Lihir Gold fell 2.58% and Newmont closed down 0.7%.
In the banking sector, National Australia Bank fell 2.49%, ANZ lost 2.16%, Commonwealth Bank shed 3.46%, Westpac Banking moved down 1.94% and investment bank Macquarie Group ended down 3.57%.
Fairfax Media tumbled 5.12% after Standard & Poor's downgraded its credit rating. News Corp fell 3.26% and Consolidated Media declined 3%, but Seven Network closed up 0.35%
Construction company Leighton slumped 7.52% on reporting a net profit after tax of $220 million for the nine months ended March, down from $375 million in the corresponding period last year. Macmahon Holdings remained in a trading halt as it plans to raise up to $60 million through a capital raising.
Insurers closed weaker on concerns about decline in superannuation fund inflows as the federal government prepares to clamp down on tax breaks for voluntary contributions.
AMP fell 2.67%, AXA Asia Pacific slumped 6.53%, QBE Insurance lost 3% and Henderson Group tumbled 5.56%.
Oil & gas stocks retreated after crude oil price fell below $58 a barrel in Asian trading. Woodside Petroleum fell 3.73%, Oil Search declined 2.69% and Santos, which came out of a trading halt on Wednesday, slumped 6.84%. Origin Energy fell 3.19%, but power- distribution company AGL Energy rose 0.35%
Among retailers, Woolworths slipped 0.12%, Harvey Norman fell 1.93%, David Jones tumbled 4.70%, JB Hi Fi plummeted 5.66% and Wesfarmers, which owns Coles, moved down 3.71%. Healthcare stock Healthscope gained 2.30%, consumer staples such as Coca-Cola Amatil rose 0.60% and Metcash ended up 0.74% on defensive buying.
On the economic front, housing finance for owner occupation rose 7.3% month-on-month in March to A$15.7 billion, the Australian Bureau of Statistics said Thursday. At the same time, commercial finance grew 20.5% to A$30.49 billion and lease finance was up 1.3% to A$469 million. However, personal finance declined 2.2% to A$6.28 billion in March.
The New Zealand market finished lower in reaction to the sell-off on Wall Street overnight. The benchmark NZX-50 closed at 2,776, down 35 points or 1.26%. Totally, 51.6 million shares worth $140.5 million were traded and decliners outnumbered advancers by 67 to 23.
Among leading blue chips, bellwether Telecom moved down 1.52%, construction company Fletcher Building fell 2.24% and power company Contact Energy closed down nearly 1%. Retailer Pumpkin Patch declined 1.50% and Warehouse Group tumbled 3.60%.
Among other notable decliners, Whiteware manufacturer Fisher & Paykel Appliances slumped 7.69%, resin maker Nuplex fell 2.56%, logistics firm Freightways tumbled 3.91%, NZ Oil & Gas declined 1.96%, Tower shed 3.05%, Pike River Coal lost 2.78% and Steel & Tube ended down 1.67%, while casino operator Sky City closed unchanged.
However, Goodman Property Trust gained 2.50% after it reported a full year net loss of $74.1 million following a 10.3 percent write down in the carrying value of its investment and development assets. Air New Zealand rose 0.93% on reports that its fuel costs will fall by $530 million next financial year because of new hedging levels and significantly lower crude price.
In economic news, manufacturing activity in New Zealand contracted for the twelfth consecutive month in April, but it showed an improvement for the second straight month, an official survey showed Thursday. The report released by Business New Zealand, BNZ, revealed that the Performance of Manufacturing Index or PMI stood at 43.7 in April, up from 41.9 March. The reading was 7.0 points below its level in April last year, but was still at its highest level since September 2008.
Among the other markets in the region, China's Shanghai Composite index closed down 0.90%, Hong Kong's Hang Seng index fell 3.04%, and Singapore's STI Straits Times index lost 2.89% and Taiwan's TWII Weighed index ended down 1.87%. The benchmark for the Indian market, the Sensex was last trading at 11,836, down 184 points or 1.53% from its previous close.
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