RTTNews - Japan's key index, the Nikkei 225 Average shed more than 2.75% and slipped below the 10,000-mark on Tuesday, mirroring Wall Street's losses, on concerns about the pace and magnitude of global recovery. The strengthening of the local currency against the US green back also impacted sentiment.
In the U.S., stocks finished Monday's session substantially weaker as traders did some profit taking following the recent rally, with some disappointing economic data raising concerns that stocks have come too far too fast in light of the near-term economic outlook.
A report released by the New York Federal Reserve revealed that conditions for manufacturers in the region have deteriorated at a faster pace during June compared with May. The New York Fed said its general business conditions index fell to a negative 9.41 in June from a negative 4.55 in May, with a negative reading indicating a deterioration in conditions. Economists had expected the index to edge down to a negative 5.10. Another report released by the National Association of Home Builders revealed that the National Association of Home Builders/Wells Fargo Housing Market Index fell to a reading of 15 in June from a reading of 16 in May. Economists had been expecting the index to edge up to a reading of 17.
The Dow closed down 187.12 points or 2.1% at 8,612, the Nasdaq closed down 42.42 points or 2.3% at 1,816 and the S&P 500 closed down 22.49 points or 2.4% at 924.
The Nikkei 225 Average opened sharply lower below the 10,000-mark at 9,914 compared to its previous close of 10,040, and continued to tread below the unchanged line in negative territory as investors preferred to sell stocks amid concerns about a global recovery and the stronger local currency. The index finally closed at 9,753, representing a loss of 286.79 points, or 2.86%. The broader Topix Index of all first section issues ended at 915, down 32.06 points, or 3.39%.
Crude oil prices ended almost flat at $70.63 a barrel in Asian trading. Light sweet crude oil finished at $70.63, down $1.42, on Monday in New York on concerns about weak demand.
At the conclusion of the two-day meeting, the Bank of Japan retained its uncollateralized overnight call rate at 0.1%., which was in line with expectations. Commenting on the economic assessment, BOJ stated that amid continuing weakness in economic conditions, exports and production are beginning to level out against the backdrop of progress in inventory adjustments.
Across the board selling was witnessed on concerns about the global economic outlook. The stronger yen dragged the exporters and traders down. Lower commodity prices also affected market sentiment.
Trading house Mitsubishi Corp. slipped 5.01% and Sumitomo Corp. fell 4.54%. Electronics firm Sony Corp, declined 3.04%.
Financial stocks ended weaker on the bleak outlook for the global economy. Mitsubishi UFJ lost 4.75%, Mizuho Financial lost 5.00%, Sumitomo Mitsui Financial fell 1.98% and Resona Holdings declined 4.02%. Among brokerages, Nomura Holdings lost 8.82%.
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