RTTNews - The stock market in Japan ended in negative territory on Thursday, dragged down by commodity shares as investors preferred to lock in gains in these stocks amid a weak outlook for recovery. The strengthening of the local currency to below 96 yen level also impacted sentiment.
In the U.S., mixed performance was witnessed Wednesday as traders digested the sweeping proposals of President Obama to revamp the financial sector.
A report released by the Labor Department on consumer prices revealed that the prices edged up 0.1% during May after coming in unchanged in April. However, the increase was less than economists' mean expectation of a 0.3% rise in consumer prices. Core consumer prices, which exclude food and energy prices, also edged up 0.1 percent in May following a 0.3 percent increase in April. The modest increase in core prices came in line with economist estimates.
In other news, the Federal Reserve continued its treasury buyback program Wednesday, completing its second quantitative easing move of the week. The New York Federal Reserve purchased $7.0 billion worth of securities with maturity dates ranging from May of 2016 to May of 2019.
President Obama laid out a sweeping agenda for regulatory reform in an effort to prevent a recurrence of the financial meltdown that sunk the U.S. economy into a recession. He proposed granting the Federal Reserve the authority to scrutinize firms that are large enough to pose a systemic risk to the financial markets. He also called for the creation of an oversight council of existing federal regulators to share information, identify gaps in regulation and tackle issues that don't fit neatly into an organizational chart. The President also called for the creation of a new agency dedicated to looking out for the interests of consumers in the financial markets.
While the Nasdaq finished higher by 11.88 points or 0.7% at 1,808, the Dow slid 7.49 points or 0.1% to 8,497 and the S&P 500 dropped by 1.26 points or 0.1% to 911.
The Nikkei 225 Average opened sharply lower at 9,778 compared to its previous close of 9,840 and continued to drift lower in negative territory. The index finally closed at 9,704, representing a loss of 137.13 points or 1.39%. The broader Topix Index of all first section issues ended at 911, down 11.82 points or 1.13%.
Crude oil prices ended flat with a loss of 3 cents at $71.00 a barrel in Asian trading. Light sweet crude oil finished at $71.03, up $0.56, on Wednesday in New York.
Profit-taking in trading houses, steel and oil companies dragged the market lower. Nippon Steel declined 4.20% after Japan Iron and Steel Federation revealed that production declined more than third during May. Kobe Steel slumped 5.29%. Sumitomo Metal Industries plunged 6.69%.
Mitsui & Co fell 3.64%, Mitsubishi Corp. declined 4.22% and Sumitomo Corp. lost 3.07%.
Among oil and coal companies, Nippon Mining Holdings fell 6.79%, Nippon Oil declined 2.79% and Showa Shell edged down 0.30%.
Among exporters, Honda Motor declined 2.62% and Sony Corp declined 3.13% on the stronger local currency.
Mitsubishi Motors managed to buck the trend and gain more than 3% after announcing plans to develop a cheaper electric vehicle.
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