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Asian Markets Trade Weak

4/3/2012 11:24 PM ET

Asian stock markets are mostly trading notably lower on Wednesday with investors tracking cues from Wall Street where stocks drifted lower overnight after the minutes of the U.S. Federal Reserve's monetary meeting indicated the members' unwillingness to initiate another round of quantitative easing.

In the Australian market, energy, mining and industrial stocks are trading weak, while healthcare, telecommunications and information technology stocks are edging higher. Financial and consumer discretionary stocks are trading mixed.

The benchmark S&P/ASX 200 index, which declined to 4,316.4 in early trades, is currently down 9 points or 0.2 percent at 4,328. The broader All Ordinaries index is down 12.4 points or 0.3 percent at 4,412, off the day's low of 4,402.4.

Top miners BHP Billiton and Rio Tinto are down 1.6 percent and 1.2 percent, respectively. Newcrest Mining and Fortescue Metals are also trading notably lower.

David Jones is trading lower by nearly 5 percent. Perseus Mining, Boart Longyear and Paladin Energy are down 3 to 3.5 percent.

Downer EDI, Panaust, Campbell Brothers, Qantas Airways and Asciano are trading lower by 2 to 2.8 percent. Seek, Beach Energy, Aquarius Platinum and Metcash are also trading sharply lower.

Transfield Services plunged 15 per cent in early trade after it cut its full-year profit forecast by about a fifth. The company said it now expects net profit for 2011-2012 would be A$105 million, before amortization. In February, the company had forecast full-year net profit of at the lower end of the A$130 million to A$135 million range.

QBE Insurance Group shares are up more than 3 percent. The insurer expects its premiums to rise by more than seven percent in 2012 after an unprecedented number of natural disasters. QBE has described 2011 as one of the worst years for catastrophic events, contributing to a 45 percent fall in its net profit for the year to A$683.79 million.

Resmed, Primary Healthcare and Ramsay Healthcare are the other prominent gainers among front line stocks.

On the economic front, Australia's services sector remained in contraction in March, but the level of activity improved slightly from February, according to data released Wednesday. The Australian Industry Group-Commonwealth Bank's Performance of Services Index reading for March was 47.0, an increase of 0.3 from the February reading of 46.7.

"The further slowing of the services sector in March and the associated fall in selling prices, employment and new orders reinforces the picture of a national economy in which large sectors have no or only very little momentum," said AIG Chief Executive Innes Wilcox.

According to data released by the Australian Bureau of Statistics, Australia's trade deficit declined in February, falling to A$480 million from A$971 million in January. Economists had expected the balance to be in a surplus of A$1.1 billion. Exports fell 2 percent month-on-month in February, while imports were 4 percent lower.

The Japanese stock market declined fairly sharply with investors indulging in some heavy selling on weak overseas lead.

Steel, non-ferrous metals, retail, real estate and insurance stocks were mostly down in negative territory when the morning session ended. Bank, automobile and electric power stocks traded mixed.

The benchmark Nikkei 225 index tumbled to a one-month low and was down 139.6 points or 1.4 percent at 9,910.8 at the end of the morning session.

Among the prominent losers, Oki Electric lost nearly 5 percent. Fast Retailing was down 4.5 percent despite the company reporting a strong surge in sales for the month of March.

Japan Steel, Furukawa, Sumco Corp, Sharp Corp, Nippon Kayaku and JGC Corp are down 3 to 4 percent.

NGK Insulators, Astellas Pharma, IHI Corp, Sumitomo Metal Mining, Sony Financial Holdings, Advantest, Mitsubishi Electric Corp, Mitsui Chemicals, Pacific Metals, Toho Zinc and Mitsubishi Materials were also trading notably lower at the break.

Asahi Group Holdings, Japan Tobacco, Nitto Boseki, Credit Saison, Olympus Corp, Konami Corp, Shinsei Bank, Suzuki Motor, Mazda Motor, Aozora Bank, JX Holdings and Chugai Pharmaceuticals are trading in positive territory gained significant ground early on in the session, but pared most of their gains subsequently on selling pressure.

Seven & I Holdings shares rose to a new high for the year amid expectations of a surge in earnings.

In the currency market, the U.S. dollar traded in the upper 82 yen range in early deals in Tokyo. The yen is currently trading at 82.68 to the U.S. dollar.

Among other markets in the Asia-Pacific region, Indonesia, Singapore and South Korea are trading notably lower, with their benchmark indices losing bewteen 0.5 and 1 percent.

The Malaysian market is trading marginally down, while New Zealand is up marginally. Markets in China, Hong Kong and Taiwan are closed for holidays.

On Wall Street, stocks ended mostly lower on Tuesday with traders reacting to the minutes of the Federal Reserve's latest monetary policy meeting that indicated that the members were less willing to initiate another round of quantitative easing amid signs of improvement of the U.S. economy.

The Dow ended down 64.9 points or 0.5 percent at 13,199.5, the Nasdaq edged down 6.1 points or 0.2 percent to 3,113.6 and the S&P 500 slid 5.7 points or 0.4 percent to 1,413.3.

Major European markets too closed weak on Tuesday. While the U.K.'s FTSE 100 index declined by 0.6 percent, the German DAX index and the French CAC 40 index tumbled by 1.1 percent and 1.6 percent, respectively.

U.S. crude oil futures closed lower on Tuesday, on continued worries over demand growth while the dollar pushed ahead following the release of Federal Reserve policy meeting minutes. Crude for May delivery dropped $1.22 or 1.2 percent to close at $104.01 a barrel on the New York Mercantile Exchange.

by RTT Staff Writer

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