Asian Market Commentary
FONT-SIZE Plus   Neg
Share SHARE
mail  E-MAIL

Asian Markets Exhibit Weakness Amid Cautious Trades

4/15/2012 11:26 PM ET

Asian markets are trading weak on Monday with investors indulging in fairly heavy selling, tracking cues from Wall Street where stocks tumbled on Friday amid lingering worries about the global economy. Caution ahead of release of some key first tier data such the retail sales and the New York Federal Reserve's manufacturing survey from the U.S. overnight is also contributing to the subdued trend in the region.

After a fairly sharp setback, the Australian market recovered some lost ground thanks to some strong buying at lower levels in a few front line stocks.

Mining, information technology and consumer discretionary stocks are mostly down with notable losses. Energy, financial and healthcare stocks are off their lows on modest support.

The benchmark S&P/ASX 200 index, which dropped down to 4,288 earlier in the day, is currently trading at 4,300, down 23.3 points or 0.5 percent from its previous close. The broader All Ordinaries index is down 24.2 points or 0.5 percent at 4,380, off the day's low of 4,368.6.

Among bank stocks, Commonwealth Bank of Australia, National Australia Bank and Westpac are down 0.3 to 0.5 percent, while ANZ Bank is up marginally. Bendigo & Adelaide Bank and Bank of Queensland are down 1 percent and 0.3 percent, respectively.

Among top miners, BHP Billiton, Rio Tinto, Fortescue Metals and Newcrest Mining are down 0.7 to 1.3 percent.

In the energy sector, Woodside Petroleum, Oil Search and Origin Energy are down 0.6 to 1 percent while Santos and Caltex Australia are up 0.3 percent and 2 percent, respectively.

Iluka Resources, APA Group, Fairfax Media and Resmed Inc are down 2 to 3 percent.

Sims Metal Management, Aquarius Platinum, Campbell Brothers, Macquarie Group, Oz Minerals, Incitec Pivot, Perseus Mining, Investa Office Fund, PanAust, Ramsay Healthcare and Sonic Healthcare also trading notably lower.

Dexus Property Group has announced that it will be selling 65 properties in the United States for A$746.16 million. The sale price is in line with the book value of the properties, Dexus said. The company will use the proceeds of the sale the 65 factories to buy back up to A$200 million worth of its shares, and pay off some of its debt. The stock is trading 1 percent down.

Linc Energy shares spurted more than 35 percent on reports the company has formed a joint venture to produce gas in China. The company, which is focused on producing underground coal gasification and gas-to-liquids technologies, will will partner with a subsidiary of Hong Kong listed Golden Concord Holdings to commercialise fuel using its UGC to GTC technology in China.

On the economic front, total personal finance commitments declined by 3.8 percent to A$7.187 billion in February, according to the data released by the Australian Bureau of Statistics. The bureau said the seasonally-adjusted commitments were down from A$7.470 billion in January.

Total commercial finance in February fell 8.4 percent to A$29.003 billion, seasonally adjusted, from A$31.656 billion in January. Lease finance was up 4.1 percent to A$498 million, compared with A$479 million in January. Housing finance for owner occupation fell 4 percent to A$13.410 billion, from A$13.974 billion the month before.

The Japanese market drifted lower with investors pressing sales almost across the board, following a weak lead from Wall Street. The yen's surge against the euro too contributed to the weakness in the market.

Banking, automobile, real estate, steel, non-ferrous metals and chemicals stocks were mostly down in negative territory when the morning session ended. Electric power, mining and transport stocks traded mixed.

The benchmark Nikkei 225 index, which declined to 9,483.5, was down 139.3 points or 1.5 percent at 9,498.7 at the break.

Advantest Corp shares were down by around 5 percent. Sumco Corp, JGC Corp, Chiyoda, Taiyo Yuden, Konami Corp and Kawasaki Kisen lost 3 to 4 percent.

Credit Saison, Ricoh, T&D Holdings, Nippon Yusen KK, Trend Micro, Yokogawa Electric, Mitsubishi Corp, Toho Zinc, Sumitomo Chemicals and Softbank were down by over 2 percent.

Among bank stocks, Shinsei Bank, Aozora Bank, SMFG, Mizuho Financial Group and Mitsubishi UFJ Financial are down 2.2 to 2.8 percent. Bank of Yokohama and Chiba Bank also posted notable losses, while Shizuoka Bank traded flat.

In the automobile space, Isuzu Motors, Hino Motor, Mitsubishi Motor, Nissan Motor and Honda Motor lost 1 to 2 percent, while Mazda Motor, Suzuki Motor and Toyota Motor were down 0.6 to 0.8 percent.

Among the gainers in the Nikkei index, Sharp Corp. gained more than 2.5 percent. Nippon Steel surged nearly 2 percent up on reports the company's pretax profit for the January - March quarter saw a sharp jump.

Nippon Steel, Obayashi Corp, Sumitomo Metal Industries, Minebea, Nisshin Steel, Kobe Steel, Oki Electric Industry, JFE Holdings and Nippon Paper Group posted modest gains.

In economic news, Japan Nationwide department store sales for March is the sole noteworthy Main Street data point for the day. Sales fell 0.4 percent year-over-year in February.

In the currency market, the U.S. dollar traded in the upper 80 yen range in early deals in Tokyo. The yen is currently trading at 80.84 to the U.S. dollar. The euro fell to a two-month low against the yen as it tumbled to 105.29.

Among other markets in the Asia-Pacific region, Shanghai, Hong Kong, South Korea and Taiwan are trading notably lower, while Indonesia, Malaysia, New Zealand and Singapore are down marginally. Markets across the region ended higher on Friday.

On Wall Street, stocks moved sharply lower on Friday, giving back some ground after posting strong gains in the two previous sessions. Renewed concerns about corporate earnings and the global economy contributed to the weakness in the markets,

The Dow slid 137 points or 1.1 percent to 12,849.6, the Nasdaq tumbled 44.2 points or 1.5 percent to 3,011.3 and the S&P 500 ended down 17.3 points or 1.3 percent at 1,370.3.

Major European markets too ended sharply lower on Friday. While the U.K.'s FTSE 100 index lost 1 percent, the German DAX index and the French CAC 40 index tumbled by 2.4 percent and 2.5 percent, respectively.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Market Analysis

comments powered by Disqus