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Asian Markets Trade Weak On Economic Concerns

Asian stock markets are trading weak on Friday following cues from Wall Street where stocks drifted lower overnight amid some disappointing economic data. Concerns about the financial situation in Europe and caution ahead of key earnings results are also contributing to the weakness in the region.

After a flat start and a subsequent marginal rise, the Australian stock market is trading slightly lower. Energy, healthcare and information technology stocks are finding some support, while mining, industrial and financial stocks are mostly flat amid lackluster trades.

The benchmark S&P/ASX 200 index is down 8.4 points or 0.2 percent at 4,354.3. The broader All Ordinaries index is trading at 4,432.3, down 9 points or 0.2 percent from its previous close.

Shares of building materials producer Boral are down 3.2 percent following the company cutting its full-year profit guidance by A$22 million due to the impact of heavy rain and weak housing activity on its operations.

AMP, Sims Metal Management, James Hardie Industries and News Corporation are down 1.5 to 2 percent.

CSR, David Jones, Dexus Property Group, Spark Infrastructure Group, Centro Retail Australia, Lynas Corporation, Insurance Australia Group, Harvey Norman Holdings and Alumina are trading lower by 1.2 to 1.4 percent.

Woolworths is down 0.8 percent. The company lifted its third-quarter sales by 3.8 percent to A$14.07 billion, but says uncertainty caused by the carbon tax and interest rates makes it cautious about the coming months.

Oil Search is gaining more than 5 percent. Perseus Mining is up 2.7 percent and Beach Energy is gaining about 2.2 percent. Lend Lease Group, Tabcorp Holdings and Myer Holdings are also trading notably higher.

On the economic front, Australian import and export prices decreased in the March quarter of 2012, data from the Australian Bureau of Statistics showed Friday.

The import price index fell 1.2 percent quarter-on-quarter in three months to March, compared to economists' forecast for a 0.1 percent decrease. In the December quarter, the index recorded a 2.5 percent gain.

On an annual basis, import prices gained 2.1 percent. In the fourth quarter, import prices were up 4.7 percent annually. At the same time, the export price index declined 7.0 percent quarter-on-quarter compared to economists' expectation of a 3.0 percent fall.

Annually, the export price index rose 1.0 percent, slower than the 14.0 percent increase in the previous three-month period.

In the currency market, the Australian dollar opened weak. Around noon, the Aussie was quoting at 1.0315 to the U.S. dollar, down nearly 0.5 percent from Thursday's close of 1.0363.

The Japanese stock market opened weak and drifted down further as the session progressed with investors tracking cues from Wall Street.

Shares from chemicals, non-ferrous metals, automobile, manufacturing and securities sections were among the notable losers. Electric power, financial and insurance stocks found modest support.

The benchmark Nikkei 225 index was down 40.2 points or 0.4 percent at 9,548.1 at the end of the morning session.

JFE Holdings Inc. shares lost over 3.5 percent on reports the company may increase borrowing to invest in building mills. Mitsui Engineering & Shipbuilding drifted down nearly 4 percent and Toshiba Corp lost over 3 percent.

Fujitsu, Sumitomo Metal Industries, Resona Holdings, Mitsubishi Materials and Fujikura were down 2 to 2.8 percent.

Nippon Steel Corp, Suzuki Motor, Toyota Motor, Hino Motors, Mitsubishi Motors, Nomura Holdings, Nissan Chemicals, Sumitomo Mitsui Trust Holdings, Showa Denko KK, Japan Steel Works, Mitsubishi UFJ Financial and Advantest also posted notable losses.

Among the gainers in the Nikkei index, Oki Electric Industry, Kawasaki Kisen, Sumco Corp and Mitsui OSK Lines moved up by 3 to 4 percent.

Marubeni Corp, Takara Holdings, Nippon Yusen KK, Mitsui Chemicals, Sumitomo Corp and Nippon Sheet Glass also traded notably higher.

According to data released by Bank of Japan, corporate demand for loans rose for the first time in two quarters in the January-March period, helped by robust growth among domestically focused non-manufacturers.

The diffusion index of demand for loans - the percentage of financial institutions reporting increased loan demand minus those reporting reduced demand - stood at plus 6, up from the minus 2 reading in the October-December quarter of 2011.

In the currency market, the U.S. dollar traded in the upper 81 yen range in early deals in Tokyo. The yen is currently trading at 81.60 to the U.S. dollar.

Among other markets in the Asia-Pacific region, Hong Kong, New Zealand, South Korea and Taiwan are trading notably lower. Indonesia, Malaysia and Singapore are down marginally, while Shanghai is bucking the trend and trading slightly up. Markets across the region turned in a mixed performance on Thursday.

On Wall Street, stocks drifted lower on Thursday, weighed by a batch of largely disappointing U.S. economic data. The major averages climbed off their worst levels going into the close but remained firmly negative.

The Dow dropped 68.6 points or 0.5 percent to 12,964.1, the Nasdaq ended down 23.9 points or 0.8 percent at 3,007.6 and the S&P 500 slid 8.2 points or 0.6 percent to 1,376.9.

Major European markets too ended on a weak note on Thursday. The U.K.'s FTSE 100 index closed just below the unchanged line, while the German DAX index and the French CAC 40 index lost 0.9 percent and 2.1 percent, respectively.

U.S. crude oil futures settled lower on Thursday, after some soft economic data from the U.S. once again set off worries about the economy. Crude for May delivery dropped $0.40 or 0.4 percent to close at $102.27 a barrel on the New York Mercantile Exchange.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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