Most Asian markets retreated, dragged down by the negative lead from Wall Street overnight in the wake of weak economic data. The Malaysian market bucked the trend, with the KLSE Composite Index ending modestly higher, while the Chinese market remained closed for a public holiday. Fragile global macroeconomic fundamentals are weighing on the markets, as the debt crisis in Europe continues to rage and recent global economic data vouch for the softening of economic conditions in the U.S. and China, the top two economies of the world.
After the U.S. markets closed yesterday, Moody's downgraded 15 global financial institutions, citing their significant exposure to the volatility and risk of outsized losses inherent to capital market activities.
In the eurozone finance ministers' meeting in Luxembourg, it was decided that the EFSF would disperse the remaining 1 billion euros of the withheld funds from the first installment, before the end of the month. The Troika is expected to return to Greece next Monday to discuss the implementation of the second Greek bailout program. The 2-day meeting ending today is considered the forerunner of next week's EU leaders' summit in Brussels.
Meanwhile, the leaders of Germany, France and Italy and Spain are set to meet in Rome later today to discuss a fiscal and banking union in the eurozone. Spain may take this an opportunity to see a formal bailout for its banking system.
Japan's Nikkei 225 average languished below the unchanged line for much of the session, although the index pared back much of its losses in late trading. The index closed down 25.72 points or 0.29 percent at 8,798.
A majority of stocks, with the exception of pharma, financial, steel, construction and some export stocks, declined in the session. The negativity triggered by macroeconomic concerns was mitigated by the weakness of the yen, which supported export related stocks.
Chiyoda fell 3.25 percent and oil refiner slipped 2.48 percent. JGC Corp., Japan Tobacco and Suzuki Motors were among the other notable decliners.
Sony rallied over 5 percent after it emerged that it is now the frontrunner for picking up a stake in beleaguered Olympus. Olympus ended 2.22 percent higher. Panasonic, another contender in the fray, also rose close to 1.50 percent. Reports also suggested that Panasonic and Sony may join hands in a TV making venture.
Australia's All Ordinaries slipped sharply in early trading and then began consolidating around the lower levels. The index ended 39,90 points or 0.97 percent lower at 4,094. Energy and material stocks led the declines after resource prices pulled back sharply in the previous session in New York.
Crude oil tumbled to a 9-month low of $78.20 a barrel on the New York Mercantile Exchange on Thursday. Gold also lost sheen in the previous session.
Hong Kong's Hang Seng Index closed at 19,000, down 264.83 points or 1.37 percent. Forty-three of the forty-nine index components closed lower.
India's Sensex was down close to 0.50 percent after the rupee fell to a record low of 56.86 against the dollar amid the firming up of dollar demand from importers and also on increasing capital outflows.
South Korea's Kospi was the worst decliner among the major averages in the region, dropping 2.21 percent. Taiwan's Weighted Average slipped 0.78 percent and New Zealand's NZ 50 Average fell 0.30 percent
U.S. stocks declined sharply on Thursday, with disappointing domestic economic data adding to the negative sentiment generated by the Fed decision in the previous session. The Dow Industrials ended down 250.82 points or 1.96 percent at 12,574 and the S&P 500 Index closed 30.18 points or 2.23 percent lower at 1,326, while the Nasdaq Composite closed at 2,859, down 71.36 points or 2.44 percent.
by RTT Staff Writer
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