Despite a positive lead from Wall Street where stocks ended higher overnight on the back of some encouraging economic data and earnings reports, the mood in Asian stock markets is quite cautious on Wednesday.
Though most of the markets in the region started off on a firm note, some of them retreated as the session progressed with investors choosing to wait for more clear signals to emerge.
In the Australian market, mining and energy stocks are losing ground. Bank stocks opened on a firm note but are currently trading off their highs. Consumer discretionary, healthcare and industrial stocks are trading mixed.
The benchmark S&P/ASX 200 index, which edged up to 4,144.2 in early trades, is currently down 11.6 points or 0.3 percent at 4,129.2. The broader All Ordinaries index is down 12.7 points or 0.3 percent at 4,162.6, after advancing to 4,177.3 in opening trades.
Among miners, Rio Tinto is down 2.8 percent, Newcrest Mining is losing about 2.6 percent and Fortescue Metals is down with a loss of 3 percent, while BHP Billiton is trading lower by 1.6 percent.
BHP Billiton announced that iron ore production is likely to rise five percent to a record 40.89 million tonnes in 2013 after a bumper result for the June quarter.
In the energy sector, Woodside Petroleum is down 1.3 percent, Santos is trading 2.6 percent down, Origin Energy is losing about 2.4 percent and Oil Search is down 0.4 percent, while Caltex Australia is trading flat.
Among bank stocks, Commonwealth Bank of Australia and Westpac are trading higher by over 1 percent, while National Australia Bank and ANZ Bank are up marginally. Bank of Queensland is up 0.7 percent and Bendigo & Adelaide Bank is trading flat.
Perseus Mining is trading lower by over 5 percent. Panaust, Paladin Energy and Alumina are down 3.5 to 4 percent.
Bluescope Steel, Fairfax Media, Atlas Iron, Iluka Resources, Metcash, Amcor, WorleyParsons and Orica are trading lower by 1.5 to 3 percent.
Meanwhile, Sims Metal Management, Brambles and Myer Holdings are trading in positive territory with notable gains.
In economic news, the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future, was at 1.6 per cent in May, well below its long-term average of 2.6 per cent.
However, Westpac chief economist Bill Evans said the growth rate is the fastest since September 2011 and it will improve in the latter half of 2012 and into early 2013.
In the currency market, the Australian dollar was quoting at US$1.0317 in early trades, higher than Tuesday's close of US$1.0297.
The Japanese stock market opened on a firm note with investors picking up stocks, tracking a positive lead from Wall Street overnight. However, with a few front line stocks facing stiff resistance at higher levels, the market pared some of its early gains towards the end of the morning session.
Financial, oil, paper, land transport, steel and non-ferrous metals stocks opened on a firm note but subsequently came off their highs. Electric power, retail, precision instruments and chemicals stocks traded mixed.
The benchmark Nikkei 225 index, which declined to around 8,764 after surging to 8,802 in early trades, was up 18.7 points or 0.2 percent at 8,773.7 at the end of the morning session.
Olympus Corp shares gained over 4.5 percent. Tokyo Tatemono, Hitachi Zosen, Tokyu Land, Mitsui Fudosan, Astellas Pharma, Konami Corp, Kobe Steel, Nippon Light Metal, Mitsubishi Estate and Unitika all moved up by 2 to 3 percent.
TJX Holdings, Tokio Marine, Pioneer Corp, Oki Electric Industry, Sekisui House, Aozora Bank, Trend Micro, Mazda Motor, Isuzu Motors, Nippon Steel and Yahoo Japan also posted notable gains.
Kansai Electric Power declined as much as 8 percent. Taiyo Yuden lost more than 6 percent. Chibu Electric Power, Showa Denko KK, Sumco Corp and Kawasaki Kisen drifted down by 4 to 5.5 percent.
Alps Electric, Komatsu, Panasonic Corp, Nippon Sheet Glass, Kajima Corp, Asahi Glass, Credit Saison and Fuji Electric also declined sharply.
According to the minutes of the Bank of Japan's board meeting held on June 14-15, a few members said the central bank should not dismiss any policy options in advance if risks stemming from the European debt crisis are realized, adding that the bank should be ready to take appropriate action.
Members reaffirmed the view that it was necessary for the central bank to do its utmost to ensure the stability of Japan's financial system, while paying close attention to developments in global financial markets.
Many members also said a fall in Japan's long-term interest rates reflects heightening demand for JGBs, which are viewed as safe-haven assets amid ongoing concerns over the European debt problem.
In the currency market, the U.S. dollar traded at the lower 79 yen level in early deals in Tokyo. The yen is currently trading at 79.10 to the dollar.
Among other markets in the Asia-Pacific region, Indonesia, Malaysia and New Zealand are up with modest gains. Hong Kong, South Korea and Taiwan are trading notably lower, while Shanghai and Singapore are down marginally. Markets across the region ended higher on Tuesday.
On Wall Street, stocks moved mostly higher on Tuesday, after seeing considerable volatility in morning trading. The markets benefited from a positive reaction to the latest batch of earnings news as well as the release of largely upbeat U.S. economic data.
The Dow climbed 78.3 points or 0.6 percent to 12,805.5, the Nasdaq rose 13.1 points or 0.5 percent to 2,910 and the S&P 500 advanced 10 points or 0.7 percent to 1,363.7.
Major European markets turned in a mixed performance on Tuesday. While the German DAX index crept up by 0.2 percent, the French CAC 40 index edged down by 0.1 percent and the U.K.'s FTSE 100 index ended lower by 0.6 percent.
U.S. crude oil futures rallied to end higher on Tuesday after the Federal Reserve Chairman Ben Bernanke's testimony to lawmakers failed to provide any clear hint at further quantitative easing.
Crude for August delivery gained $0.79 or 0.9 percent to close at $89.22 a barrel on the New York Mercantile Exchange, after touching a low of $87.41 intraday.
by RTT Staff Writer
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