Asian stocks ended broadly lower on Friday, as investors prepared themselves for Bernanke's speech tonight, which may offer some hints to future Fed policy. With recent economic data sending mixed signals, many expect the Fed to refrain from doing anything additional to support the economic recovery.
As stimulus expectations fade, investors are now bracing for the ECB's Sept. 6 policy meeting and the Fed's Open Market Committee (FOMC) meetings on September 13 and 14 for clues about actions the central banks may take to bolster growth amid Europe's unresolved debt crisis.
Ratings agency Moody's Investors Service said it would continue its review of Spain's rating for a possible downgrade until the end of September because of pending information on the scope of bank recapitalization needs. Denying Spanish bailout talks, Prime Minister Mariano Rajoy on Thursday reassured markets that the country would meet the financial obligations of its troubled regions.
Tokyo stocks fell sharply, with the Nikkei average retreating 1.6 percent to hit a three-week low as weak economic data at home and elsewhere in Asia stoked concerns the global economy is weakening. Signs of deteriorating business performances of Chinese firms and downbeat eurozone business and consumer confidence data also raised concerns that weak global demand could hurt the country's export-dependent economy.
Chinese-linked shares came under pressure, with Komatsu down 2.2 percent and Fanuc dropping 1.5 percent. Similarly, exporters with relatively high exposure to Europe such as Canon and Sony fell about 3 percent each. Sharp plummeted nearly 13 percent after the head of Taiwanese electronics firm Hon Hai Precision Industry reportedly cut short his trip to Japan, increasing uncertainty over Hon Hai's investment in the embattled Japanese TV maker.
Industrial exporter Nippon Steel tumbled 5.6 percent after official data showed Japan's industrial output fell a seasonally adjusted 1.2 percent month-over-month in July, well shy of forecasts for an increase of 1.7 percent following the 0.4 percent gain in June. On a yearly basis, production was down 1.0 percent, the Ministry of Economy, Trade and Industry said, citing a preliminary reading.
China's Shanghai Composite index slid 0.3 percent as caution set in ahead of key PMI data for August due this weekend. Hong Kong's Hang Seng index fell 0.4 percent, extending losses for the third straight session.
Australian shares see-sawed before closing largely unchanged, helped by gains in defensive shares. The benchmark S&P/ASX 200 ended up 0.4 points or 0.01 percent, while the broader All Ordinaries index eased 1.2 points or 0.02 percent. The Australian dollar remained weak as iron ore prices hit fresh lows and traders grew nervous about prospects of further U.S. monetary easing.
Miners continued to be under pressure amid signs the eurozone probably entered recession in Q2. BHP Billiton fell 0.6 percent and Fortescue lost 1.4 percent, but Rio Tinto rose 1.3 percent. In the financial sector, ANZ slipped 0.2 percent, while NAB and Westpac rose marginally. Commonwealth gained 1.4 percent.
Retailer Harvey Norman retreated 2.4 percent after reporting a sharp drop in annual profit for the year ended June. Paladin Energy fell 2.6 percent after the uranium miner widened its full-year loss, hit by writedowns on the back of sliding uranium prices. Media stocks also lost ground, with APN Media shares plunging 27 percent after the company announced its chief financial officer peter Meyers has resigned.
Seoul shares edged down marginally as investors stayed on the sidelines fearing the Fed may not embark on another round of asset purchases to bolster U.S. growth. After swinging between gains and losses, the benchmark Kospi average ended the session down 1.26 points or 0.076 percent at 1,905. Banks led the decliners, with Shinhan Financial and KB Financial Group down 1-3 percent, while heavyweight Samsung Electronics rose 1.5 percent after it won a patent case against Apple Inc in a Tokyo court.
In economic news, South Korea's factory output fell a seasonally adjusted 1.6 percent from a month earlier in July, contracting for the second straight month, government data showed today, raising concerns the nation's economy might be faltering amid slowing global growth and renewed concerns over the eurozone debt crisis. On a yearly basis, industrial production added 0.3 percent - slowing from the downwardly revised 1.4 percent annual expansion in the previous month.
New Zealand shares rose sharply, shrugging off weak regional cues. The benchmark NZX-50 index gained a little over 1 percent. Air New Zealand shares climbed 7.4 percent to the highest level since September last year after the national carrier posted a 12 percent drop in annual profit, beating estimates. Wellington-based Xero soared 7.6 percent after the cloud-based accounting platform provider said it has added 128 staff this calendar year and is seeking 100 more before April next year.
Trade Me shares rose 2.9 percent following news that the online auction site is working with payment solutions software firm MYOB to integrate services. Gold miner Oceanagold led the decliners, falling 2.3 percent, while children clothing retailer Pumpkin Patch shed 0.9 percent.
Elsewhere, India's benchmark Sensex was last trading down a percent after government data showed the country's GDP growth languished around its lowest level in three years in the first quarter ended June. GDP grew at a higher-than-expected 5.5 percent against forecasts of 5.3 percent, dashing rate cut hopes left over, if any.
Singapore's Straits Times index was up half a percent, Indonesia's Jakarta Composite index rose 0.9 percent and the Taiwan Weighted average added 0.4 percent, after European stocks rose in early trading, snapping a three-day losing streak.
U.S. stocks ended notably lower overnight, with uncertainty ahead of Bernanke's speech contributing to the weakness. Further selling pressure was generated by a report which quoted Spanish Prime Minister Mariano Rajoy as saying that his government will delay deciding whether to seek a sovereign bailout until the aid conditions are clear.
On the economic front, jobless claims unexpectedly came in unchanged in the week ended August 25, while a separate report from the Commerce Department showed that personal income and spending rose by 0.3 percent and 0.4 percent, respectively in July, in line with economist estimates. The Dow and the S&P 500 slid about 0.8 percent each, while the tech-heavy Nasdaq dropped 1.1 percent.
by RTT Staff Writer
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