The markets in Asia ended the trading session on Friday, the last trading day of the week and the month, in negative territory, taking cues from Wall Street where the major averages ended the previous session in the red, on concerns about the economy. Caution ahead of the key economic data in the US related to advance second quarter GDP kept traders on the sidelines awaiting more cues on global economic recovery. Profit taking following recent gains also impacted market sentiment.
In Japan, the benchmark Nikkei 225 Index lost 158.72 points, or 1.64%, to 9,537, while the broader Topix index of all First Section issues was down 11.77 points, or 1.37% percent, to 849.
On the economic front, a preliminary report released by the Ministry of Economy, Trade and Industry revealed that an index measuring industrial output in the country unexpectedly declined 1.5% on a seasonally adjusted basis in June, compared to the previous month, posting a score of 94.7. Analysts were expecting a 0.2% increase for the month, following 0.1% monthly gain in the previous month. The report further noted that, on an annual basis, industrial production climbed 17.0%, again missing forecasts for an 18.9% increase after surging 20.4% in the previous month.
A report released by the Ministry of Internal Affairs and Communications revealed that core consumer prices in the country declined 1.0% year-on-year in June, following 1.2% decline in the previous month. Analysts expected the consumer prices to decline 1.1% for the month. The report further noted that overall inflation was down 0.7% on year after easing 0.9% in May. It was flat on month after adding 0.1% in May.
In a separate report, the Ministry of Internal Affairs and Communications revealed that the unemployment rate rose to a seasonally adjusted 5.3% in June, with 3.44 million people looking for jobs. Analysts expected the unemployment rate to be flat at 5.2% as in May. The report further noted that the total labor participation rate in the country was 59.9% with 62.80 million people having active employment.
A report released by the Ministry of Land, Infrastructure, Transport and Tourism revealed that housing starts in the country increased 0.6% year-on-year in June, after having declined 4.6% in May. Economists expected the annual growth rate in housing starts for June to be 1.8%. The report noted that annualized housing starts in June totaled 750,000, compared to 737,000 in May. The expected level was 759,000.
Real estate stocks led the decline on stronger yen. Mitsubishi Estate plunged 4.09%, Mitsui Fudosan lost 3.90%, Sumitomo Realty and Development shed 2.32%, Tokyu Land Corp. fell 3.09% and Heiwa Real Estate was down 3.27%.
Iron & Steel related stocks ended in negative territory. JFE Holdings was down 3.01%, Pacific Metals Co., declined 2.51%, Kobe Steel plunged 7.18%, Sumitomo Metal Industries fell 2.79% and Nippon Steel slipped 1.99%. However, Nisshin Steel managed to buck the trend and end in positive territory with a gain of 1.40%.
Land transport stocks also ended sharply weaker. Nippon Express plunged 9.74% and Yamato Holdings declined 4.63%.
Mixed trading was witnessed among the shipping stocks. While Nippon Yusen managed to end in positive territory with a gain of 2.23%, Mitsui OSK Lines declined 2.82%, and Kawasaki Kisen Kaisha shed 2.38%.
In Australia, the benchmark S&P/ASX200 Index declined 30.60 points, or 0.68%, and closed at 4493 points, while the All-Ordinaries Index ended at 4,507, representing a loss of 28.80 points, or 0.63%.
On the economic front, a statement released by the Reserve Bank of Australia revealed that total credit provided to the private sector by the financial intermediaries in the country increased 0.2% month-on-month in June, following an increase of 0.5% in the previous month. Compared to June 2009, total credit to the private sector rose 2.8%, the statement noted. The statement further noted that housing credit increased by 0.4% on a monthly basis, following an increase of 0.6% in May. On a yearly basis, housing credit was up 8.2%. Other personal credit fell by 0.3% compared to May, while business credit was flat. Year-over-year, other personal credit increased 3.1% while business credit declined 5%.
Banks ended in the red on profit taking. ANZ Bank slipped 0.60%, Commonwealth Bank shed 0.85%, National Australia Bank was down 0.79% and Westpac Banking lost 1.07%. Investment banking company Macquarie Group plunged 3.10%.
Mining and metal stocks also ended in negative territory. BHP Billiton was down 0.84%, Rio Tinto fell 1.24%, Fortescue Metals shed 1.15%, Gindalbie lost 2.02%, Macarthur Coal declined 1.42%, Mincor Resources shed 1.98%, and Murchison Metals plunged 2.66%. However, Oz Minerals bucked the weak trend and ended in positive territory with a gain of 1.23%.
Mixed trading was witnessed among gold related stocks. While Lihir Gold ended in positive territory with a gain of 0.25%, Newcrest Mining ended in negative territory with a loss of 0.03%.
Oil related stocks also ended weaker. Woodside Petroleum slipped 0.29%, Santos fell 1.99%, Oil Search shed 0.68% and Origin Energy was down 1.22%. However, ROC Oil Co., bucked the trend and ended in positive territory with a gain of 1.43%.
The Indian market ended Friday's session sharply lower, as investors stayed cautious ahead of second-quarter GDP data from the U.S, scheduled to be released later in the day. Investor sentiment was dampened after a Federal Reserve official said yesterday that the Fed's current policies are putting the U.S. at risk for "a Japanese-style deflationary outcome within the next several years." The BSE Sensex ended down 124 points or 0.69% at 17,868 and the 50-share S&P Nifty index fell by 41 points or 0.76% to 5,368.
All the other major markets open for trading also ended in negative territory. China's Shanghai Composite Index declined 10.61 points, or 0.40% to 2,637, Taiwan's Weighted Index was down 38.36 points, or 0.49%, to close at 7,761, Singapore's Strait Times Index slipped 9.95 points, or 0.33% to close at 2,988, and Indonesia's Jakarta Composite Index was down 27.54 points, or 0.89%, to close at 3,069.
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