02 Jul 2008 | 16:06
Asian Markets Extends Losses
Asian
markets continued with another day of declines on worries about the
health of the U.S. economy and a threat to the regional economies from
rising inflation. IMF warned that inflation was pushing some developing
economies toward the tipping point of widespread hunger.
Japanese
stocks stood out as the benchmark indexes in Tokyo plunged further into
losses, as automotive exporters dropped after a steep decline in U.S.
sales last month. The Nikkei 225 Average shed 1.3% to 13,286.37, taking
its decline into a 10th straight session. The benchmark average had
lost nearly 7% in the previous nine sessions. The broader Topix index,
meanwhile, fell 1.4% to 1,301.15, after dropping in eight of the
previous nine sessions.
In Hong Kong, the Hang Seng Index declined 1.8% to 21,704.45 and the Hang Seng China Enterprises Index shed 2.5% to 11,608.92.
China's
Shanghai Composite squares off to 2,651.72 reversing a decline earlier
in the day. The Shenzhen Composite increased by 1.1% to 784.89.
Meanwhile
the International Monetary Fund warned that inflation was pushing some
developing economies toward the tipping point of widespread hunger, and
the international finance organization urged cooperation among
wealthier countries to boost supplies.
In a study of 162
countries, the Washington, D.C.-based IMF said surging global oil and
food prices are causing the most pain in poor countries that rely on
imports.
With food taking up more than half of household
spending in emerging and developing economies, the IMF warned that the
share of undernourished could rise rapidly to above 40% of the total of
their populations.
The statement from IMF gain importance on
the back of data released for the Thailand, Indonesia and South Korea
showing further accelerate, putting further pressure on central bankers
to tighten monetary policy.
Thailand's consumer price inflation
soared to a 10-year high of 8.9% in June, as compared with the
year-earlier month, official data showed Tuesday. That was up from a
7.6% figure for May. The Thai Set declined by 1.3% to 541.76.
South
Korea also reported that June consumer prices were up 5.5% from June
2007; May prices were up 4.9% from the year-earlier month. The June
price surge was the highest in 10 years. South Korea's Kospi shrank
2.6% to 1,623.60.
Separately, Indonesia said that consumer
prices were up 11.03% between June 2007 and June 2008, having been up
10.38% in May versus the year-earlier month. Indonesia?s Jakarta
Composite closed at par with 2,378.47 on the screen.
Australia's
S&P/ASX 200 gave up 0.9% to 5,094.80, marking its fourth decline in
a row. However on the economic front it was a good day for the
Australians as the retail sales climbed at a faster-than-expected pace
in May, defying expectations that consumers would curtail spending in
view of higher interest rates and surging prices for daily necessities.
Sales
rose 0.7% from April on a seasonally adjusted basis, rebounding from a
0.1% contraction that month, according data released by the Bureau of
Statistics Wednesday. The result beat consensus estimates for a 0.2%
rise.
Spending on recreational goods rose 2.2%, marking the
largest increase among sectors tracked. Spending on food rose 1%, while
hospitality and services climbed 2.4%.
Spending on household goods fell 1% and department store sales were down 0.8%.
Also
extending losses, South Korea's Kospi slipped 2.6% to 1,623.60 for its
fifth straight session of losses while New Zealand's NZX 50 index
slipped 0.4% to 3,163.39. Taiwan's weighted index declined 0.7% to
7,353.86 and Singapore's Straits Times index ended on par with
2,906.23. Philippines' Composite index shed 0.9% to 2,393.90.
India's
30-constituent Sensitive Index, or Sensex, gained 5.4% to 13,664.62 and
the 50-stock S&P/CNX Nifty also zoomed up by 5.1% to 4,0.98.35.
In currency trading, the U.S. dollar bought 105.99 yen in Asia, compared with 105.39 yen in midday European trading.
Crude-oil
futures extended their winning streak to four sessions Tuesday as
weakness in the U.S. dollar underpinned demand for energy and global
production concerns continued.
But uncertainty ahead of this
week's update on U.S. petroleum supplies and some assumptions that high
prices hurt energy demand kept prices in check, prompting a pullback
from the day's high of more than $143 a barrel.
August
crude-oil futures rose as much as $1.20 to $143.33 a barrel in
electronic trading, after finishing 97 cents higher at $140.97 a barrel
on the New York Mercantile Exchange.
On Wall Street, the Dow
Jones Industrial Average gained 32.25 points to end at 11,382.26,
rebounding from steep losses earlier in the session, after data showed
that General Motors Corp.'s June sales didn't drop as much as expected.
The S&P 500 index rose 4.91 points to 1,284.91, while the Nasdaq
Composite gained 11.99 points to 2,304
Moving towards European
markets, which extended gains backed by gains from banks and miners.
The U.K. FTSE 100 index rose 1.4% to 5,558.00, the German DAX 30 index
climbed 1.2% to 6,393.55 and the French CAC-40 index advanced 0.8% to
4,376.32
For the region the day started with a bang as high
energy costs pushed producer prices in the euro zone to an 18-year high
in May, providing more justification for the European Central Bank's
view that a rate hike may be needed to stem inflationary pressures in
the currency bloc.
Prices of goods leaving euro-zone factory
gates rose 1.2% on the month and 7.1% on the year in May, well ahead of
market expectations for a 0.8% rise on the month and a 6.6% annual
gain. Euro stat revised April's producer price data upward to show
rises of 0.9% on the month and 6.2% on the year.
Much of the gain was driven by soaring energy costs, which surged 4.1% over the month and 18.2% over the year in May.
Excluding
construction and energy, prices rose 0.3% on the month and 3.8% on the
year in May. That follows gains of 0.4% on the month and 3.7% on the
year in April.
The May annual PPI gain was the highest since
records began in January 1990, while the monthly gain matches a
previous record high of 1.2% recorded in January 2006.
In UK
construction sector saw activity fall at a record pace in June, a key
survey has found. The Chartered Institute of Purchasing and Supply
(CIPS) said the purchasing managers index (PMI) for the construction
sector slumped to 38.8 in June, its lowest ever, from 43.9 in May. CIPS
said the June PMI points to the sharpest decline in output since the
survey began in April 1997.
Meanwhile, the Organisation for
Economic Cooperation and Development said unemployment is expected to
start increasing this year after declining steadily in recent years.
The declining trend in unemployment in recent years is projected to
reverse in 2008, with the number of unemployed persons in the OECD area
increasing by 1 million persons in 2008 and by nearly a further 2
million in 2009.
The organization said in its annual employment
outlook that the unemployment will rise to 32.9 million this year and
to 34.8 million next year from 31.9 million in 2007.
The
unemployment rate is projected to edge up to 5.7 percent this year from
5.6 percent last year and then to rise to 6.0 percent in 2009,
returning to its 2006 level.
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Asian Markets Extends Losses
Asian
markets continued with another day of declines on worries about the
health of the U.S. economy and a threat to the regional economies from
rising inflation. IMF warned that inflation was pushing some developing
economies toward the tipping point of widespread hunger.
Japanese
stocks stood out as the benchmark indexes in Tokyo plunged further into
losses, as automotive exporters dropped after a steep decline in U.S.
sales last month. The Nikkei 225 Average shed 1.3% to 13,286.37, taking
its decline into a 10th straight session. The benchmark average had
lost nearly 7% in the previous nine sessions. The broader Topix index,
meanwhile, fell 1.4% to 1,301.15, after dropping in eight of the
previous nine sessions.
In Hong Kong, the Hang Seng Index declined 1.8% to 21,704.45 and the Hang Seng China Enterprises Index shed 2.5% to 11,608.92.
China's
Shanghai Composite squares off to 2,651.72 reversing a decline earlier
in the day. The Shenzhen Composite increased by 1.1% to 784.89.
Meanwhile
the International Monetary Fund warned that inflation was pushing some
developing economies toward the tipping point of widespread hunger, and
the international finance organization urged cooperation among
wealthier countries to boost supplies.
In a study of 162
countries, the Washington, D.C.-based IMF said surging global oil and
food prices are causing the most pain in poor countries that rely on
imports.
With food taking up more than half of household
spending in emerging and developing economies, the IMF warned that the
share of undernourished could rise rapidly to above 40% of the total of
their populations.
The statement from IMF gain importance on
the back of data released for the Thailand, Indonesia and South Korea
showing further accelerate, putting further pressure on central bankers
to tighten monetary policy.
Thailand's consumer price inflation
soared to a 10-year high of 8.9% in June, as compared with the
year-earlier month, official data showed Tuesday. That was up from a
7.6% figure for May. The Thai Set declined by 1.3% to 541.76.
South
Korea also reported that June consumer prices were up 5.5% from June
2007; May prices were up 4.9% from the year-earlier month. The June
price surge was the highest in 10 years. South Korea's Kospi shrank
2.6% to 1,623.60.
Separately, Indonesia said that consumer
prices were up 11.03% between June 2007 and June 2008, having been up
10.38% in May versus the year-earlier month. Indonesia?s Jakarta
Composite closed at par with 2,378.47 on the screen.
Australia's
S&P/ASX 200 gave up 0.9% to 5,094.80, marking its fourth decline in
a row. However on the economic front it was a good day for the
Australians as the retail sales climbed at a faster-than-expected pace
in May, defying expectations that consumers would curtail spending in
view of higher interest rates and surging prices for daily necessities.
Sales
rose 0.7% from April on a seasonally adjusted basis, rebounding from a
0.1% contraction that month, according data released by the Bureau of
Statistics Wednesday. The result beat consensus estimates for a 0.2%
rise.
Spending on recreational goods rose 2.2%, marking the
largest increase among sectors tracked. Spending on food rose 1%, while
hospitality and services climbed 2.4%.
Spending on household goods fell 1% and department store sales were down 0.8%.
Also
extending losses, South Korea's Kospi slipped 2.6% to 1,623.60 for its
fifth straight session of losses while New Zealand's NZX 50 index
slipped 0.4% to 3,163.39. Taiwan's weighted index declined 0.7% to
7,353.86 and Singapore's Straits Times index ended on par with
2,906.23. Philippines' Composite index shed 0.9% to 2,393.90.
India's
30-constituent Sensitive Index, or Sensex, gained 5.4% to 13,664.62 and
the 50-stock S&P/CNX Nifty also zoomed up by 5.1% to 4,0.98.35.
In currency trading, the U.S. dollar bought 105.99 yen in Asia, compared with 105.39 yen in midday European trading.
Crude-oil
futures extended their winning streak to four sessions Tuesday as
weakness in the U.S. dollar underpinned demand for energy and global
production concerns continued.
But uncertainty ahead of this
week's update on U.S. petroleum supplies and some assumptions that high
prices hurt energy demand kept prices in check, prompting a pullback
from the day's high of more than $143 a barrel.
August
crude-oil futures rose as much as $1.20 to $143.33 a barrel in
electronic trading, after finishing 97 cents higher at $140.97 a barrel
on the New York Mercantile Exchange.
On Wall Street, the Dow
Jones Industrial Average gained 32.25 points to end at 11,382.26,
rebounding from steep losses earlier in the session, after data showed
that General Motors Corp.'s June sales didn't drop as much as expected.
The S&P 500 index rose 4.91 points to 1,284.91, while the Nasdaq
Composite gained 11.99 points to 2,304
Moving towards European
markets, which extended gains backed by gains from banks and miners.
The U.K. FTSE 100 index rose 1.4% to 5,558.00, the German DAX 30 index
climbed 1.2% to 6,393.55 and the French CAC-40 index advanced 0.8% to
4,376.32
For the region the day started with a bang as high
energy costs pushed producer prices in the euro zone to an 18-year high
in May, providing more justification for the European Central Bank's
view that a rate hike may be needed to stem inflationary pressures in
the currency bloc.
Prices of goods leaving euro-zone factory
gates rose 1.2% on the month and 7.1% on the year in May, well ahead of
market expectations for a 0.8% rise on the month and a 6.6% annual
gain. Euro stat revised April's producer price data upward to show
rises of 0.9% on the month and 6.2% on the year.
Much of the gain was driven by soaring energy costs, which surged 4.1% over the month and 18.2% over the year in May.
Excluding
construction and energy, prices rose 0.3% on the month and 3.8% on the
year in May. That follows gains of 0.4% on the month and 3.7% on the
year in April.
The May annual PPI gain was the highest since
records began in January 1990, while the monthly gain matches a
previous record high of 1.2% recorded in January 2006.
In UK
construction sector saw activity fall at a record pace in June, a key
survey has found. The Chartered Institute of Purchasing and Supply
(CIPS) said the purchasing managers index (PMI) for the construction
sector slumped to 38.8 in June, its lowest ever, from 43.9 in May. CIPS
said the June PMI points to the sharpest decline in output since the
survey began in April 1997.
Meanwhile, the Organisation for
Economic Cooperation and Development said unemployment is expected to
start increasing this year after declining steadily in recent years.
The declining trend in unemployment in recent years is projected to
reverse in 2008, with the number of unemployed persons in the OECD area
increasing by 1 million persons in 2008 and by nearly a further 2
million in 2009.
The organization said in its annual employment
outlook that the unemployment will rise to 32.9 million this year and
to 34.8 million next year from 31.9 million in 2007.
The
unemployment rate is projected to edge up to 5.7 percent this year from
5.6 percent last year and then to rise to 6.0 percent in 2009,
returning to its 2006 level.
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