05 Sep 2008 | 17:07
Asian Market Ends Week With Broad Base Fall
The stock markets across the Asian region closed sharply lower, but off
day's lows, after the U.S. market tumbled overnight amid a government
report that jobless claims rose more than the expected and sluggish
same store sales for the month of August. On Wall Street, the Dow and
the broader S&P 500 indexes tumbled 3.0% each and the tech-heavy
Nasdaq plunged 3.2% after a government report showed that jobless
claims rose more than analysts expected for the week ended 30 August
2008 and retailers reported sluggish same store sales for the month of
August.
Oil
prices fell for a sixth day, closing at their lowest level in five
months, as a lower-than-expected drop in U.S. stockpiles raised
concerns about slowing demand for oil. Crude oil prices fell as much as
$1.69 in late Asian trade. By 5:08 a.m. ET, oil was quoted at $106.20 a
barrel.
In the currency market, the dollar lost ground against
major Asian currencies. The U.S. dollar held steady in the upper
106-yen level in late afternoon trades in Tokyo, down 1.49 yen from
Thursday's close of 108.33-108.36 yen.
The South Korean won rose
against the U.S. dollar for a second straight session on Friday, as
suspected dollar selling by authorities boosted the struggling local
unit. The won closed a volatile trading session at 1,117.8 a dollar, up
from Thursday's close of 1,129.0 a dollar. The won has plunged more
than 16% so far this year, with its value losing over 3% during the
week.
The Australian dollar closed at its weakest level in more
than a year following a sharp fall on Wall Street. The local unit has
now lost 17% against the U.S. dollar in less than two months after
touching a 25-year, pre-float high of US$0.9849 on July 16. The Aussie
finished the session at US$0.8175-0.8179, down sharply from Thursday's
close of US$0.8353-0.8357.
The New Zealand dollar recovered to
finish the session at US$0.6660 after falling to US$0.6590 by mid
morning for the first time in 22 months. The kiwi finished Thursday's
session at US$0.6817.
Coming back in equities, the Japanese stock
market closed sharply lower, with the key indexes falling to their
lowest levels since mid March, ahead of the U.S. non-farm payroll
report for August scheduled for release later in the day. Wall Street's
sharp decline overnight and a stronger yen encouraged market players to
sell a wide range of stocks. The key Nikkei index briefly fell more
than 3% to 12,163.33 in the morning, but bargain hunting among trading
houses helped the market to recoup some of the losses.
The
benchmark Nikkei 225 Index closed down 2.75% at 12,212.23, extending
yesterday's losses. The key index has lost 6.6% over the week. The
broader Topix Index lost 2.56% to finish at 1,170.84.
On the
economic front, the Ministry of Finance said that Japanese capital
investment spending, or capex, was down an annual 6.5% in the second
quarter of 2008. This marked the fifth consecutive quarter of decline.
Capex was down an annual 4.9% in the first quarter of the year.
The
ministry also said that Japan's foreign reserves fell for the first
time in three months in August. The country's foreign reserves in
August stood at 997 billion yen, down 7.92 billion yen from 1.00
trillion yen in the previous month.
The Chinese market closed
sharply lower, after it rebounded yesterday ending a three-day losing
streak. Steep losses on Wall Street following a rise in jobless claims
and weak consumer spending data heightened concerns about the health of
the U.S. economy. Additionally, news of a large IPO from China
Merchants Securities and a new rule on share sales that would shorten
the lock-up period for holders of pre-IPO shares dented sentiment.
Property developers and non-ferrous metal stocks led the decliners.
The
benchmark Shanghai Composite Index closed down 3.29% at 2,202.45, a
fresh 20 month-closing low. In Shenzhen, the All Share index plunged by
3.74% to 608.18.
The Hang Seng China Enterprises tracked Shanghai
stocks lost 2.10% to 10,695.86 while the benchmark Hang Seng index
closed down 2.24% at 19,933.28.
The Australian stock market
closed lower for the sixth straight trading session on Friday. Wall
Street's triple-digit losses overnight prompted traders to sell their
stocks. However, the market came off its lows for the session following
a recovery among the big miners. Bank stocks led the decliners on
growing concern about the turmoil in the financial markets all over the
world.
The benchmark S&P/ASX 200 index closed down 2.1% at
4,877.1, recovering from an intraday drop of 2.9% to 4,837.6. For the
week, the key index has lost 5%, extending this year's retreat to 23%.
The broader All Ordinaries index lost 2.0% to finish at 4,949.5.
On
the economic front, activity in Australia's construction sector
improved a little in August, but remained in a state of contraction for
a sixth straight month. The Australian Industry Group and Housing
Industry Association's Performance of Construction Index or PCI for
August moved up 1.5 points to 43.1. The reading was well below the 50.0
mark that distinguishes expansion from contraction.
The New
Zealand stock market closed lower on Friday, extending Thursday's
losses. The market started off sharply lower, tracking Wall Street's
plunge overnight, but recovered some ground over the course of the
trading session to finish slightly below the flat line. The benchmark
NZX 50 index closed down 0.36% at 3,336.18, after hitting an intraday
low of 3,314.16, and the broader NZX All Capital Index fell 0.17% to
finish at 3,385.76.
On the economic front, Statistics New Zealand
said that seasonally adjusted total wholesale trade sales increased
3.1% or NZ$686 million for the June quarter, led by fuel. The rise in
the latest quarter followed a flat result in the three months to March,
when sales were down 0.1% or NZ$11 million.
The South Korean
market closed lower, extending yesterday's losses. The key Korea
Composite Stock Price Index or Kospi index plunged 2.3% at opening, but
regained ground to finish 1.55% or 22.05 points lower at 1,404.38, as
Wall Street's plunge overnight raised fresh concerns about the strength
of the U.S. economy. Over the week, the key index has lost 4.7%.
On
the economic front, the South Korean economy expanded 0.8% on quarter
in the April-June period, unchanged from an advance estimate, according
to a report by the Bank of Korea.
In India, intense selling in
index pivotals ever since the opening bell led a sell-off on the
bourses today. The BSE 30-share Sensex fell 415.38 points, as per
provisional closing. Recovery from lower level in afternoon trade
proved short-lived. Weak global markets weighed on the domestic
bourses.
On the economic front, the annual inflation rose
12.34% in the year through 23 August 2008, lower than previous week?s
12.40% rise, data released by the government after trading hours on
Thursday, 4 September 2008 showed. Food prices for staples like lentils
and vegetables eased while fuel prices remained flat, the data showed.
Inflation, however, remains far above central bank?s target level of 7%
towards the year ending March 2009.
On political front, the
Nuclear Suppliers Group (NSG) is reportedly inching towards forging a
consensus on clearing a waiver to India for nuclear commerce, a
decision that can take the Indo-US nuclear deal forward. The United
States said on Thursday, 4 September 2008, 45 nations were making
headway towards agreement on lifting a ban on nuclear trade with India
after Washington reworked a draft for the move to ease proliferation
fears. The two-day meeting of NSG ends today, 5 September 2008.
The
opposition BJP accused Prime Minister Manmohan Singh of misleading
Parliament and the country on the nuclear deal issue and demanded the
resignation of the Manmohan Singh government. Senior BJP leader
Yashwant Sinha said in view of the gross breach of privilege of both
the Houses of Parliament, an immediate session of Parliament should be
convened within the shortest possible time to enable BJP to move a
privilege motion against the Prime Minister if the UPA did not quit.
The
BJP made the demands in the wake of the disclosure of correspondence
between the Bush administration and US Congress that the Indo-US
nuclear pact would be off if India conducted a nuclear test.
The
BSE 30-share Sensex fell 415.38 points or 2.79% to 14,483.72, as per
provisional closing. It opened 330.09 points lower at 14,569.01. At the
day?s low of 14,438.59 hit in afternoon trade, the Sensex lost 460.51
points. At the day?s high of 14,601.39 hit in early afternoon trade,
the Sensex fell 297.71 points. The S&P CNX Nifty declined 92.40
points or 2.08% to 4,355.35 as per provisional closing
In
Philippines, the consumer prices jumped to a near 17-year high of 12.5%
in August from a year earlier. Core inflation, which strips out some
volatile food and energy items, reached an annual 7.0% in August
compared to 6.3% in July, the National Statistics Office said. In
addition to this, The Philippines' gross international reserves (GIR)
slipped to $36.74 billion at the end of August from $36.90 billion the
previous month mainly due to the lower value of its gold holdings. The
Philippines index plunged by 1.06% to 2,724.72.
Elsewhere,
Taiwan's Taiex slumped by 1.64% at 6,307.28; Singapore's Strait Times
declined by 1.97% at 2,574.21. The Indonesian Jakarta Composite index
closed down 2.54% at 2,022.56. The Malaysian KLSE Composite declined by
1.34% to 1,070.54.
In the other part of the world, European
shares extended losses in the morning, with banks and miners among the
lead decliners. U.S. jobs data is on tap later in the session.
Of
national indexes, the U.K. FTSE 100 index declined 1.6% to 5,278.40,
the German DAX 30 index lost 1.5% to 6,188.34 and the French CAC-40
index dropped 1.5% to 4,239.95. At 11.44 GMT all this national indices
continued with their negative positions as U.K. FTSE 100 index declined
by 1.67% to 5,272.80. The German DAX 30 index was down by 1.59% to
6,179.68, while the French CAC-40 index was down by 1.66% to 4,232.39.
In
Germany, industrial production fell 1.8% on the month in July reversing
a brief up tick in output seen in June. On the year, industrial output
fell 0.6%. However, industrial output rose 2.6% in unadjusted terms on
the year, the ministry said.
In France, the budget deficit has
widened in July to 51.4 billion euros ($73.5 billion) from 48 billion
at the end of July 2007. Spending was down 0.4% year-on-year at 164.02
billion euros, while revenues fell by 0.3% to 134.58 billion. At the
end of June, the deficit had stood at 32.8 billion euros.
In
Italy, the trade deficit with the rest of the world widened to a
five-month high in June to EUR1 billion from a surplus of EUR395
million in the same month last year as imports outpaced exports.
Italian exports to the rest of the world fell 3.8% on the year, while
imports increased 0.6%, Istat said.
Looking ahead the day is
scheduled to close the weekly calendar by releasing some of he most
awaited economic reports. The day features average weekly earning for
the month of August. However, the focus of day will be on Non farm
payrolls and unemployment rate for the month of August. In the late
evening we have purchasing managers index for Canada
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