01 Sep 2008 | 16:58
September Snaps August Advantage From Asian Markets
The stock markets across the Asian region closed sharply lower, led by
technology stocks, after Wall Street tumbled Friday on the back of
computer maker Dell's disappointing earnings and some weak economic
data. On Friday, the Dow closed down 1.5% at 11,544, the Nasdaq lost
1.8% to 2,367 and the broader S&P 500 dropped 1.4% to finish at
1,282.
Oil
prices rose above $116 a barrel after energy firms shut down oil
production in the Gulf of Mexico as Hurricane Gustav approached the US.
In the Asian session, oil was up $1.20 at $116.66 a barrel by 2:53 a.m.
ET as Hurricane Gustav approached the U.S. Gulf coast. On Friday, New
York's main contract, light, sweet crude for delivery in October, fell
13 cents to close at $US115.46 per barrel, reversing early gains.
On
the currency front, the U.S. dollar fell to the upper 107-yen levels in
late deals from upper 108- yen levels late Friday in Tokyo. The dollar
was quoted at 107.74-107.76 yen, down from the 108.79-108.81 late
Friday in Tokyo. The dollar weakened, as July readings on both consumer
spending and personal income, released by the U.S. Commerce Department,
were weaker than market expected.
The South Korean won tumbled
over 3% to hit a near four-year low against the dollar on Monday after
data showed the country's August exports missed market expectations.
The local unit closed at 1,116 a dollar, down 27 won from Friday's
close of 1,089.0 a dollar.
The Australian dollar closed weaker,
as traders braced for the first interest rate cut in seven years and
faltering share markets in Asia dented demand for high-yielding
currencies. The local unit finished the session at US$0.8537-0.8542,
down from Friday's close of US$0.8609-0.8611.
The New Zealand dollar closed weaker. The kiwi finished the local session at US$0.6997, down from US$0.7052 late Friday.
Coming
back in Asian equities, the South Korean market plunged more than 4%
while the Chinese market gave away 3%. The Malaysian market remained
closed on account of National Day holiday.
The Japanese market
finished sharply lower on profit taking following Friday's sharp gains.
Wall Street's steep fall on Friday revived worries about the health of
the world's largest economy and encouraged traders to lock in profits.
A stronger yen also weighed on investor sentiment. The benchmark Nikkei
225 index closed down 1.8% at 12,834.18 and the broader Topix shed 1.9%
at 1,230.62.
On the economic front, a preliminary report released
by the labor ministry showed that the average cash earnings for workers
in Japan increased by 0.3% on year in July. The rise was slightly lower
than the revised 0.4% annual increases in June.
Meanwhile, the
Japan Automobile Dealers' Association said that auto sales declined
14.9% in August from the previous year to 193,902 units. Domestic sales
of cars, truck and buses dropped in August for the first time in two
months.
The Chinese market closed sharply lower, led by financial
stocks, as there were no government policy announcements over the
weekend supporting the market. The benchmark Shanghai Composite Index
closed down 3.01% at 2,325.14. In Shenzhen, the All Share index plunged
by 3.29% to 637.51.
On the economic front, China's purchasing
managers' index, a measurement of activity in manufacturing sector,
came in at 49.2 in August, down from 53.3 in July, indicating a
contraction in the manufacturing sector for the first time since
November 2005.
The Hang Seng China Enterprises tracked Shanghai
stocks declined by 1.93% to 11,438.88 while the benchmark Hang Seng
index closed down 1.67% at 20,906.31.
The Australian stock market
closed slightly lower on Monday, ending a three-day winning streak.
Banks closed higher ahead of the Reserve Bank of Australia's interest
rate decision tomorrow. The benchmark S&P/ASX 200 index closed down
0.3% at 5,118.3 after closing up nearly 1.5% on Friday. The broader All
Ordinaries index lost 0.3% to finish at 5,200.0.
On the economic
front, Australia's current account deficit decreased in the second
quarter of 2008. The Australian Bureau of Statistics reported that the
deficit narrowed to A$12.774 billion from an upwardly revised
first-quarter figure of A$19.842 billion, marking the first reduction
in nearly two years.
Among other data released today, TD
Securities and Melbourne Institute inflation report showed a 0.1%
increase in inflation in August. On an annualized basis, the group put
the inflation at 4.2%. The full-year figure is lower than the 4.6% rate
reported for July.
Meanwhile, Australia's manufacturing sector
contracted for a third consecutive month in August, according to a
report from the Australian Industry Group and Price water house
Coopers. The group's Performance of Manufacturing Index increased 0.1
points to a reading of 47.0. Readings below 50.0 indicate contraction
in the sector.
The New Zealand stock market closed higher for the
third consecutive trading session on Monday. After a gap down opening,
led by Telecom and Fletcher Building, the market staged a remarkable
recovery and moved into positive territory by mid afternoon. The
benchmark NZX 50 index closed up 0.13% at 3,357.70, recovering from the
day's low of 3,321.42 hit in opening trade on the back of a weak lead
from Wall Street. The broader NZX All Capital index added 0.20% to
finish at 3,399.38.
The South Korean market plunged more than 4%
to its lowest close in 17 months, led by tech stocks. The benchmark
Kospi closed down 59.81 points at 1,414.43, its lowest close since
March 2007. The market also recorded its biggest one-day percentage
fall in 7 months.
South Korea's trade deficit touched US$3.23
billion in August, mainly due to high global energy prices. A
government report showed that exports rose by 20.6% from a year earlier
to US$37.39 billion, while imports grew 37.0% to US$40.62 billion. The
monthly deficit is the largest since the US$3.92 billion deficit
reported in January.
Meanwhile, South Korea's consumer price
based annual inflation stood at 5.6% in August, slower than the 5.9%
recorded in July, the National Statistical Office said. Economists were
expecting annual increase in consumer prices to accelerate to 6.3% in
August. Month-on-month, consumer prices dropped 0.2%. Core inflation,
which excludes food and fuel prices, climbed 4.7% in August from the
prior year.
In India, the key benchmark indices staged a sharp
recovery from lower level in the fag end of the trading session led by
rebound in bank shares and select pivotals. The 30-share BSE Sensex
recoupled 253 points from the day?s low it had hit in afternoon trade.
As
per provisional closing, the BSE 30-share Sensex was down 29.63 points
or 0.20% to 14,534.90. At day?s low of 14,281.10, the index fell 283.43
in early afternoon trade. At day's high of 14,547.41, the Sensex shed
17.12 points at the fag end of the trading session. The S&P CNX
Nifty was up 0.55 points or 0.01% to 4360.55. It came off session's low
of 4281.35
Elsewhere, Taiwan's Taiex slumped by 3.31% at
6,813.09; Singapore's Strait Times declined by 0.95% at 2,713.79;
Indonesia's Jakarta Composite index closed down 0.06% at 2,164.62.
In
the other part of the world, European shares kicked off the first day
of September on a downbeat note, with Commerzbank leading the banking
sector lower after the German lender agreed to buy competitor Dresdner
Bank.
Of national indexes, the German DAX 30 index lost 0.4% to
6,395.50 and the French CAC-40 index dropped 0.3% to 4,470.75. The U.K.
FTSE 100 index traded flat at 5,601.70. At 11.07 GMT all this national
indices continued to gain further. U.K. FTSE 100 index dropped further
to 0.50% to 5,608.90. The German DAX 30 index was down by 0.20% to
6,410.21, while the French CAC-40 index was down by 0.05% to 4,480.24.
On
the economic front, British home prices fell for the eleventh straight
month in August, dropping 0.9% from July and 5.3% below the level seen
in the same month last year, the lowest level since the survey began in
2001.According to real-estate data firm Home track the national average
house price fell to 167,000 pounds ($305,490) in August. Prices had
fallen 1.2% in July for a 4.4% annual decline.
Looking at the
regional manufacturing activity which showed a contraction for the
third straight month in August, as German firms reported shrinking
output for the first time in three years. The PMI for the euro zone's
factory sector rose to 47.6 in August from 47.4 in July, data from
research group Markit Economics showed Monday, beating expectations for
a rise to 47.5.
There will not be any significant data release
left on the economic event calendar as US statistical agencies are
closed on the account of Labor Day.
Visit site at - http://investorline.co.in/
Newsroom -
http://newsroom.investorline.co.in/
Learning Center- http://learning.investorline.co.in/
Mutual funds - http://mutualfunds.investorline.co.in/
Life Insurance - http://insurance.investorline.co.in/
Investor Journal - http://research.investorline.co.in/
Investor Forums- http://forums.investorline.co.in/
WebServices - http://webs.investorline.co.in/
