Asian markets back in red

26 Feb 2009 | 17:22 Asian markets back in red
Stock market in Asian region closed the day mostly lower on Thursday, 26 February 2009,as most of the regional market gave up their early gains closing the day mostly lowerconcern about the global economy step up as an early enthusiasm over U.S. Federal ReserveChairman Ben Bernanke signal that banks might not need to be nationalized faded amid U.S.Treasury Department's plan to "stress test" 19 of the largest banks.

On Wall Street, the stocks ended with modest losses after a day of huge gains on WallStreet the day before yesterday. Despite of strong gains in financial sector, weakness inthe same led the indices end in the red at the end. Top of it came an optimistic speechfrom President Barack Obama who said that US would definitely come out stronger from thisrecession providing some support to the stocks. The Dow Jones Industrial Average endedlower by 80 points at 7,270, the Nasdaq closed lower by 16 points at 1,425 and the S&P500 closed lower by 8 points at 765.

In the commodity market, crude oil was trading higher after rallying sharply to a monthhigh on Wednesday after a government report showed U.S. gasoline supplies fell as lowerfuel prices led to increased demand. According to the data released by the Energyinformation administration (EIA) the gasoline stockpiles declined 3.32 million barrels to215.3 million barrels last week. Consumption averaged 9 million barrels a day over thepast four weeks, up 1.7% from a year earlier, as pump prices fell. Crude oil inventoriesincreased 717,000 barrels to 351.3 million barrels in the week ended 20 February 2009.

Following the data Crude oil for April delivery was at $43.21 a barrel, up 71 cents, at11:10 a.m. London time on the New York Mercantile Exchange. Yesterday, the contract rose$2.54, or 6.4%, to $42.50 a barrel, the highest settlement since 26 January 2009.

Brent crude oil for April settlement was at $44.96 a barrel, up 67 cents, on London'sICE Futures Europe exchange at 11:10 a.m. London time.

Gold prices continued to edge lower on Wednesday and continued to retreat from last week'smulti-month highs. A stronger dollar helped drag the precious metal's hedge value lower.Gold for April delivery fell to $966.20, down $3.30 for the session. The metal continuedto fall after the close of floor trading and reached $948.20. Today, the spot gold wastrading at $US956 an ounce in Asian trade, down 1.06% from New York's notional close onWednesday.

In the currency market, the Japanese yen was quoted at 97.86 against the US dollar.

The Hong Kong dollar was trading at HK$ 7.7536 against the dollar. Actually The Hong Kongdollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85to the U.S. dollar.

In Sydney trades, the Australian dollar weakened in today's trading, closing the dayat 65.02 US cents, from yesterday's local close of 65.13 US cents.

In Wellington trades, the New Zealand dollar ended the day US51.15c, down from US51.22cyesterday. The currency spent the day trading around the US51c figure after falling a centagainst the United States dollar overnight as the greenback strengthened on its appeal asa safe haven.

The South Korean currency dipped to a near 11-year low against the U.S. dollar Thursday asforeign investors dumped local stocks on worries over the ongoing global financialturmoil, dealers said. After undergoing fluctuation, the local currency closed at 1,517.5won to the greenback, down 1.5 won from the previous session's close and the lowest levelsince 13 March 1998.

The U.S. dollar was higher against the New Taiwan dollar in the late trading in TaipeiThursday. The greenback was trading at NT$34.844 at 4:09 p.m. on the Taipei ForeignExchange, up NT$0.097 from Wednesday's NT$34.747.

Coming back in equities, Japanese markets ended the day in frail. At the closing bell,Japanese Nikkei 225 Stock Average index declined 3.29 points, or 0.04%, to 7,457.93, whilethe broader Topix lost 3.09 points, or 0.41%, to 742.53.

In Mainland China, the shares closed down 3.87%, as investors sold off stocks in financialcompanies late in the session amid renewed fears over the global economic outlook. Thebenchmark Shanghai Composite Index, which covers A and B shares, fell 85.32 points to2,121.25. The Shanghai A-share index shed 89.39 points, or 3.86 percent, to 2,226.71,while the Shenzhen A-share index fell 47.69 points, or 6.16 percent, to 726.16.

On the economic front, China's State Council announced support plans for the country'snonferrous metals and logistics sectors.

In Hong Kong, the stock market continued its alternated positive and negative finishessince halting last week's modest two-day winning streak that saw it add nearly 80 pointsor 0.7%. The increasing speculation about the economic slump weighted the investor'ssentiments. The Hang Seng Index ended the day lower by 110.14 points, or 0.85%, to12,894.94, while the Hang Seng China Enterprise Index slumped by 188.31 points, or 2.62%to 6,995.41.

On the economic front, Hong Kong's exports plunged by the most in 50 years as theglobal financial crisis slashed demand for Chinese products shipped through the city.Overseas sales dropped 21.8% in January from a year earlier, after shrinking 11.4% inDecember.

The export decline was the biggest since March 1958. Imports fell 27.1% in January from ayear earlier, resulting in a trade surplus of HK$7.2 billion ($930 million) last month,the government said.

In Australia, the stock markets managed a higher ending, led by energy companies such asWoodside Petroleum, and banks including Australia & New Zealand Banking Group. Thebenchmark S&P/ASX200 ended the day higher by 18 points, or 0.50%, to 3,345.50, whilethe broader All Ordinaries increased 15.90 points, or 0.50%, to 3,297.40.

On the economic front, the new Australian capital spending on equipment and buildings inthe fourth quarter of 2008 was up 6% compared to the previous quarter, According to theAustralian Bureau of Statistics that was substantially higher than the 0.6% quarterly gainin the previous three months. On an annual basis, new capital spending was up 5% in thefourth quarter, and spending jumped an annual 17.8%.

In another data release, the Conference Board's leading index for Australia declined inDecember by 0.9%. The private sector think tank also reported that its December coincidentindex for Australia increased 0.7%.

In New Zealand, stock market ended weak. The benchmark NZX50 slipped 0.10% or 2.387 pointsto close at 2497.433. The NZX 15 decreased 0.56% or 26.261points to 4655.763.

On the economic front, New Zealand's value of merchandise imports fell 0.9 percent ($32million) in January 2009 compared with January 2008. This fall is the first decrease inimports since August 2007. The value of merchandise exports increased 3.0 percent ($92million) during the same period.

This month's fall in imports was led by a $105 million decrease in the value of passengermotor cars, with significantly fewer cars being imported. In January 2009, the monthlytrade balance was a deficit of $187 million, or 5.9 percent of exports. This is thesmallest deficit for a January month since 2001.

In South Korea, stock markets ended lower, as worries about the Citigroup nationalisationand persistent concerns about Eastern European banks, pointing to the likelihood ofgrowing avoidance of emerging market currencies, weighed on market. The Korea CompositeStock Price Index decreased by 12.29 points or 1.15% closing the day at 1,054.79.

On the economic front, the minister of knowledge economy Lee Youn-ho said that he expectsa $3 billion trade surplus in February, as exports are set to fall less than they were amonth ago. Lee predicted in a forum that Korea's overseas shipments would drop less than20% after posting a record 33.8%t decline in January. In January, Korea posted a tradedeficit of $3.36 billion as exports fell to $21.37 billion and imports slid 31.9 percentto $24.72 billion from a year ago.

In other news, a majority of South Korean manufacturing companies forecast their businesswould remain sluggish in the second quarter of the year due to a weak local currency.According to the survey of 1,564 companies taken in early February by the Korean Chamberof Commerce and Industry (KCCI), the manufacturing business survey index was 66 for theApril-June period, up from 55 for the previous quarter.

In Taiwan, stock markets closed the day slightly higher, as the market continued to tradeat one-week closing high led by Compal Electronics, which soared after it said it expectedits second quarter shipments to rise 15% from the first quarter. The main Taiex shareindex ended higher by 24.82 points or 0.55% at 4,518.56--the strongest close since 19February 2009, when the market closed at 4528.87.

On the economic front, the Financial Supervisory Commission has drafted the"financial recovery program", according to which the government will injectfresh funds into financial institutions to help the latter exercise their fundingfunctions effectively and bolster the economy.

FSC officials pointed out that the government will lend financial support to financialinstitutions by providing funds directly, buying into those institutions, guaranteeing thefinancial products they issue, or guaranteeing their debt claims. The program has beensubmitted to the Executive Yuan (the Cabinet) and will undergo detailed planning, onceratified by the Yuan, according to FSC officials.

In Philippines, stock market reversed the yesterday's gain, closing marginally lowertracking the losses on Wall Street overnight. Moreover, investors remained in a wait andsee mode as the ahead of the monetary policy meeting of the Philippines monetary board.The benchmark index PSEi declined 0.35% or 6.72 points to 1,880.38, while the All Shareindex fell 0.58% or 7.10 points to 1,216.60.

In India, the key benchmark indices spurted in late trade to day's high on buying in autoand FMCG stocks. Hopes of a further cut in policy rates by the Reserve Bank of India alsoaided the rally. The BSE 30-share Sensex was up 52.30 points, or 0.59%, to 8,954.86. TheS&P CNX Nifty was up 23.15 points, or 0.84%, to 2,785.65.

Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.34% or 3.09 points to 893.42,while Indonesia's Jakarta composite decreased by 9.79 points or 0.75% to 1,290.32. InThailand, the Thai Stock exchange declined 2.30 points or 0.53% to 431.94.

In other regional market, European shares advanced on Thursday morning, with banks movinghigher amid relief that Royal Bank of Scotland's massive annual loss wasn't worse thanexpected. Regionally, the U.K. FTSE 100 index climbed 1.6% to 3,910.87, the German DAX 30index advanced 1.3% to 3,902.79 and the French CAC-40 index rose 1.4% to 2,733.77.

On the economic front, a gauge of economic sentiment across the euro zone fell to a newrecord low in February. According to the data released by the European Commission theeconomic sentiment indicator declined from 67.2 in January to 65.4 this month, the lowestreading since the indicator was launched in January 1985.

The drop reflects a fall in most of the indicator's component indexes, with the exceptionof a slight rise in the retail trade index, which rose 1 point to -19. The euro-zoneconsumer confidence indicator fell to -33 from -31 in January, while the industrialsentiment indicator fell to -36 from -33 in January, and the services index dropped onepoint to -23. The construction index fell two points to -32.

Looking ahead the day is scheduled to release the durable goods order data for US followedby initial and continuous jobless claims. On the housing front the new home sales datawill be released.