Asian markets closes mixed

27 Feb 2009 | 17:24 Asian markets closes mixed
Stock market in Asian region closed mixed on Friday, 27 February 2009, as sentimentsamong the investors remained fragile with global economic data continuing to paint aworsening picture.

On Wall Street, stocks ended with losses once again though the financial and technologysectors gave a strong start to the day, stocks ended the day on a choppy note as morenegative headlines continued to hit the wires. The Dow Jones Industrial Average endedlower by 88 points at 7,182, the Nasdaq closed lower by 34 points at 1,391 and the S&P500 closed lower by 12 points at 752.

In the commodity market, crude oil snapped a three-day rally as Japanese data showed theworld's third-biggest user of crude is headed for its worst postwar recession. Oilgained earlier this week after a U.S. government report showed a drop in gasolinestockpiles and OPEC members called for further cuts in output.

Crude oil for April delivery fell as much as 64 cents, or 1.42%, to $44.58 a barrel on theNew York Mercantile Exchange at 10:55 a.m. London time.

Brent crude oil for April settlement declined as much as 43 cents, or 0.92%, to $46.08 abarrel on London's ICE Futures Europe exchange.

Gold closed lower again Thursday for its first four-session losing streak sincemid-January as traders continued to back away from the safety investment. April golddropped to $942.60, down $23.60 on the day. Today, the spot gold was trading at $US946.30an ounce in Asian trade, up 0.39% from New York's notional close on Thursday.

In the currency market, the Japanese yen was quoted at 97.5650 against the US dollar.

The Hong Kong dollar was trading at HK$ 7.7538 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 closed weaker after a record fall in Japaneseindustrial production left the local currency facing heavy selling pressure in latemorning trade. The Australian dollar closed the session at $US0.6454, down from Thursday'sclose of $US0.6502.

The Australian dollar shed a third of a US cent after data showed Japanese industrialproduction fell 10% in January, following a 9.8% drop in December. Japan, one ofAustralia's biggest trading partners, suffered its biggest monthly drop in manufacturingoutput since government records began in 1953.


In Wellington trades, the New Zealand dollar ended the day at US50.56c, up from theprevious closing of US50.15c yesterday. The jobs summit is not a market mover so the focusin the currency market was, as usual, on global events and movements in equity markets.

The South Korean currency fell to an 11-year low against the U.S. dollar Friday asoffshore investors snapped up the greenback amid ongoing global financial turmoil, dealerssaid.

The local currency closed at 1,534 won to the greenback, down 16.5 won or 1.08 percentfrom the previous session's close and the lowest level since March 1998 when South Koreawas in the midst of the 1997-98 Asian financial crisis.

The U.S. dollar was higher against the New Taiwan dollar in the late trading in TaipeiThursday. The greenback was trading at NT$34.9920 at 3:06 p.m. on the Taipei ForeignExchange, up NT$0.097 from Thursday's NT$34.850.

Coming back in equities, in Japan, extended gains after a media report stating thatCitigroup and the U.S. government have reached a deal to convert the government's stake tocommon stock.

The benchmark Nikkei gained 110.49 points to 7,569.42, snapping a two-week losing streak,despite falling earlier this week to within sight of a 26-year low just under 7,000. Thebroader Topix, which earlier this week posted its lowest close since 1983, rose 1.91% or14.18 points to 756.21.

In Mainland China, share prices dropped, as falling corporate profits and lack of furthergovernment stimulus undermined investor confidence. The benchmark Shanghai CompositeIndex, opened higher on government announced stimulus plans, but dipped 38.4 points, or1.81%, to 2,082.85 points as bank shares' weak performance put a damper on the market. TheShenzhen Component Index on the smaller Shenzhen bourse dropped to 7,608.22 points, down169.68 points, or 2.18%.

In Hong Kong, the stock market sealed the week on a lower note, as overnight losses onWall Street and a weak run in the Shanghai market weighed down the regional stocks. TheHang Seng Index ended the day lower by 83.37 points, or 0.65%, to 12,811.57, while theHang Seng China Enterprise Index, which tracks H shares of Chinese companies, slumped by92.57 points, or 1.32% to 6,902.84.

For the week the Hang Seng index fell 0.88% or 112.40 points while the Hang Seng ChinaEnterprise Index added 163.48 points or 2.31%. For the month of February 2009, the HangSeng index slumped by 466.64 points or 3.51% while the Hang Seng China Enterprise Indexfell 229.13 points or 3.21%.

In Australia, stock market ended the day marginally weaker, after a volatile day for themain indexes, as energy stocks advanced. The big miners also help to hold up the market,however the star performer of the day was Oz Minerals, up 12.5%, after it received afour-week extension to refinance its debt, and delivered a $2.5 billion annual loss.

The benchmark S&P/ASX200 ended the day flat with a fall of 1 point closing the week at3,344.50, while the broader All Ordinaries decreased 0.50 points to 3,296.90. For theweek, the benchmark S&P/ASX200 ended 1.70% down closing the week 57.9 points lower.The broader All Ordinaries declined by 1.67% or 56.1 points. For the month of February thebenchmark S&P/ASX200 lost 5.54% or 196.2 points while the broader All Ordinariesdropped 5.20% or 181.20.

On the economic front, private sector credit rebounded in January, helped by robust demandfor loans from businesses and homebuyers, adding to the case for a pause in the feverishpace of interest rate cuts next week. According to the data released by the Reserve Bankof Australia the private sector bank lending increased a seasonally adjusted 0.6% fromDecember, a bounce from a 0.2% fall in December - the first contraction since 1992. Creditgrowth for the year remained sluggish, slowing to 6.1%, its slowest pace since March 1994.

Credit to the housing sector increased 0.5% on month and was 7.4% higher than a yearearlier. Business sector credit was up 0.7% on month and 6.8% higher than a year earlier.The only lending category to decline was personal sector credit, which fell 0.2% on monthand fell 4.9% from one year ago.

In New Zealand, share market ended the day up more than 1% despite a flat start, afterequities in the United States ended lower. The benchmark NZX50 advanced 1% or 24.884points to close at 2522.317. The NZX 15 increased 1.02% or 47.397 points to 4703.16.

In South Korea, stock markets ended the day higher, continuing its alternated positive andnegative finishes since last week's losing streak that saw it loss of 126.49 points or10.60%. Today's gains were supported by the profits in technology sector, but gainswere limited by further weakness in the won and persistent economic worries.

The Korea Composite Stock Price Index increased by 8.24 points or 0.78% closing the day at1,063.03. For the week the Kospi ended lower by 2.92 points or 0.27%. For the month ofFebruary the index slumped by 99.08 points or 8.52%

On the economic front, South Korea's current account swung to a deficit in four months inJanuary as the global economic slump dealt a heavy blow to exports, the mainstay of thelocal economy, the central bank said today.

According to the Bank of Korea report, the current account shortfall reached $1.36 billionin January, a turnaround from a $860.8 million surplus the previous month. The country'scurrent account remained in the black for the third consecutive month in December.

In Philippines, stock market remained flat, closing marginally lower, reflecting theuncertainty of the investor's over the country's economy. At the finishing bell,the benchmark index PSEi dived 0.43% or 8.16 points to 1,872.22, while the All Share indexlost 0.45% or 5.58 points to 1,211.02.

In Taiwan, stock market in Taiwan closed the session higher for the straight session,ending the week as well as the month on firm note. The benchmark index touched the neartwo-weeks high today, as DRAM makers put up good gains as Taiwan's government set toannounces the plans to overhaul the sagging industry in the next week.

The main Taiex share index made an addition of 38.59 points or 0.85% at 4,557.15 strongestclose since 16 February 2009 when market closed at 4591.26. For the week, the Taiex shareindex ended 2.70% upward closing the week 120.21 points higher. For the month of Februarythe Taiex share index jumped 7.27% or 309.18 points.

On the economic front, there was a series of data releases that investors on the edge. Theunemployment rate rose to 5.31% in January, leaving a record 578,000 people looking for ajob. The number of unemployed people was also the highest since 1978. In December, therate crossed the 5% mark to reach 5.03%, with more than half a million people unemployed.More than half of those, or 291,000, had been laid off as the result of business closuresor downsizing.

The DGBAS yesterday also announced that real earnings after inflation dropped by 3.37%last year, the largest fall since records started in 1980.

In another economic release, the total outstanding loans extended by Taiwan'sdomestic banks reached US$18.514 trillion as of December of 2008, plunging NT$153.2billion (US$4.79 billion) from a month earlier, according to the statistics released bythe Bureau of Monetary Affairs under the Cabinet-level Financial Supervisory Commission(FSC).

Financial officials indicated that the sharp drop in outstanding loans extended bydomestic banks as of December of 2008 was due mainly a decrease of over 40% in theisland's exports during the month. This suggested that enterprises might not needmore operating capital if without booming business. Besides, the write-off of bad loansalso helped lower the outstanding loans.

In a separate release from the central bank of Taiwan, the annual growth of Taiwan'sbroad money supply-M2-shot up to 7.17% in January 2009, a new high since February of 2006and already breaking the target growth range of 2.5%-6.5% set by the central bank for theyear.

In the same month the annual growth of M1A and M1B, Taiwan's other two major moneysupply indicators, stood at 4.84% and 1.79%, respectively. The latter witnessed negativemonthly growth for some one year and finally turned positive in January.

Financial experts indicated that the sharp growth of M1B and M2 implied that Taiwan'sfinancial market is awash with capital funds. In January the outstanding time deposits andpassbook deposits amounted to NT$12.61 trillion and NT$7.39 trillion (US$230.94 billion),respectively, with the former posting a monthly decline of NT$38.1 billion (US$1.19billion) and the latter a growth of NT$75.5 billion (US$2.36 billion).

Taiwan's consumer loans fell to the lowest in almost two years in January, afterbanks tightened credit lines to individuals amid rising unemployment and a record economiccontraction last quarter. Consumer loans, including car loans, housing mortgages and loansfor home renovations, dropped to NT$6.66 trillion ($191 billion) in January, the lowestsince May 2007, Taiwan's central bank said in a statement.

In India, the key benchmark indices recovered sharply in intraday trade as banking stocksreversed losses and IT stocks recovered. India's largest steel maker by sales Tata Steelspurted after announcing better-than-expected Q3 December 2008 consolidated results inlate trade. The BSE 30-share Sensex was down 63.25 points, or 0.71%, to 8,891.61. TheS&P CNX Nifty was down 22 points, or 0.79%, to 2,763.65.

On the economic front, India's economy grew at its slowest annual pace in almost six yearsby 5.3% in Q3 December 2008 as the global economic crisis cut demand and exports. Thefigure is sharply lower from 7.6% in Q2 September 2008. The manufacturing sector fell 0.2%in in Q3 December 2008 from a year earlier, while the farm sector contracted an annual2.2%, government data showed on Friday, 27 February 2009. India's economy grew 7.6% in theSeptember 2008 quarter and 7.9% in the June 2008 quarter. India has estimated the economyto grow 7.1% in 2008/09, slowing from the 9% in the previous year.

Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.31% or 2.75 points to 890.67,while Indonesia's Jakarta composite decreased by 4.85 points or 0.38% to 1,285.48. InThailand, the Thai Stock exchange declined 0.42 points or 0.10% to 431.52.

In other regional market, European shares fell on Friday morning, giving back much of theprevious session's advance as selling returned to the banking sector and drug makers alsotraded notably lower. Regionally, the U.K. FTSE 100 index fell 1.6% to 3,853.86, theGerman DAX 30 index fell 1.4% to 3,886.54 and the French CAC-40 index slid 1.8% to2,694.69.

On the economic front, the unemployment rate across the euro zone rose to 8.2% in January,compared to an upwardly revised 8.1% the previous month, the statistical agency Eurostatreported today. The unemployment rate stood at 7.3% in January 2008. December unemploymentwas initially estimated at 8%.

In other news, the consumer prices in the euro zone rose at an annual pace of 1.1% inJanuary, down from 1.6% in December. The figure was unrevised from Eurostat's preliminaryestimate of January inflation. On a monthly basis, consumer price inflation fell 0.8% inJanuary.

Looking ahead the economic calendar for the week will end personal consumption expendituredata from US which will be accompanied by Chicago purchasing mangers index andReuters/Michigan consumer sentiment index. However focus of the eveing will be on grossdomestic product of US in the fourth quarter which expected to show a deeper plunge thanthe previous one.