Asian Markets closes mostly lower

18 Feb 2009 | 16:59 Asian Markets closes mostly lower
Stock market in Asian region slumped to their lowest level in this month on Wednesday18 February 2009, as deepening economic gloom and fears about the global finance sectorprompted investors to move to low-risk assets such as government bonds. Investors werealso worried about the fate of European banks after two rating agencies said that bankscould be hit by the recession in Eastern Europe.

Among Asia's hardest hit markets was Shanghai, where its main index slumped nearly 5% asshrinking turnover suggested inflows of fresh money into the market were drying up. Stockmarkets in Australia and South Korea fell more than 1% each, though Singapore and Taiwanmanaged slight gains

On Wall Street, the stocks ended almost at their session lows, despite President BarackObama signing the stimulus package to jumpstart the economy, indices showed no signs ofimprovement. Bogged down by the financial sector, stocks lingered in the red despite asomewhat encouraging report from the housing sector. Market even ignored quite a few goodearning reports. The Dow Jones Industrial Average ended lower by 297 points at 7,552, theNasdaq closed lower by 64 points at 1,470 and the S&P 500 closed lower by 38 points at789.

In the commodity market, crude oil traded below $35 a barrel in New York on speculationthat U.S. stockpiles climbed for the 19th time in 21 weeks amid a drop in demand becauseof the deepening global recession.

Crude oil for March delivery was at $34.89 a barrel, down 4 cents, in electronic tradingat 10:39 a.m. London time. In New York yesterday, futures fell $2.58, or 6.9%, to settleat $34.93 a barrel, the biggest decline since Jan. 27. The March contract expires on 20February 2009. The more active April contract was at $38.28 a barrel, down 26 cents, at11:58 a.m. Singapore time.

Brent crude oil for April settlement was at $41.35 a barrel, up by 32 cents, at 10:39 a.m.London time. It declined yesterday $2.25, or 5.2%, to end the session at $41.03 a barrel,the lowest since 30 December 2009.

Gold prices steadied on Wednesday, taking a breather after hitting a new seven-month highthe previous day when investors fled to safe-haven investments on growing concerns overthe global economy.

Spot gold was trading at $US967.35 an ounce, down $US2.30 from the notional New York closeafter scaling its highest since 22 July 2009 of $US973.20 an ounce on Tuesday. Goldfutures for April delivery on Comex were up $US3.90 at $US971.40 an ounce, after surgingto a seven-month high of $US974.90 on Tuesday.

In the currency market, the Japanese yen was quoted at 92.58 –60 against the USdollar.

The Hong Kong dollar was trading at HK$ 7.7555 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 the day weaker, as concerns about thehealth of eastern European banks had investors offloading risk-sensitive assets. TheAustralian dollar closed the day lower at US$0.6428, down from Tuesday's close ofUS$0.6428.

In Wellington trades, the New Zealand dollar ended the day at US50.69c from its previousclosing at US51.81c yesterday.

The Taiwan dollar continued to hover around the 5 –1/2 year low level as the U.S.dollar continued to strengthened for the 10th straight session The greenback closed theday at NT$ 34.620, up NT$0.340 from Tuesday's closing of NT$ 34.280. This set thelowest mark for the Taiwan dollar since August 2003.

The South Korean currency plunged to the lowest level in more than two months against theU.S. dollar as investors sold their assets here in pursuit of safer options amid growingconcerns over a fresh credit crisis. The South Korea won closed at 1,468 won to thegreenback, down 12.5 won from the previous session, the lowest level since 5 December2008. The currency has been on the decline for seven straight sessions, with its valuefalling about 14% against the dollar in 2009.

Coming back in Asian equities, the stock markets in Japan, China, Australia, New Zealand,South Korea, Malaysia, Philippines, and India closed the day on a lower while Hong Kong,Taiwan, Thailand, Indonesia and Singapore closed the day higher.

In Japan, the stock market plummeted with the Topix index witnessing its lowest close inalmost 25 years. Japan's Nikkei 225 Stock Average index plummeted 111.07 points, or1.45%, to 7,534.44, while the broader Topix declined 7.27 points or 0.96%, to 749.26.

On the economic front, Japan's coincident index that tracks the current state of theJapanese economy fell by 2.6% to 92.4 in December from 94.9 in November, as per thepreliminary figures released by the Cabinet Office on Wednesday. The composite index ofleading economic indicators sentiment was down 2.2% to 80.0 whereas the lagging indicatorsfell down 2.8% to 94.4 in December. The Cabinet Office maintained its assessment on thecoincident index, saying that the Japan's economy was worsening.

In Mainland China, stock market recorded their largest one-day drop this year in fallingvolume, as investors worried those large gains since 1 January 2009 couldn't be sustained.The benchmark Shanghai Composite Index fell 4.72%, or 109.58 points, to 2,209.86. TheShenzhen Component Index declined 4.46%, or 377.65 points, to 8,083.5.

On the economic front, China's fiscal revenue fell 17.1% in January from a year earlier to613.16 billion Yuan (89.77 billion U.S. dollars), the Ministry of Finance (MOF) said. Thecountry's tax revenue dropped by 16.7% from January 2008 to 563.9 billion Yuan last month.

In Hong Kong, the stock market posted its first gain in the week as investors went forshort covering after registering huge losses in the past two sessions. The Hang Seng Indexadded 70.60 points, or 0.55%, to 13,016, while the Hang Seng China Enterprise Index, whichtracks H shares of Chinese companies, increased by 19.21 points, or 0.27% to 7,212.54.

In economic news, Hong Kong's Census and Statistics Department said on Tuesday that thejobless rate stood at 4.6% in November 2008 to January 2009, up from 4.1% during theOctober to December period. At the same time, the underemployment rate increased 2.1%compared to the 1.9% in the previous month.

The number of unemployed persons grew 16, 400 to 157, 700 persons in January to Novemberperiod, compared with 141, 300 persons in October to December period. Total employmentdecreased 14,300 to 3.53 million in November to January, smaller than 3.54 million inOctober - December period.

Stock market in Australia continued to sink deeper, following a strong negative lead fromthe Wall Street. Financial and material sector took a big hit dragging the index lower.However surge in gold related stocks helped the index to cut short its losses. Thebenchmark S&P/ASX200 dropped by 51.10 points, or 1.50%, to 3,413.20, while the broaderAll Ordinaries fell 45.30 points, or 1.30%, to 3,412.20.

On the economic front, Australians kept shopping last quarter as government hand-outs andfalling interest rates boosted spending power, perhaps just enough to save the economyfrom an outright contraction. According to the data released by the Australian statisticalagency, the retail sales adjusted for inflation rose 0.8% in the fourth quarter to $53.5billion, the biggest increase in a year.

The Australian Bureau of Statistics also reported that merchandise imports fell in forJanuary by $2.86 billion to $17.261 billion from a downwardly revised $20.121 billion inDecember.

In other news, RBA assistant governor Malcolm Edey on Wednesday was hopeful Australiawould fare better than many other developed countries, thanks in part to aggressivemonetary and fiscal stimulus. In just six months the central bank has cut its key cashrate by 4% to a record low, by far the most aggressive easing since the recession of theearly 1990s.

In New Zealand, stock market plunged for the third consecutive session. The benchmarkNZX50 declined 1.93% or 51.617 points to close at 2621.005. The NZX 15 drowned 1.61% or79.169 points to 4852.519.

In South Korea as well the stock market fell for the third straight session, as growinganxiety about a global recession hurt investor sentiment. The weakening domestic currencyalso took its toll on the export stocks while deepening worries about European banks andon concerns that local banks may face potential dollar shortages dragged the bankingstocks lower.

The Korea Composite Stock Price Index fell 14 points or 1.24% closing the day at 1,133.19– another lowest finish since 23 January 2009 when market closed at 1,093.40 points.

On the economic front, South Korea's economy is slowing faster than expected as domesticdemand and exports slump amid a deepening global recession, the nation's top economicpolicymaker said today. In an effort to turn things around, the government will work hard"to save and create jobs through which it aims to bolster sagging domesticdemand," Finance Minister Yoon Jeung-hyun told the first crisis management meetingafter taking office last week.

Stock market in Taiwan snapped its two days of losing streak on Wednesday, 18 February2009, putting the first gain of the week, as tourism and technology and export stocks putup good gains. The gain was minimal as the investors awaited the economic growth data,which is expected to remain poor. The main Taiex share index ended slightly higher by 6.59points or 0.15% at 4,498.37.

In Philippines, the equities closed lower for the fourth consecutive day, as the grim moodin the global markets along with continuous fears on a weaker exports earning hurt thesentiments. The Philippine Stock Exchange index shed 7.67 points or 0.41% at 1,892.23. Theall shares index, meanwhile, lost 2.98 points or 0.24% at 1,228.66.

In India, key benchmark indices saw divergent trend in a highly volatile trading session.Weak global cues played the spoilsport pulling the market lower for third straight day.The BSE 30-share Sensex was down 19.82 points, or 0.22%, to 9,015.18. However the S&PCNX Nifty rose 5.65 points, or 0.20%, to 2,775.15.

Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.37% or 3.30 points to 895.23,while Indonesia's Jakarta composite increased by 12.57 points or 0.95% to 1,330.61.In Thailand, the Thai Stock exchange added 1.38 points or 0.31% to 439.60.

In other regional market, European shares declined on Wednesday for the third straightsession, as banks couldn't hold onto early gains and insurers and oil producers also fell.The U.K. FTSE 100 index lost 1% at 3,991.99, the German DAX 30 index fell 1% to 4,174.18and the French CAC-40 index declined 0.6% to 2,857.95