TM: Asian markets close lower as economic worries persist
The stocks markets across the Asia-Pacific region closed lower on Wednesday as weak earnings from financial firms, lower commodity prices and concerns about ailing U.S. automakers raised worries about a global economic slowdown. Europe's economic woes continued to deepen as Spain said its economy shrank 0.2% in the third quarter. Bucking the trend, the Chinese market surged more than 6% on bargain hunting following Tuesday's sharp losses. Oil prices fell below $54 a barrel in late Asian trading, ahead of the U.S. government's weekly oil inventory report.
oil was quoted at $53.70 a barrel, down $0.69. The contract for December delivery fell 56 cents to settle at $54.39 a barrel on Tuesday, its lowest level since January 2007.
U.S. stocks closed higher on Tuesday, pulling off a final-hour rebound, as Hewlett Packard's quarterly results offset negative sentiment generated by Citigroup's fall to a 13-year low on fears about widespread job cuts and weak economic data. The Dow closed up 151.2 points or 1.8% at 8,424.8, the Nasdaq gained 1.2 points or 0.1% to 1,483.3 and the S&P 500 advanced 8.4 points or 1.0% to 859.1.
In currency trading, the U.S. dollar held steady in the upper 96-yen levels in Tokyo, while the South Korean won finished stronger at 1,446.5 a dollar. The Australian dollar closed marginally lower at US$0.6447 and the kiwi ended the domestic session little changed at US$0.5502.
The Japanese stock market closed lower, extending its losses for a second straight trading session. The key Nikkei 225 index fell to a one-week closing low, hit by a stronger yen and fears that a bailout of U.S. automakers might not come through. Stocks got off to a firm start, taking their cue from Wall Street's gains overnight, but soon lost ground and ended in negative territory. The benchmark Nikkei 225 index closed down 55.2 points, or 0.7% at 8,273.2, recovering from the day's low of 8,115.7. The broader Topix Index of all First Section Issues shed 8.0 points or 1.0% to 834.1.
On the economic front, Japan's Ministry of Economy, Trade and Industry said that total industrial activity in Japan eased 0.1% in September compared to the previous month. That was in line with analyst expectations following a revised 1.7% monthly decline in August. On a quarterly basis, industrial activity fell 0.8% in the third quarter compared to the preceding second quarter.
Financials tumbled on Mitsubishi UFJ Financial Group's dismal results for the six months ended September and ongoing worries about the global financial sector. On Tuesday, Mitsubishi UFJ reported a 61% fall in its profit for the second quarter and reiterated its recently lowered full-year forecast. Mitsubishi UFJ Financial Group plunged 6.4%, Mizuho Financial Group tumbled 7.5%, and Sumitomo Mitsui Financial Group fell 7.9%. Mitsui Sumitomo Insurance fell 4.1% and T&D Holdings lost 2.8%. Top brokerage Nomura Holdings sank 11.6% and Daiwa Securities Group dropped 2.7%.
High tech shares were lower on worries about weak consumer spending stronger yen. Tokyo Electron fell 5.5%, TDK dropped 2.8%, and Advantest gave away 2.9% after the Philadelphia Semiconductor Index, or Soxx, fell 2% overnight.
Among exporters, Sony fell 2.8%, Canon slipped 0.4%, Honda Motor declined 1.0%, and Toyota closed unchanged. Nikon added 1.4%. Mazda slid 1.1% after U.S. automaker Ford Motor, the holder of a 33.4% stake in Mazda, said it has sold a 20% stake for about $540 million.
NTT DoCoMo climbed 1.3% after it said that it would partner with South Korean firm KT Freetel to develop a smart phone that features free software from Google.
Bucking the trend, Astellas Pharma jumped 4.7%, Shionogi surged 6.5%, and Eisai Co added 1.8%.
The South Korean stock market closed lower for the seventh straight session. The market opened weak and extended its losses as worsened U.S. economic indicators dented investor sentiment. Uncertainty about the future of the shipbuilding and construction sectors also dented investor sentiment. The benchmark Korea Composite Stock Price Index or KOSPI closed down 19.34 points or 1.9% at 1,016.8.
On the economic front, South Korea's corporate bankruptcies hit a three-year high in October as more manufacturers and service firms became insolvent amid tightening financial conditions, the central bank said. The number of business failures was 321 in October compared to 118 in the previous month. This is the highest monthly figure since March 2005 when the number reached 359.
Shipbuilders and construction shares led the decliners. Hyundai Heavy Industries fell 3.6% and leading builder Daewoo Engineering & Construction dropped 1.3%. Top steelmaker POSCO lost 1.5% and Doosan Heavy Industries plunged 3.7%.
However, tech exporters closed higher, reversing early losses. Market heavyweight Samsung Electronics rose 0.7% and LG Electronics climbed 1.5%.
The Chinese stock market rallied, despite weakness among the stock markets in the Asia-Pacific region. The key index closed above the psychologically important 2,000 mark, reversing most of Tuesday's losses. The benchmark Shanghai Composite Index jumped 115.0 points or 6.1% to close at 2,017.5 after fluctuating between 2,023.9 and 1,883.8. Brokerages, insurers and property developers led the stocks higher.
Among insurers, China Life Insurance jumped 6.1% and rival Ping An Insurance advanced 4.6%. CITIC Securities surged 6.4%, Changjiang Securities soared 7.1%, Guoyuan Securities gained 6.7% and Haitong Securities climbed 3.8%. In the real estate sector, China Vanke rose 5.7%, Gemdale surged by the daily limit of 10% and COFCO Property added 5.1%.
Market heavy weight PetroChina lost 4.6%, but oil refiner Sinopec rallied 7.5%. In the airline sector, Air China added 3.8%, China Eastern Airlines rocketed 9.9% and China Southern Airlines gained 3.1%.
The Hong Kong stock market closed lower, as traders cashed in on early sharp gains in oil refiners and after Chinese banks fell for a second day. Telecom equipment makers and service providers outperformed after China Mobile confirmed that it had awarded contracts worth $4 billion towards building the second phase of the country's third generation network. The benchmark Hang Seng index closed down 100.1 points or 0.8% at 12,815.8 after rising up to 13,179.3 earlier in the day.
HSBC Holdings closed up 2.1% after falling 3.6% on Tuesday following a target price reduction by Goldman Sachs. Sinopec which rallied more than 9% earlier in the day, finished up 2.8% on talk that China was moving to a more market-based fuel pricing mechanism.
The China Enterprises Index of top locally listed mainland Chinese firms fell 1.7% to 6,489.1, as investors shrugged off a 6.1% rally on the Shanghai bourse.
China Construction Bank slid 3.4%, extending its losses in the previous session, after Bank of America said it would increase its holding in the bank at a discount to its current trading price. Top lender ICBC dropped 3.1% and Bank of China fell 1.9%.
The Australian stock market closed lower for the third straight trading session after starting off higher on the back of Wall Street's gains overnight. According to market analysts, resumption of short selling in non-financial stocks and Westpac-Melbourne Institute's index showing a downbeat economic outlook contributed to the weakness in the market. The benchmark S&P/ASX 200 index closed down 23.6 points or 0.7% at 3,499.6 and the broader All Ordinaries index shed 29.9 points or 0.9% to 3,483.2. On the Sydney Futures Exchange, the December share price index futures contract was down 22 points at 3,529.
The Westpac-Melbourne Institute index of economic activity, which indicates the likely pace of growth, three to nine months into the future, came in at 1.1% for September, down from 3.5% in August. This marked the index's biggest drop since the mid 1980s.
Meanwhile, the Australian Bureau of Statistics reported that new motor vehicle sales in Australia fell a seasonally adjusted 0.5% to 80,366 units in October following a revised 0.4% monthly decline in September. On an annual basis, new vehicle sales fell 10.6% after a revised 8.6% decline in September.
Among banks, ANZ surged up 6.0%, Commonwealth Bank and National Australia Bank gained 2.8% each, and Westpac jumped 4.5%. Investment bank Macquarie Group climbed 4.8%.
In the resources sector, index leader BHP Billiton plunged 4.1% and its takeover target Rio Tinto dropped 3.1%. Energy stocks were mixed following an overnight fall in oil prices. Woodside Petroleum lost 3.0% and Oil Search shed 3.1%, while Santos advanced 0.6%. Gold miners were mixed after the price of gold fell in Sydney. Newcrest Mining slipped 0.2% and Lihir Gold plummeted 3.4%, but Newmont Mining gained rose 1.4%.
Wheat exporter and agricultural services group AWB soared 6.9% after the company reported a 1375 jump in annual profit. The company said that it benefited from strong demand for fertilizer, seeds and farm chemicals as drought conditions eased.
Babcock & Brown plunged 19.4% after the company said that it has decided to transform itself into a specialist infrastructure business and sell its remaining assets and operations to raise funds to pay down debt.
Gaming firm Tatts Group lost 1.6% despite the company saying that it expects a lift in earnings for the first half of this financial year and flagged growth opportunities outside the gambling realm.
The New Zealand stock market closed lower for the third consecutive day. After opening higher, the market slipped into negative territory in the afternoon session on the back of weakness among other markets in the region. The benchmark NZX 50 index closed down 8.3 points or 0.3% at 2,706.3 and the broader NZX All Capital index shed 10.6 points or 0.4% to close at 2,750.9.
On the economic front, Statistics New Zealand reported that producer prices were higher in the third quarter of 2008. Output prices rose by 2.8% and input prices climbed 3.7% in the quarter, with the fuel-wholesaling sector contributing the most to the advances in both the indices.
Among market leaders, Telecom rose 0.4%, but Contract Energy dropped 0.7% and Fletcher Building eased 0.4%.
Air New Zealand fell 2.2% after the company said that it would cut 200 jobs.
In the retail space, The Warehouse Group closed flat, giving away early gains. Hallenstein Glasson shed 2.2% and Pumpkin Patch plunged 4.3%.
Fisher & Paykel Healthcare fell 1.3% and Sanford lost 2.2%, AMP dropped 0.8%, Tourism Holdings plummeted 3.9%, Rakon gave away 1.9%, SkyCity slipped 0.7%, and Mainfreight tumbled 5.9%.
Among gainers, Nuplex rose 0.8%, NZX gained 0.9%, New Zealand Oil and Gas climbed 1.7%, and ANZ jumped 6.1%.
Other Asian markets:
Taiwan's Taiex closed down 0.5% at 4,284; Singapore's STI closed down 1.6% at 1,665; Indonesia's Jakarta Composite Index closed down 0.8% at 1,180; Malaysia's KLCI closed down 5.4 points at 877; and India's Sensex fell 1.8% to 8,773 (provisional).
