Asian Markets Extend Losses On Credit Concerns, Weak Commodity Prices The markets across Asia extended losses for the third day on Wednesday on lower commodity prices and fresh concerns about Dubai financial crisis as well as the downgrading of Greece's credit rating by Fitch. Japan's downward revision of Q3 GDP numbers also impacted market sentiment. In Japan, the benchmark Nikkei 225 Index fell 135.75 points, or 1.3%, to 10,005, while the broader Topixindex of all First Section issues declined 11.76 points, or 1.3%, to 885. On the economic front, final report released by the Cabinet Office revealed that Japan's gross domestic product expanded by just 0.3% in the third quarter of 2009 compared to the previous three months. That was well below analyst expectations for a 0.7% quarterly increase following the 1.2% expansion in last month's preliminary report. On an annual basis, GDP was up 1.3% - again missing expectations for a 2.8% increase after the preliminary report showed a 4.8% jump. Commodity-related stocks led the decline following weakness in commodity prices in the international market. Inpex Corp., engaged in oil production and exploration, declined 0.44%. Among other stocks,Showa Shell fell 3.47%, Nippon Oil Corp lost 2.60% and Nippon Mining Holdings slumped 3.64%. Trading companies ended in negative territory on lower commodity prices and stronger local currency.Mitsui & Co., declined 3.29%, Mitsubishi Corp. slipped 1.57%, Toyota Tsusho Corp. fell 2.17%, Sumitomo Corp. fell 2.84% and Itochu Corp. shed 1.98%.
Automotive stocks, except Suzuki Motors, ended in negative territory. Toyota Motor declined 1.33%, Honda Motor lost 2.14%, Hino Motors fell 3.80%, Isuzu Motors slumped 4.62% and Mitsubishi Motor slipped 0.74%. Suzuki Motor announced that it is in talks with German automaker Volkswagen for a business as well as capital tie-up. Following the news, the shares of Suzuki Motor surged up 3.49%. Banks ended in negative territory on fresh concerns about Dubai financial crisis and downgrading of Greece's credit rating. Sumitomo Mitsui Financial fell 2.66%, Resona Holdings lost 2.76%, Mizuho Financial declined 3.01% and Mitsubishi UFJ Financial slumped 5.17%. In Australia, the benchmark S&P/ASX200 Index lost 32.70 points, or 0.70% to close at 4,638, while the All-Ordinaries Index ended at 4,653, representing a loss of 33.80 points, or 0.72%. On the economic front, a report released by the Australian Bureau of Statistics revealed that the country recorded a seasonally adjusted trade deficit of A$2.38 billion in October, wider than economists expectation of a deficit of A$1.805 billion. In a separate statement, the Statistics Bureau revealed that the total number of home loans declined 1.4% during October, coming in at 63,865, compared to the previous month. Results of the Westpac-Melbourne Institute consumer sentiment index revealed that the index measuring consumer confidence in the country declined 3.8% month-on-month in December, posting a score of 113.8. Mining and metals stocks led the decline in the market following drop in commodity prices in the international market. BHP Billiton lost 1.22%, Rio Tinto fell 1.39%, Fortescue Metals declined 1.66%,Gindalbie Metals slipped 0.53%, Iluka Resources shed 1.38% and Oz Minerals decreased 2.48%. Gold stocks also ended weaker on lower bullion prices. Lihir Gold declined 2.38% and Newcrest Mining lost 1.62%. Among oil stocks, Woodside Petroleum fell 2.14%, Santos lost 2.59% and Oil Search declined 1.71%.Origin Energy, however, bucked the trend and ended in positive territory with a gain of 0.38%.
Mixed trading was witnessed among the retail stocks. David Jones added 0.37% and Wesfarmers advanced 0.59%. However, Harvey Norman declined 2.60%, JB Hi-Fi lost 0.39% and Woolworths fell 1.71%. Banks ended weaker. ANZ Bank fell 1.92%, Commonwealth Bank of Australia slipped 0.43% andWestpac Banking lost 1.09%. National Australia Bank, however, bucked the trend and ended in positive territory with a gain of 0.25%. In Hong Kong, the Hang Seng Index extended losses for the fourth consecutive session, and closed at 21,742, representing a loss of 318.76 points, or 1.44%, taking cues from Wall Street where the major averages ended lower on fresh financial concerns in Dubai, higher dollar and weaker commodity prices. Sharp downward revision in Japan's Q3 GDP numbers, profit taking and weak trading across other markets in the region also impacted market sentiment. Of the 42 components in the index, as many as 38 stocks ended in negative territory. In South Korea, the KOSPI Index managed to end in positive territory with a gain of 6.39 points, or 0.39% at 1,634, as institutional investors shrugged off concerns about Dubai financial crisis and downgrading of Greece's sovereign credit rating by Fitch. Nor the weaker commodity prices amid strength in dollar, as well as weaker closing on Wall Street in the previous session had any major impact in trading session characterized by relatively less volumes. Select buying interest at lower levels by institutional investors led the gains among blue-chip stocks. Heightened risk aversion among investors on account of the Dubai and Greece concerns and currency movements in the forex markets dragged the Indian market lower on Wednesday. Profit taking after a sharp spike in the previous session also contributed to the weakness. The BSE Sensex finished at 17,125, down 102 points or 0.59% and the S&P CNX Nifty fell 36 points or 0.70% to 5,112 Among other major markets in the region, China's Shanghai Composite Index fell 57.09 points, or 1.73% to close at 3,240, Singapore's Strait Times Index slipped 8.29 points, or 0.30%, to close at 2797, and Indonesia's Jakarta Composite Index edged down 2.59 points, or 0.10%, to close at 2,481. However,Taiwan's Weighted Index bucked the weak trend and ended in positive territory with a gain of 28.71 points, or 0.37%, at 7,797. | European Markets | After seeing some volatility in early trading on Wednesday, the major European markets are currently mixed. Currently, the French CAC 40 Index and German DAX Index are receding 0.05% and 0.02%, respectively, while the U.K.’s FTSE 100 Index is gaining 0.04%. In economic news, the U.K.’s Office of National Statistics reported that U.K.’s visible trade deficit widened to 7.1 billion pounds in October compared to a revised deficit of 6.9 billion pounds in the previous month. Economists had expected s smaller deficit of 6.85 billion pounds. A report released by the Germany’s Federal Statistical Office showed that Germany’s consumer price index rose 0.4% year-over-year in November compared to unchanged prices in October. The increase marked the first since June 2009. On a monthly basis, consumer prices fell 0.1% compared to the 0.1% increase in October. Separately, the statistical body said Germany’s trade surplus rose to 10.7 billion euros in October from a surplus of 10.4 billion euros in the previous month. In the year-ago period, the surplus was 16.7 billion euros. Meanwhile, the nation’s current account surplus was 11 billion euros compared to a surplus of 14.9 billion euros in the year-ago period. U.S. Economic News The Commerce Department is due to release its wholesale inventories report at 10 AM ET. Economists expect wholesale inventories at the end of November to show a 0.5% decline. The wholesale inventories report for September revealed a 0.7% month-over-month increase in wholesale sales. However, on a year-over-year basis, sales declined 15.2%. Wholesale inventories at the end of September were down 0.9% on a monthly basis and fell 16.6% compared to the previous year. The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended December 4th at 10:30 AM ET. Crude oil inventories rose by 2.1 million barrels to 339.9 million barrels in the week ended November 27th. Inventories were above the upper limit of the average range for this time of the year. Gasoline stockpiles climbed by 4 million barrels and were above the upper limit of the average range. While distillate inventories declined by 1.2 million barrels, they were still above the upper boundary of the average range. Refinery capacity utilization averaged 79.8% over the four weeks ended November 27th compared to 80.1% in the previous week. | Stocks in Focus | Texas Instruments (TXN) could see some activity after it said it expects fourth quarter revenues to come in at $2.90 billion to $3.02 billion compared to its previous guidance of $2.78 billion-$3.02 billion. The company forecast earnings per share of 47-51 cents per share, higher than its prior estimated range of 42-50 cents. Actel Corp. (ACTL) may be in focus after it announced that it expects its fourth quarter revenues to be up 2%-6% sequentially, unchanged from its previous guidance. However, the company said its gross margins are likely to come in above its previous guidance of 59%-60%. Dendreon (DNDN) is likely to see some weakness after it announced that it would offer 15 million shares in an underwritten public offering pursuant to an effective shelf registration statement. The company intends to use the net proceeds to fund expenditures in connection with the investment in its manufacturing facilities in Atlanta, Georgia and Orange County, California. JP Morgan Chase (JPM) is likely to move in reaction to an announcement from the Treasury that it will auction the stock warrants it received from the company as part of its TARP lending. The company had repaid its TARP loan in full in June, although it declined to repurchase the warrants. C&D Technologies (CHP) may also be in focus after it said its third quarter revenues fell to $91.2 million from the year-ago’s $93.82 million. The company reported a net loss of 13 cents per share compared to a net loss of 2 cents per share last year. Analysts estimated a loss of 7 cents per share on revenues of $87.80 million. Analysts’ estimates typically exclude one-time items. Photronics (PHTN) could move in reaction to its announcement that its fourth quarter sales fell 8.3% to $94.7 million. The company reported a pro forma net loss of 7 cents per share compared to pro forma net earnings of 1 cent per share last year. The consensus estimates called for a loss of 7 cents per share on revenues of $97.23 million. CKE Restaurants (CKR) receded in Tuesday’s after hours session after it reported third quarter earnings of 11 cents per share, which trailed the consensus estimate of 14 cents per share. Revenues declined 4% to $324.2 million, roughly in line with the $324 million consensus estimate. Meanwhile, Comtech Telecommunications (CMTL) may gain ground after it announced that its first quarter earnings fell to 30 cents per share from 80 cents per share in the year-ago period. Sales declined to $133.8 million from the year-ago’s $191.9 million. The consensus estimates called for earnings of 22 cents per share on revenues of $125.5 million. Cooper Cos. (COO) could see some activity after it reported fourth quarter earnings of 66 cents per share compared to 65 cents per share last year. Sales climbed 6% to $283.5 million. Analysts estimated earnings of 67 cents per share on revenues of $278.6 million. PepsiCo. (PEP) is likely to be in focus after it said it expects 2009 net revenues to rise 5% on a constant currency basis. The company also forecasty earnings per share growth of 5%-6%. Earlier, the company had guided earnings and sales to rise in the mid-to-high single digits. Additionally, the company revealed an agreement to distribute Dr. Pepper, Crush and Schweppes brands in the U.S. as well as several brands in Canada and Mexico. Separately, Dr. Pepper Snapple Group (DPS) said it would receive a one-time payment of $900 million from PepsiCo, as part of a distribution deal to sell some of the brands Pepsi’s bottlers sold in the U.S. Kellogg (K) may react to its announcement that it has promoted Ronald Dissinger, presently serving as the company’s CFO of North America and Europe, as its CFO, effective January 3rd. Dissinger will take over the position from John Bryant, who is currently serving as CFO and COO. | |
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