Asia Markets Report

Asian Markets Plunge On Euro Concerns

The markets across Asia plunged sharply and ended at multi-month lows on Wednesday as traders expressed fears about the impact the naked short selling ban imposed by Germany will have on the global markets. The sharp decline in commodity and oil prices coupled with a weaker euro, which is trading at a 4-year low, also impacted market sentiment.

In Japan, the benchmark Nikkei 225 Index declined 55.80 points, or 0.54%, to 10,187, while the broader Topix index of all First Section issues was down 3.27 points, or 0.36%, to 911.

On the economic front, a final report released by the Ministry of Economy, Trade and Industry revealed that industrial production in the country grew 1.2% in March compared to the previous month, revised upwards sharply from the preliminary report of a nominal 0.3% growth. On an annual basis, industrial production surged up 31.8%. The report further noted that shipments recorded a monthly increase of 2%, up from the initial estimate of 1.6%. At the same time, the decline in inventory was confirmed at 1.6%. On an annual basis, shipments climbed 29.9%, while inventory dropped 6%. Inventory ratio slipped 5.5% in March.

Separately, the Bank of Japan revealed that output prices in manufacturing industry increased 1.2% in April compared with the same month last year. The report noted that, on a month-over-month basis, manufacturing output prices increased 1.2% in April, faster than the 0.2% rise in the prior month.


Insurance stocks ended in negative territory. NKSJ Holdings fell 2.51%, MS & AD Insurance Holdings slipped 1.11%, T&D Holdings lost 1.70% and Tokio Marine Holdings shed 1.59%.

Securities stocks also ended weaker amid concerns about the ban imposed by Germany on naked short selling. Matsui Securities plunged 3.38%, Nomura Holdings shed 1.20%, Mizuho Securities slipped 0.80% and Daiwa Securities Group declined 0.48%.

Mixed trading was witnessed among automotive stocks. Toyota Motor declined 0.57%, Honda Motor slipped 0.83% and Suzuki Motor edged down 0.31%. Mitsubishi Motor remained unchanged from previous close. However, Hino Motors climbed 3.21%, Isuzu Motors soared 4.53% and Mazda Motor rose 2.03% on news that these stocks might be accumulated by the new Mutual Fund created by Nomura Asset Management Co. exclusively for car maker stocks.

In Australia, the benchmark S&P/ASX200 Index was down 83.60 points, or 1.87% to close at 4,387, while the All-Ordinaries Index ended at 4,414, representing a loss of 85.70 points, or 1.90%.On the economic front, results of a key survey conducted in the country revealed that the Westpac-Melbourne Institute consumer confidence index slid 7% to 108 in May from 116.1 recorded in the previous month. The survey was held after the release of the Federal Budget and the Reserve Bank of Australia's latest rate hike, and Westpac chief economist Bill Evans said both had a strong downward influence on consumer morale. Nevertheless, a reading above 100 means optimists outnumber pessimists.

In a separate report, it was revealed that wages in the country rose at the fastest pace in more than a year in the first three months of 2010. Data released by the Australian Bureau of Statistics revealed that wages grew a seasonally adjusted 0.9% between January and March compared to the preceding three months. That is slightly above analyst forecasts for a 0.8% increase and follows a 0.6% increase in the December quarter. It also marks the fastest rate of wage growth since the December quarter of 2008, when wages increased 1.2%.

A report released by the Department of Education, Employment and Workplace Relations revealed that job vacancies for skilled workers in the country increased a seasonally adjusted 4.4% month-on-month in May after the 6.2% fall in the previous month. On a yearly basis, the skilled vacancy index was up 25.6%, faster than the 12.8% increase in the preceding month.

Light sweet crude oil futures for June delivery ended at $68.15 a barrel in electronic trading, down $1.26 per barrel from previous close at $69.41 a barrel in New York on Tuesday.

Of the 200 stocks in the ASX/S&P 200 index, as many as 170 stocks declined as traders moved to sidelines amid increasing concerns about the global turmoil following debt crisis in Europe, with Euro down to a new 4-year low against the US dollar.


Banks led the declines with sharp losses. ANZ Bank fell 2.21%, Commonwealth Bank of Australia lost 2.39%, investment banker Macquarie Group shed 1.76%, National Australia Bank plunged 3.68% and Westpac Banking Group declined 2.91%.

Gold stocks also ended weaker after gold fell in the bullion market. Lihir Gold lost 1.94% and Newcrest Mining fell 1.95%.

Oil stocks also ended in negative territory following drop in crude oil prices. Woodside Petroleum lost 1.90%, Santos Ltd shed 2.97%, ROC Oil Co. plunged 7.50%, Oil Search fell 2.03% and Origin Energy slipped 1.23%.

Mining and metal stocks also ended lower on lower commodity prices in the international market. BHP Billiton slipped 0.73%, Rio Tinto lost fell 1.53%, Fortescue Metals plunged 4.68%, Gindalbie Metals slumped 5.77%, Iluka Resources slipped 1.33%, Murchison Metals was down by 8.02% and Oz Minerals declined 2.40%.

In Hong Kong, the benchmark Hang Sang Index ended in negative territory with a loss of 365.96 points, or 1.83% at 19,579, taking cues from other markets in the region which also ended at fresh multi-month lows on fresh concerns about Euro after Germany unexpectedly imposed ban on naked short selling with immediate effect in an effort to curb financial speculation. The euro declined to a new-four year low, and the commodities as well as oil plunged sharply lower. Aluminum Corporation of China or CHALCO plunged 5.89% while CNOOC shed 4.26%. As many as 39 of the 43 components in the index ended in negative territory.

A sell-off across global markets amid worries about proposals for tighter financial regulations from the United States to Germany hit Indian equities hard on Wednesday. Reeling under the global pressure, the benchmark 30-share Sensex opened weaker at 16,802 and moved in a range thereafter for a while before tumbling to end down 467 points or 2.77% at 16,408. The 50-share Nifty fell 147 points or 2.89% to 4,920.

Among the other major markets open for trading, China's Shanghai Composite Index declined 6.98 points, or 0.27%, to close at 2,588, Singapore's Strait Times Index shed 68.35 points, or 2.40%, to close at 2,766, Indonesia's Jakarta Composite Index plunged 104.70 points, or 3.69% to close at 2,729, and Taiwan's Weighted Index slipped 26.14 points or 0.34% to close at 7,559.