Asia Markets Report

Asian Markets Extend Losses On Euro Concerns

The markets across Asia, excluding India, ended in negative territory on Thursday at multi-month lows as risk aversion increased with investors preferring to offload shares amid lingering concerns about the debt crisis in Europe. The Indian market, however, ended in positive territory with a modest gain

In Japan, the benchmark Nikkei 225 Index closed down 1.5%, or 156.53 points, at 10,030, while the broader Topix index of all First Section issues fell 12.49 points, or 1.4%, to 898.

On the economic front, a preliminary report released by the Cabinet Office in Japan revealed that the country's gross domestic product added 1.2% in the first quarter of 2010 compared to the previous three months. Analysts expected the economy to report a growth of 1.4% for the quarter, following a revised 1% growth in the preceding fourth quarter of 2009. On an annualized basis, GDP was up 4.9% for the fourth straight quarter of gain - but again missing forecasts for a 5.5% increase after the revised 4.2% gain in the previous three months. Nominal GDP was up 1.2% on quarter versus expectations for a 1.3% rise after adding 0.3% in the previous quarter.

Exporters ended in negative territory on stronger local currency. Fanuc Ltd declined 2.85%, TDK Corp. plunged 3.75%, Tokyo Electron slumped 3.55%, Kyocera Corp., slipped 1.66%, Canon Inc. shed 2.67%, Advantest Corp. fell 2.89%, Panasonic Corp. was down 3.69% and Sony Corp. declined 1.55%.


Automotive stocks also ended weaker. Toyota Motor Corp. declined 2.56%, Honda Motor shed 2.98%, Suzuki Motor Co. plunged 3.77%, Nissan Motor Co. lost 2.65%, Isuzu Motors slumped 5.00% and Hino Motors slipped 2.05%.

Defensive shares found favor with traders as they shun risky assets amid concerns about the negative impact of eurozone crisis on global economic growth. Among the defensives, Tokyo Electric Power Co., edged up 0.04%, Kansai Electric Power Co., added 0.57% and Chubu Electric Power Co., advanced 0.42%.

In Australia, the benchmark S&P/ASX200 Index declined 70.60 points, or 1.61% and closed at 4,316, while the All-Ordinaries Index ended at 4,342, representing a loss of 71.90 points, or 1.63%.

On the economic front, a report released by the Australian Bureau of Statistics revealed that the average weekly wages in the country rose 5.8% on a yearly basis in February 2010, coming in at A$1,242.20. In the three months to February, the average weekly ordinary time earnings increased a seasonally adjusted 1.1%, compared to the 2.2% increase recorded in the previous three months period up to November, the report added. The average weekly earnings of all employees stood at A$968.10 in February, up 5.7% from a year ago.

In a separate report, the Melbourne Institute revealed that Australia's median consumer inflationary expectations slid to 3.6% in May from 4.1% in April. As per the report, the proportion of consumers expecting inflation to be within the RBA's 2-3% target range rose slightly in May, reaching 16.2% from 15.9%.

A statement released by the Reserve Bank of Australia revealed that the central bank sold a net A$350 million in the foreign exchange market in April, following the net sale of A$892 million in the previous month. The RBA further noted that it had bought a net A$369 million in the forex market from the government in April.

Banks led the declines on weaker local currency and concerns about the impact of European crisis on global economic growth. ANZ Bank fell 2.92%, Commonwealth Bank of Australia lost 2.55%,Macquarie Group slipped 1.74%, National Australia Bank shed 2.31% and Westpac Banking Corp. plunged 3.96%.


Mining and metal stocks also ended sharply weaker. BHP Billiton shed 0.60%, Rio Tinto slipped 1.00%, Fortescue Metals plunged 7.75%, Gindalbie Metals fell 3.06%, Iluka Resources lost 1.35%, Macarthur Coal slumped 7.83%, Murchison Metals was down by 8.21% and Oz Mineralsdeclined 1.97%.

Gold stocks plunged sharply following drop in gold prices in the international market. Lihir Gold fell 2.72% and Newcrest Mining lost 2.82%.

In Hong Kong, the benchmark Hang Sang Index ended in negative territory with a loss of 33.15 points or 0.17%, at 19,546, well off the lows as bargain hunting at lower levels in china related shares. A smart recovery in Wall Street in the previous session in late trading session, despite the indices ending in negative territory on lingering euro concerns, and positive trading in European markets in early session helped shares stage a smart recovery, even as concerns about the Euro continue to haunt investors.

Positive news on April exports, the successful completion of 3G auction process and the government's move to raise natural gas prices produced by state firms revived investor sentiment, helping the Indian market end on a firm note Thursday after the sell-off in the previous session. However, the benchmark indexes closed off the day's highs, as lingering worries regarding the future of the European Union and its currency continued to haunt investors. The 30-share Sensex rose as much as 210 points before paring its gain and ending up 111 points or 0.68% at 16,520, while the 50-share Nifty rose 28 points or 0.57% to 4,948.

Among the other major markets open for trading, China's Shanghai Composite Index lost 31.87 points, or 1.23%, to close at 2,556, Singapore's Strait Times Index slipped 21.03 points, or 0.76%, to close at 2,754, Indonesia's Jakarta Composite Index declined 35.24 points, or 1.29% to close at 2,694, and Taiwan's Weighted Index plunged 134.73 points or 1.77% to close at 7,424.