The markets across Asia open for trading on the first day of June ended in negative territory following weaker than expected manufacturing data in China, political crisis in Japan and weak cues from overseas futures market. Commodity related stocks were the major decliners. Lack of cues from overseas markets following holiday on the NYSE on Monday also impacted market sentiment as traders preferred to adopt a cautious approach.In Japan, the benchmark Nikkei 225 Index dropped 56.87 points, or 0.58%, to 9,712, while thebroader Topix index of all First Section issues was down 0.42 point, or 0.05%, at 880.
Cautious trading was witnessed during the session with most of the traders preferring to adopt a wait-and-watch attitude due to lack of overseas cues and the crisis in Euro region.
Shipping related stocks led the declines amid concerns about economic recovery following weaker than expected manufacturing data from China. Mitsui OSK Lines lost 1.70%, Nippon Yusen edged down 0.31% and Kawasaki Kishen Kaisa plunged 3.24%.
Non-ferrous metals were also among the decliners. SUMCO Corp. fell 2.42%, Sumitomo Metal Mining Co., lost 1.93%, Fujikura Ltd plunged 4.02%, Toho Zinc Ltd shed 2.70%, DOWA Holdings Co. slipped 1.84%, Mitsubishi declined 2.01% and Mitsui Mining & Smelting was down by 1.53%.
Trading companies also ended weaker on stronger local currency. Mitsui & Co. fell 1.70%, Toyota Tsusho lost 1.16%, Mitsubishi Corp. slipped 0.97%, Itochu Corp. declined 1.46% and Sumitomo Corp. was down 0.61%.
Automotive stocks also ended in negative territory with minor losses. Toyota Motor slipped 0.46%,Honda Motor edged down 0.22%, Isuzu Motors fell 3.19%, and Nissan Motor Co., fell 1.36%.
In Australia, the benchmark S&P/ASX200 Index slipped 16.60 points, or 0.37% and closed at 4,413, while the All-Ordinaries Index ended at 4,438, representing a loss of 16.90 points, or 0.38%.
On the economic front, the Reserve Bank of Australia left its key interest rate unchanged as expected. After hiking the rate for three successive months, the Board decided to retain the cash rate at 4.5%. With the high level of the terms of trade expected to add to incomes and demand, Australia's output growth over the coming year is likely to be about trend, even though the effects of earlier expansionary policy measures will be diminishing, Governor Glenn Stevens said in a statement. Stevens said inflation appears likely to be in the upper half of the target zone over the next year.
A report released by the Australian Bureau of Statistics revealed that retail sales in the country continued to increase in April, but at a slower pace. As per the report, retail sales rose a seasonally adjusted 0.6% on a monthly basis in April, slower than the 0.8% growth in the previous month. Economists had expected an increase of 0.3%. The retail trade turnover increased 0.9% on an annual basis in April, while the turnover fell 2.4% in original terms.
In a separate report, the Statistics Bureau revealed that approvals for dwelling units in the country decreased in April compared to the previous month. As per the report, the seasonally adjusted total dwelling units approvals dropped 14.8% on a monthly basis in April, in contrast to the 16.8% growth in the previous month, revised from 15.3% reported initially. Economists had expected a decline of 5%. Building approvals for private sector houses slipped 13.5% and private sector other dwellings fell 5.4%.A report released by the Australian Industry Group and PriceWaterhouseCoopers revealed that the performance of manufacturing index of PMI in the country fell 3.5 points, to 56.3 in May, suggesting a slowdown in the manufacturing sector. The easing in the overall manufacturing growth rate reflected slower, though still strong, growth in manufacturing production, combined with an easing to more moderate rates of growth in new orders, inventories and supplier deliveries.
Banks ended in negative territory with minor losses after the RBA decided to keep the interest rates unchanged, as widely anticipated. ANZ Bank slipped 0.04%, Commonwealth Bank of Australiashed 0.74%, National Australia Bank fell 1.18% and Westpac Banking lost 0.87%. Investment banker Macquarie Group also ended in negative territory with a loss of 1.55%.
Mining and metal stocks also ended weaker following unexpected decline in China manufacturing and domestic PMI data. BHP Billiton edged down 0.13%, Rio Tinto slipped 0.39%, Gindalbie Metals fell 2.80%, Macarthur Coal lost 2.10%, Mincor Resources declined 0.91%, Murchison Metals slumped 3.32% and Oz Minerals was down 1.40%.
Mixed trading was witnessed among oil related stocks Woodside Petroleum gained 1.49%, Santosrose 1.77%, Oil Search advanced 1.08% and Origin Energy increased 0.80%. However, ROC Oil Co. ended in negative territory with a loss of 1.41%.
Gold stocks ended in positive territory. Lihir Gold added 0.25% and Newcrest Mining rose 0.87%.
In Hong Kong, the benchmark Hang Sang Index ended in negative territory with a loss of 268.24 points, or 1.36%, at 19,497, taking cues from other markets in the region which were trading in negative territory on concerns about the sovereign debt crisis in the Euro region with Spain also joining the list of countries that were downgraded by rating agencies. Weaker than expected manufacturing data from mainland China also impacted market sentiment. Traders were cautious awaiting more cues from the US market which were closed for trading on Monday.
A sell-off across Asian and European markets amid concerns that a slowdown in China and Europe's efforts to reduce budget deficits may impede global economic recovery dragged the Indian market sharply lower on Tuesday after four sessions of gains. The 30-share Sensex average saw range-bound movement until the mid-session before plunging almost 4% on broad-based selling. However, the Sensex closed the session off the day's low at 16,572, down 373 points or 2.20% and the 50-share Nifty ended down 116 points or 2.28% at 4,970.
Among the other major markets open for trading, China's Shanghai Composite Index declined 23.86 points, or 0.92% to close at 2,568, Indonesia's Jakarta Composite Index fell 72.34 points, or 2.59% to close at 2,725, Singapore's Strait Times Index slipped 37.16 points, or 1.35% to close at 2,715 and Taiwan's Weighted Index plunged 84.65 points or 1.15% and closed at 7,289.
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