Stock markets in Asian region extended their fall over weekend by ending mildly loweron Monday, 25 January 2010, as investors indulge in selling once again on the back of asharp decline on Wall Street on Friday amid renewed worries about an economic recoveryfollowing the U.S. government proposing some stricter rules for the financial sector.
Investors were finding it difficult shrugging off concerns over possible U.S. bankrestrictions, as well as monetary tightening in China. Those worries dragged U.S. sharessharply lower Friday, as the Dow Jones Industrial Average recorded its biggest one-daydrop since 30 October 2009.
On Wall Street, stocks finished sharply lower Friday, weighed down by slumping tech andfinancial shares and uncertainty over the Obama administration's increasingly hostileapproach toward Wall Street and China's economic policy. The Dow Jones Industrial Averagetumbled 217 points, or 2.1%, to 10,173. The S&P 500 shed 25 points, or 2.2%, to 1092,as the Nasdaq fell 60 points, or 2.7%, to 2205.
The third straight day of declines dragged the blue-chip average down to its worst weeklyperformance in nearly a year. The Dow plunged 4.1% since last Friday. The S&P 500 slid3.9% for the week, as the Nasdaq dropped 3.6%.
In the commodity market, crude oil traded near a one-month low as sliding equity marketsand expectations of interest-rate increases in China dented investor confidence in thestrength of the global economic recovery.
Crude oil for March delivery was at $74.51 a barrel, down 3 cents, in after-hourselectronic trading on the New York Mercantile Exchange at 3:44 p.m. in Singapore. Earlierthe contract fell as much as 43 cents, or 0.6%, to $74.11. It dropped 2% to $74.54 on 22January 2010, the lowest settlement since 22 December 2009.
Brent oil for March settlement was at $72.94 a barrel, up 11 cents, on the London-basedICE Futures Europe exchange at 3:45 p.m. Singapore time. It fell 2.4% to $72.83 on 22January 2010.
Gold climbed for the first time in four days in London on speculation that a weaker dollarand the lowest prices in a month will boost bullion’s appeal as an alternative asset.Gold for immediate delivery added $7.48, or 0.7%, to $1,100.68 an ounce at 9:45 a.m.London time. Gold for February delivery was 1% higher at $1,100.50 on the New YorkMercantile Exchange’s Comex division.
In the currency market, US dollar and yen retreat mildly as the situation for Fed chairmanBernanke to win the vote for second term became more optimistic over the weekend.
The Japanese yen dropped against major currencies on Monday on prospects Federal ReserveChairman Ben S. Bernanke will win a second term and continue recovery policies in theworld’s biggest economy. Japan’s currency was quoted at 90.10 per US dollar onMonday from Friday’s quote at Y89.92 per dollar in New York.
The Hong Kong dollar was trading at HK$ 7.7674 against the dollar. Actually the Hong Kongdollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85to the U.S. dollar.
In Sydney trades, the Australian dollar steadied against the US dollar on Monday, butuncertainty in offshore markets is likely to weigh on the local currency in the near-term.At the local close, the dollar was trading at $US0.9061, up from $US0.9031 on Friday, withtrading limited ahead of the Australia Day holiday.
In Wellington trades, the New Zealand dollar bounced back this afternoon, after fallingagainst the greenback as the US market was affected by US President Barack Obama’splan to curb bank risk-taking. The NZ dollar also lost ground on the wake of uncertaintyabout the future of Federal Reserve chairman Ben Bernanke, which also took a toll on USmarkets. But the Kiwi dollar was buying US 71.49 cents around 5 pm higher than the US70.95 cents this morning and US 71.30 cents at 5pm Friday.
The South Korean won closed at 1150 won to the greenback, up from Friday 1151 won.
The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higheragainst the US dollar at NT$ 31.9700, 0.0100 up from Friday’s close of NT$31.9800.
In equities, Asian stock markets were lower Monday, with financial shares particularlyweak as investors remained risk averse following sharp losses on Wall Street Friday.
In Japan, the share market has ended the day in the red on Monday, but well off morninglows, supported by bouncing domestic currencies to lower 90 yen level and late hourbargain hunting after a plunge the previous trading day on uncertainty over the Obamaadministration's.
Concerns about US President Obama’s plan to limit the size and scope of US financialinstitutions weighed down banks and financials, while slide in commodity prices pressuredon energy and metal shares. Resources and brokerage were particularly weak with fallingcommodity metal and oil prices. The dollar's resilience against the yen helped trimlosses. The dollar held above the psychologically key Y90 level for most of the session,buoyed up export related shares.
At the end of Monday trade, the Nikkei 225 Stock Average index was at 10,512.7, dropped77.86 points or 0.74%, while the broader Topix of all First Section issues on the TokyoStock Exchange fell 6.35 points, or 0.67%, to 934.59.
In Mainland China, the stock index got hammered by worries about the US economy followingthe worst three-day slump on Wall Street in 10 months, retreat in commodity prices, andtightening lending conditions. Cautious over early withdrawal of government stimuluspackages to prevent the world’s fastest-growing major economy from overheatingtriggered selling across major heavyweights, with financials and materials led thedecline.
At the end of Monday’s trade, the Shanghai Composite Index, measuring A shares and Bshares on the Shanghai Stock Exchange, dropped 34.18 points, or 1.09%, to 3,094.41, whilethe Shenzhen Component Index on the smaller Shenzhen Stock Exchange dived 125.75 points,or 1%, to 12,470.19. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen,dropped 1.13%, to 3,328.01.
In Hong Kong, the stock market tumbled to its lowest level in three month on trackingregional weakness after Wall Street Friday triple digit slumps on uncertainty over theObama administrations and fall in commodities. Meanwhile declines were also fueled byrenewed worries about fundraising by other lenders after Bank of China plan to raisecapital as much as 40 billion Yuan to bolster its capital.
At the end of Monday’s session, the Hang Seng Index dropped 127.63 points, or 0.62%,to 20,598.55, while the Hang Seng China Enterprise, which tracks the overall performanceof 43 Mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, shrank117.19 points, or 0.98%, to 11,858.46.
In Australia, the shares stretching losses to a third straight session as investorsentiment battered by continued falls on Wall Street Friday on renewed concerns over theUS economy, retreat in commodity prices, and tightening lending conditions in China. Atthe closing bell, the benchmark S&P/ASX200 index dropped 32.70 points, or 0.69%, to4,717.9, meanwhile the broader All Ordinaries dived 28.80 points, or 0.6%, to 4,743.10.
In New Zealand, the share market drifted south in today trading as the fallout from twodays of falls on Wall Street continued to affect the global market. At the closing today,the NZX 50 inched lower by 0.06% or 1.77 points to 3188.66. Meanwhile, the NZX 15 added0.01% or 0.68 points to close at 5748.88.
In South Korea, stocks closed lower Monday as a U.S. plan to tighten bank regulationscaused local bank shares to plunge. The benchmark Korea Composite Stock Price Index(KOSPI) dropped 14.15 points to end at 1,670.2.
In Singapore, the share market was lower with financial shares particularly weak asinvestors remained risk aversion following sharp losses on Wall Street Friday on renewedconcerns about the global economy, but bargain hunting after a plunge the previous tradingday limited losses. Banks and properties tumbled as US proposals to curb excessiverisk-taking by banks, meanwhile falling commodities prices took toll on manufacturing andmulti-industries shares. At the end of Monday’s trade, the blue chip Straits TimesIndex was at 2,811.71, shed 8 points or 0.28%.
On the economic front, the Department of Statistics said in a statement in Singapore todaythat the consumer price index in December was unchanged from a year earlier, after falling0.2% in November. Singapore’s consumer price index dipped 0.5% in December 2009 overNovember 2009. This was due mainly to lower costs of housing and transport &communication.
In Taiwan, stock market tumbled to a fresh one month low as major technology exporterseased in the wake of losses on Wall Street on fears of U.S. government restrictions onbanks. The benchmark Taiex share index extended loses to sixth straight session, as theindex finished lower by 54.32 points or 0.69% at 7872.99, the lowest closing since 22December 2009 when market finished at 7856.
In Philippines, the stock market closed lower, with investors continuing to be largelyguided by overseas developments. Investors monitored developments on the Obama plan andChina’s tightening as they have the potential of stalling global economic recovery.Moreover, NG’s budget deficit and speculation of a “possible” key rateadjustment from the Monetary Board of the Bangko Sentral ng Pilipinas continued to be asource of concern for the market players. At the concluding bell, the benchmark index PSEilost 1.83% or 55.51 points to 2,967.96, while the All Shares index tumbled 0.93% or 17.86points to 1,889.03.
In India, selling pressure in late trade following disappointing earnings from auto majorMahindra & Mahindra (M&M) derailed a sharp pullback on the bourses. As a result,key benchmark indices extended losses for the fifth straight session with weak global cuesplaying the spoilsport. High volatility was the hallmark of the day's trading session. TheBSE 30-share Sensex was down 79.22 points or 0.47% to 16,780.46. The S&P CNX Nifty wasdown 28.10 points or 0.56% to 5007.90.
Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly lower at 1296.79while stock markets in Indonesia’s Jakarta Composite index fell by 12.48 pointsending the day higher at 2597.86.
In other regional market, European shares moved off their worst levels on Monday, helpedby gains for banks and miners. The U.K. FTSE 100 index rose 0.3% to 5,317.22, the FrenchCAC-40 index traded flat at 3,821.51 while the German DAX index declined 0.3% to 5,676.39.
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