Mar 1, 2009

Asian Market continues to slide

17 Feb 2009 | 17:01 Asian Market continues to slide
Stock markets across the Asian region continued to remain subdued on Tuesday, 17February 2009, as investors remained cautious about how Wall Street will fared after itsMonday holiday. Investors were also waiting for details of further steps by the U.S.administration to shore up sentiment, with General Motors and Chrysler expected to detailtheir long-term recovery plans.

Stock markets on Wall Street were closed on Monday the account of President Day publicholiday.

In the commodity market, crude oil fell below $37 a barrel in New York on speculation adeepening recession in Europe and Asia will stifle demand for fuels.

Crude oil for March delivery traded at $37.10 a barrel, down 41 cents from the 13 February2009 close, in electronic trading on the New York Mercantile Exchange at 10:59 a.m. inLondon time. The March Nymex oil contract expires on 20 February 2009. The more activelytraded April contract was at $41.32 today, down 65 cents from last week's close.

Brent crude for April settlement gained 40 cents, or 0.40%, to $43.68 a barrel onLondon's ICE Futures Europe exchange at 10:59 a.m. in London time. It slumped 3.4%yesterday as the U.K.'s FTSE 100 Index fell to a two-week low, led by Lloyds BankPlc.

Spot gold breached $960 an ounce in today's session, reaching its highest level this year,lifted by an unusually strong performance during Asian hours amid heightened risk aversionand a sharp reversal in the Japanese yen's strength. Spot gold was recently up $20.90 at$963.10 an ounce.

In the currency market, the Japanese yen was quoted at 92.49 against the US dollar.

The Hong Kong dollar was trading at HK$ 7.7546 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 closed the day lower at US$0.6428, down fromMonday's close of US$0.6516.

In Wellington trades, the New Zealand dollar ended the day at US51.24c from its previousclosing at US51.93c yesterday.

The U.S. dollar was higher against the New Taiwan dollar in Taipei today. The greenbackclosed the day at NT$34.620, up NT$0.1740 from Monday's closing of NT$ 34.280. Thisset the lowest mark for the Taiwan dollar since August 2003.

The South Korean currency plunged 1.92% against the U.S. dollar on Tuesday as marketjitters escalated about local banks' dollar liquidity conditions. The local currencyclosed at 1,455.5 won to the greenback, down 28 won from the previous session's close,marking the sixth straight day of decline.

Coming back in Asian equities, the stock markets in Japan, China, Hong Kong, Australia,New Zealand, Taiwan, South Korea, Singapore, Malaysia, Philippines, Thailand, Indonesiaand India closed the day on a lower.

In Japan, stock market tumbled down to a near four-month low amid global cues as propertystocks that tumbled down dragged down the lower. The Nikkei 225 Stock Average indextumbled 104.66 points, or 1.35%, to 7,645.51, while the broader Topix lost 13.57 points,or 1.76%, to 756.53.

On the economic front, Japanese indices of tertiary industry activity in Decemberdecreased a seasonally adjusted 1.6% from the previous month to 106.0, according to thedata released by the ministry of economy.

In Mainland China, the stock market plunged by almost 3% as investors took profits fromprevious gains, and also reacted to falls in other Asian markets. The benchmark ShanghaiComposite Index fell 2.93%, or 69.95 points, to 2,319.44. The Shenzhen Component Indexdeclined 3.53%, or 309.89 points, to 8,461.16.

In Hong Kong, stock market tumbled on Tuesday, posting its biggest percentage drop in morethan five weeks, as investors remained cautious about the weakening global economicoutlook accompanied by worries about slowing corporate earnings and likely capitalraising. The Hang Seng Index dumped 510.48 points, or 3.79%, to 12,945.40, while the HangSeng China Enterprise Index, which tracks H shares of Chinese companies, declined by367.22 points, or 4.86% to 7,193.33.

In economic news, the Hong Kong Exchange Fund's foreign assets amounted to 1.272 trillionHK dollars i.e. US$ 164.21 billion in January, down HK$ 500 million or US$ 64.55 millionfrom December, the Monetary Authority of Hong Kong said yesterday.

The Monetary Base amounted to HK$ 541.5 billion or US$ 69.91 billion, comprisingCertificates of Indebtedness, Government-issued currency notes and coins in circulation,the aggregate balance of the banking system and Exchange Fund bills and notes issued.Claims on the private sector amounted to HK$ 160.1 billion or US$ 20.67 billion.

In other news, the population of the Hong Kong Special Administrative Region (HKSAR) roseto 7,008,900 at the end of 2008, topping 7 million for the first time, according tostatistics released Monday by the HKSAR government.

In Australia, stock market continued its losing streak for the second session, asinvestor's confidence remained subdued after Monday's negative leads from the marketsacross the Asia Pacific region and Europe. The benchmark S&P/ASX200 dropped by 52.60points, or 1.50%, to 3,464.30, while the broader All Ordinaries fell 49.10 points, or1.40%, to 3,412.20.

On the economic front, the Reserve Bank of Australia's board members believed that anyeconomic stimulus would have little effect in the short term but could spur growth laterin 2009.

The board also said that it detected noticeable improvements in financial and creditmarkets since November - but that the global economy will continue to have a negativeeffect on Australia for the time being.

Government data showed Australia's economy grew by just 0.1% in the third quarter of 2008,and is believed by to have slipped into recession in Q4. The RBA board membersoptimistically predict a flat reading, the minutes showed.

In New Zealand, share market fell again for the second time in a row. The benchmark NZX50was down 0.28% or 7.56 points to close at 2672.622. However, the NZX 15 inched up 0.19% or9.301 points to 4931.688.

In South Korea, stock market closed sharply lower touching the three weeks low, astechnology stocks lead the fall on a grim industry outlook, while banks were weighed downby the weaker won. Investor's confidence also remained dented for the second straightsession on concerns over worsening global economic conditions. Falls in European marketson Monday and a weaker yen weighed on investor sentiment.

The Korea Composite Stock Price Index slump 48.28 points or 4.11% closing the day at1,127.19 – the lowest finish since 23 January 2009 when market closed at 1,093.40points.

On the economic front, a report by the Ministry of Knowledge Economy showed that sales atSouth Korea's major discount outlets and department stores surged in January, fueledmainly by demand for groceries ahead of the Lunar New Year holiday. Total sales at thethree leading discount outlets jumped 16.8% on-year, a turnaround from the negative growthof 5.8% in the preceding month.

In other economic news, South Korea's terms of trade deteriorated to the lowest level in20 years in 2008 on a jump in oil and raw material costs, the Bank of Korea said Tuesday.The net terms-of-trade index for goods fell 13.8% on-year to 78.5 last year, according tothe Bank of Korea (BOK). The index declined to the lowest level since 1988 when the Bankof Korea began to compile related data.

In Singapore, the equities continued to ease today, with global cues continuing point to ableak scenario on the world economic front and poor exports data put considerable downsidepressure on the broad index. The benchmark STI Straits Times index ended the day at1,637.92 points, down 42.78 points or 2.55% from the previous close, pulled down sharplyin the second half of the day as selling in exporters intensified

In Philippines, the equities continued to lose ground, extending an array of weak outingoff late as weak global cues and a rise in the risk aversion pulled the market in red. Thebenchmark Philippine Stock Exchange index shed 15.89 points or 0.82 percent to close at1,899.90 while the all-share index dropped 10.47 points or 0.84 percent to 1,231.64.

In Taiwan, stock market closed the day lower, as stocks of leading DRAM makers slumpedeven after a bank consortium agreed to lend the struggling DRAM maker T$3 billion. Theinvestors also remained cautious about Taiwan's fourth-quarter economic data due torelease on tomorrow, after Japan posted its worst economic decline since 1974 in the finalquarter of 2008. The main Taiex share index ended lower by 99.48 points or 2.17% at4,491.78.

In India, disappointed with interim budget, the market fell close to 3% for the secondconsecutive session. The BSE 30-share Sensex fell 270.45 points, or 2.91%, to 9,035. TheS&P CNX Nifty dropped 78 points, or 2.74%, to 2770.50.

Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.29% or 2.65 points to 907.19,while Indonesia's Jakarta composite increased by 3.26 points or 0.24% to 1,342. InThailand, the Thai Stock exchange added 0.87 points or 0.20% to 446.64.

In other regional market, European shares hit a two-week low in morning trade on Tuesday,as banks slid on persistent concerns about their balance sheets and fears they might needmore state help, while weaker crude prices pressured oil stocks. On a regional level, theGerman DAX 30 index fell 1.6% to 4,296.13 and the French CAC-40 index declined 1.2% to2,926.50 while the U.K. FTSE 100 index lost 0.9% to 4,097.37