Shanghai slump by 5.8% while Hang Seng, Sensex hovers around 4% loss
Stock market in Asian region managed a minus closing on Monday, 17 August 2009, after a further deterioration in US consumer confidence cast doubts about the pace of the global economic recovery and soured appetite for risky assets. With investors choosing to tread a cautious path and looking to cash in on recent strong gains, stocks cutting across various sectors are feeling the heat in the Asian markets. The disappointing GDP figures from Japan also weighed on the markets as well.
On Wall Street, stocks gave up ground Friday, despite a half-hearted late-day comeback, after data showed an unexpected dip in consumer confidence in August. The Dow Jones Industrial Average, which dipped more than 150 points earlier in the day, ultimately gave up 76.79 points, or 0.8%, to 9,321.40, while the S&P 500 slid 8.64 points, or 0.9%, to 1004.09. The Nasdaq Composite fell 23.83 points, or 1.2%, to 1985.52. The indices logged their first down week in five, with the Dow down 0.5%, the S&P 500 off by 0.6%, and the Nasdaq lower by 0.7% in the five-day session.
In the commodity market, crude oil fell to the lowest in more than two weeks after a report last week showed an unexpected decline in consumer confidence in the U.S. economy.
Crude oil for September delivery fell as much as $1.82, or 2.7%, to $65.69 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the lowest since 31 July 2009. It was at $66.12 at 10:01 a.m. London time. The contract had plunged 4.3% on 14 August 2009 after the U.S. consumer sentiment index fell to a five-month low.
Brent crude oil for October settlement declined as much as 2.5% on London’s ICE Futures Europe exchange and was down $1.31, or 1.8%, at $70.13 a barrel at 10:02 a.m.
Gold fell to the lowest price this month in London as the dollar strengthened, curbing the metal’s appeal as an alternative investment. Immediate-delivery bullion slipped as much as $10.67, or 1.1%, to $937.88 an ounce, the lowest price since July 31. It traded at $939.60 at 9:26 a.m. in London.
In the currency market, the Japanese yen edge higher against major currencies after Japan’s economic growth missed estimates and US regulators closed five lenders, boosting demand for safe-haven assets. The Japanese yen was quoted at 94.54 per greenback as investors withdrew from riskier assets. Japan’s currency rose to 133.79 per euro.
The Hong Kong dollar was trading at HK$ 7.7506 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.
In Sydney trade, the Australian dollar dropped more than two US cents as risk averse investors sold out of the currency amid falls on local and regional equity markets. At the local close, the dollar was trading at $US0.8214, down 2.14 US cents - or 2.5 per cent - from Friday's close of $US0.8427.
The dollar started the local trading week below $US0.8300 after a poor consumer sentiment survey and weak retail sales figures in the US resulted in a fresh bout of risk aversion and a negative finish on Wall Street.
In Wellington trade, the New Zealand dollar fell today from 11-month highs set last week as investors again became more averse to risk. At the closing, the NZ dollar was at US 66.89 cents, down from US 67.87 cents at the same time on Friday. On Friday night the NZ dollar peaked at US 68.86 cents, its highest level since 29 September 2008.
The South Korean won ended at 1,256.9 won to the U.S. dollar, down 17.7 won from Friday's close as investors reduced appetites for emerging currencies on weak U.S. economic data.
The Taiwan dollar weakened against the greenback. The Taiwan dollar fell against the US dollar as it was trading lower at NT$ 32.9760, down by NT$ 0.0810 from Friday’s close of NT$32.8950.
Coming back in equities, Shanghai stocks suffering their biggest percentage drop so far this year while Hong Kong shares were also weighted down by the performance as well as a steep fall in U.S. stock futures and commodity prices.
In Japan, shares market plummeted with benchmark indices eased from 10-month high on broad based sell off as profit takers took money after weak finish of Wall Street and commodity prices. Disappointing US consumer confidence reports further fueling the decline as it aggravated doubts in the recovery's strength, overshadowing news that Japan's economy climbed out of its recession last quarter. Exporters were dragged down by the yen's strength as risk-averse investors bought the low-yielding currency in search of a perceived safe haven.
At the closing bell, the Nikkei 225 Stock Average index tumbled 328.72 points, or 3.1% to 10,268.61, meanwhile the broader Topix index dropped 23.98 points, or 2.46% to 949.59.
On the economic front, the Cabinet Office said in a statement that Gross domestic product expanded at an annual 3.7% pace in the three months ended June 30, following an 11.7% decline in the previous quarter, as a revival in exports and consumer spending helped the country climb out of its worst postwar recession
The Federation of Electric Power Companies of Japan said Japan's 10 utilities generated 10.6% less electricity in July to 84.10 billion kilowatt-hours from the same month a year earlier.
