Stock markets in Asian region fell further to near five month low on Friday, 5 February2010, as investors dumped riskier assets after rising sovereign debt problems in the eurozone and poor jobs data sent US and European stocks tumbling.
On Wall Street, stocks nosedived and closed near their lows Thursday, pressured by globaldebt fears and labor market uncertainty ahead of Friday's government jobs report. The DowJones Industrial Average plunged 268 points, or 2.6%, to 10,002. The S&P 500 lost 34points, or 3.1%, to 1063 and the Nasdaq stumbled by 65 points, or 3%, at 2125.
On the economic front, the Labor Department said initial jobless claims rose by 8,000 to480,000 in the final week of January. In other economic news, the Labor Department alsosaid U.S. nonfarm productivity in the fourth quarter rose at a swifter-than-expected paceof 6.2%. Unit labor costs, meanwhile, fell 4.4% in the fourth quarter. The figure, whichis watched as a measure of inflation and profit margins, was expected to decline only2.5%. In separate release from the Census Bureau showed the factory orders growing at 1%in December.
In the commodity market, crude oil traded near $73 a barrel after falling yesterday as anincrease in U.S. jobless claims raised concern fuel consumption may be slow to recover anda stronger dollar reduced demand for commodities.
Crude oil for March delivery was at $73.46 a barrel, up 32 cents, in electronic trading onthe New York Mercantile Exchange at 3:18 p.m. Singapore time. It earlier fell as much as33 cents, or 0.5 percent, to $72.81 a barrel.
Brent oil for March settlement was at $72.26 a barrel, up 13 cents, on the London-basedICE Futures Europe exchange at 3:19 p.m. Singapore time. It earlier fell as much as 50cents, or 0.7 percent, to $71.63 a barrel. The contract declined $3.79, or 5 percent, tosettle at $72.13 a barrel yesterday.
Gold fell to a three-month low in London as the dollar’s rally cut bullion’sappeal as an alternative investment. Gold for immediate delivery fell as much as $14.13,or 1.3 percent, to $1,049.57 an ounce and traded at $1,056.22 at 9:42 a.m. London time.
In the currency market, the US dollar rose in Asian trading Friday ahead of a key U.S.jobs report later in the session, getting a lift from safety-seeking investors as Asianequities markets sold off.
The Japanese yen softened slightly in afternoon trade against its major counterparts aftersurging up yesterday on growing concerns over the global economy. The unexpected rise inU.S. jobless benefit claims and growing fears about the sovereign debt crisis in Greeceand other parts of Europe pushed the yen up sharply yesterday. Japan’s currency yenwas quoted at 89.49 against the greenback.
The Hong Kong dollar was trading at HK$ 7.7718 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 Aussie dollar fell to multi-month lows today as investors frettedabout sovereign debt problems in Europe amid concerns strained budgets could force fiscalretrenchment in many developed nations. The Aussie hit a 4-month low at $0.8639, sheddingtwo US cents overnight as risk appetite collapsed on worries about the health of theglobal economy. At the local close, the dollar was buying $0.867 US cents. The 2.1% dropagainst the US dollar was the biggest daily slide in over seven months.
In Wellington trades, the New Zealand dollar had a volatile session reacting to offshoremarkets after taking a pounding yesterday from worse-than-expected unemploymentstatistics. Investors were increasingly worried about the levels of sovereign, orgovernment debt, in Europe. They were seen dumping shares and non-US dollar currencies.Non-farm payroll data due in the US tonight adds another uncertainty to the mix. The NZdollar was US 69.01 cents at 5 pm from US68.83c at 8 am and US 69.80 cents at 5 pmyesterday. It fell to a five-month low of US 68.45 cents on Thursday night and spenttoday's session between around US 69 cents and US 68.58 cents.
The South Korean won declined 1.62% against the U.S. dollar Friday as fears aboutballooning budget deficits in the euro-zone sparked a flight to safer assets. The SouthKorean won ended at 1,169.90 won to the greenback, down 19 won from Thursday’s closeafter the global concerns sent investors to flee to the safety of the U.S. currency. TheKorean unit fell to as low as 1,177.50 won at one point, but its losses were trimmed laterdue to exporters' sale of the greenback.
The Taiwan dollar weakened against the greenback. The Taiwan dollar was trading loweragainst the US dollar at NT$ 32.0670, 0.0470 down from Thursday’s close of NT$32.0200
In equities, Asian equity markets tumbled Friday as heavy losses on Wall Street andheightened concerns over European sovereign debt prompted a sell-off across sectors.
In Japan, the share market tumbled to 7-week low, barely clinging to the 10,000 line,suffered by steep losses in Wall Street overnight on disappointing US jobs figures,escalating debt jitters in Europe, and a sharply strengthening yen. The Nikkei indexstumbled 1.38% or 140.95 points in a week. At the closing bell, the Nikkei 225 StockAverage index was at 10,057.09, tumbled 298.89 points or 2.89%, after touching an intradaylow of 10,036.33. The broader Topix of all First Section issues on the Tokyo StockExchange slumped 19.31 points, or 2.12%, to 891.78.
In Mainland China, the stock market tumbled with key indices breached the 3,000 line fisttime since 30 October 2009, as investors abandoned riskier assets in a wake of tripledigit slumps in Wall Street overnight on disappointing US jobs data and escalating debtjitters in Europe.
The benchmark Shanghai index registered weekly decline of 1.7% or 49.9 points. At theclosing bell, the Shanghai Composite Index, measuring A shares and B shares on theShanghai Stock Exchange, tumbled 55.91 points, or 1.87%, to 2,939.40, while the ShenzhenComponent Index on the smaller Shenzhen Stock Exchange slipped 252.34 points, or 2.07%, to11,917.14. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, sank 2.04%, to3,153.09.
On the economic front, China’s current-account surplus, the broadest measure of itstrade balance, fell sharply in 2009, according to preliminary estimates by the StateAdministration of Foreign Exchange. The current-account surplus dropped to $284.1 billion,as compared surplus of $426.1 billion for 2008. The Ministry of Commerce Friday imposedpreliminary duties of as much as 105.4% on US chicken products, saying the imports arehurting the domestic poultry industry.
In Hong Kong, the key benchmark indices fell on Friday, joining a global stock marketrout, as broad based selling across the sector amid risk aversion after global marketsplunged overnight on renewed concerns over global economic uncertainties. Selling was alsointensified after unexpected rise in US jobless claims, cautious over Greece and otherEuropean nation’s debts, and sharp fall in commodity prices. The Hang Seng Indextumbled 676.56 points, or 3.33%, to 19,655.08, while the Hang Seng China Enterprise, whichtracks the overall performance of 43 Mainland Chinese state-owned enterprises on the HongKong Stock Exchange, shrank 474.10 points, or 4.08%, to 11,131.78.
In Australia, the index fell sharply, ending a fourth consecutive week of losses on heavyselling across the sectors, hurt by falls in offshore markets and weaker commodity prices.Market participants pulling out money from risky asset after European and US share-marketsplunged into the red overnight on concerns about the financial health of the Euro zone andunexpected rise in US jobless claim. The All Ordinaries registered weekly declines of 1.4%or 64.40 points. At the closing bell, the benchmark S&P/ASX200 index fell 107.50points, or 2.33%, to 4,514.10, meanwhile the broader All Ordinaries shrank 111.60 points,or 2.4%, to 4,532.50.
On the economic front, the RBA issued its quarterly Monetary Policy Statement Friday inSydney, saying that if the forecasts materialize, more interest rate hikes are possible.The RBA predicted modest increases in inflation and gross domestic product, along with amoderation in joblessness. The central bank forecasts underlying inflation will ease fromabout 3.25% through 2009 to 3% by mid 2010 and 2.5% by the end of 2010 before rising to2.75% by the end of 2011 and into 2012. The bank previously forecast 2.25% inflation bythe end of 2010.Gross domestic product is forecast to rise by 3.25% through 2010 and 3.5%through 2011.
In New Zealand, equities ended deep in the negative region on the last trading day of theweek after inching up slightly yesterday despite loses in international markets. NewZealand benchmark index dipped sharply on Friday by almost 1.5%, reaching close to 3100;near its mid December 2009 lows after achieving a level close to 3300, early this year. NZshares remained dull throughout the week except for edging forward yesterday. At theclosing today, the NZX 50 lost 1.40% or 43.95 points to 3104.99. Meanwhile, the NZX 15declined 1.69% or 96.04 points to close at 5592.69.
In South Korea, stocks closed lower as snowballing sovereign debt woes in Europe promptedskepticism over a fledgling global economic recovery. In a broad-based slump, the KoreaComposite Stock Price Index (KOSPI) gave up 49.30 points or 3.05% to end at 1,567.12.Today’s steep losses pushed the key index back to the lowest level since it ended at1,555.70 on 30 November 2009, after foreigners sold a net $293 billion in shares followingthree days of buying.
In Singapore, the key stock index tanked, driving the index to a fourth straight weeklylosses on concerns the global recovery may falter on weak cues from Asian and Europeanbourses and Wall Street overnight triggered by concerns over sovereign debt problems inEurope and U.S. unemployment. At the closing bell, the blue chip Straits Times Index wasat 2,683.56, dropped 61.42 points or 2.24%. The gauge tumbled 2.1% or 58.2 points thisweek, its fourth week of decline.
In Taiwan, stock market flunked to five month low, by posting the biggest single day losssince 22 January 2008, as investors step up the selling activity following Wall Streetlosses on rising debt problems in Europe. All sectoral indices registered broad baselosses. The benchmark Taiex share index followed the global cues by extending the lossesfor the fourth session, finishing the day lower by 324.21 points or 4.30% at 7217.83– the biggest single day fall since 22 January 2008 when market tanked 528.54 points.It is also the lowest closing since 4 September 2009 when market finished the day at7153.13.
On the economic front, Taiwan’s industrial production index jumped 47.34%year-on-year to reach 114.51 points in December last year, a historical high, thanks tothe relatively low comparison base and the widely-reported economic recovery globally,.
According to statistics compiled by the statistics department under the Ministry ofEconomic Affairs (MOEA), the production index for the manufacturing industry also hit ahistoric-high record with an annual growth of 50.16% in the same month.
In Philippines, cautiousness and risk aversion once more ruled the Philippines stockmarket, with PSEi plummeting more than 2% following a two-day rebound. Market playersremained jittery following the razor sharp losses on Wall Street overnight. Aside fromthat, investors remained pessimistic over the monetary board’s moves over theinterest rates. Though the CPI figures released today, slightly eased for the first timein five months in January, it is still holding near an eight months high level, supportingthe central bank's view that current policy settings were appropriate. At the final bell,the benchmark index PSEi plummeted 2.03% or 59.23 points to 2,855.64, while the All Sharesindex declined 1.68% or 31.22 points to 1,822.56.
In India, sustained selling pressure kept key benchmark indices suppressed throughout theday. World stocks fell as Europe’s sovereign debt, indications of weak US jobs dataand a crash in commodity and energy prices raised fresh concerns over global economicrecovery. The barometer index slipped below the psychological 16,000 mark. The BSE30-share Sensex was down 434.02 points or 2.68% to 15,790.93. The S&P CNX Nifty wasdown 126.70 points or 2.61% to 4718.65.
Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly lower at 1247.90while stock markets in Indonesia’s Jakarta Composite index gave up by 74.24 pointsending the day lower at 2518.98.
In other regional market, European shares fell for the third straight day on Friday, asinvestors continued to fret about the health of Greek, Portuguese and Spanish financesahead of the release of U.S. jobs data. The major European regional markets held up a bitbetter, with the German DAX index down 1.3% or 74.31 points at 5,459, the French CAC-40index lost 2.4% or 89.29 points to 3,600 and the U.K. FTSE 100 index down 1.7% or 87.32points to 5,052.
