Asian markets cautious after negative US data


January 1, 1970 - Views : 1448
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Asian stock markets were generally down on Wednesday with investors taking a cautious view of the global economic outlook after negative figures from the United States.

Japan's Nikkei headline index closed down 0.63 percent, or 58.39 points, at 9,279.65 after data from the Institute for Supply Management suggested the US service sector had suffered a sharper-than-expected slowdown in June.

The Topix index of all first-section shares sank 0.68 percent.

Investors were also put off by the yen's continued strength, a handicap for exporters. Honda Motor tumbled 1.63 percent, Sony 1.69 percent and Canon 0.44 percent.

Sydney's S&P/ASX 200 closed down 0.50 percent, or 21.5 points, at 4,254.6 after strong gains the previous day.

"Turnover remains relatively low on the market as investors take stock," said CMC Markets analyst Rob Mulcahy. "It's just not the sort of environment investors feel at ease with."

Hong Kong closed down 1.13 percent, with traders pointing to profit-taking and global economic worries.

The benchmark Hang Seng index was down 227.05 points at 19,857.07, with losses for mainland blue chips such as conglomerate Citic Pacific (down 2.81 percent), energy giant CNOOC (2.76 percent) and electronics maker Foxconn (2.16 percent).

Shanghai showed signs of reviving from its recent slump however, closing up 0.49 percent led by cement, home appliance and car stocks. The Shanghai Composite Index, which covers both A and B shares, was up 11.69 points at 2,421.12.

"The index is consolidating after enormous falls in recent weeks. The market should be starting to reverse a risk-averse trading approach," Wang Junqing, an analyst from Guosen Securities, told Dow Jones Newswires.

Shanghai's slight rebound follows indications that the massive initial public offering of China's Agricultural Bank will set a world record, raising 22.1 billion dollars if over-allotment options are exercised.

Some observers have suggested the stock may have a bumpy ride after floatation later this month.

Singapore's Straits Times Index ended down 0.24 percent, or 6.99 points, at 2,861.03, with United Overseas Bank diving 32 cents to 19.36 and City Developments falling 18 cents to 10.94.

Earlier US markets managed to break a week-long losing streak, with the Dow Jones Industrial Average rising 0.59 percent, or 57.14 points, to close at 9,743.62.

The tech-rich Nasdaq composite index rose 0.10 percent, or 2.09 points, to 2,093.88.

The US Institute for Supply Management Tuesday said its non-manufacturing index showed a steeper-than-expected fall in June, sparking fresh jitters over the world's largest economy.

The index fell to 53.8 points from 55.4 in May. Most economists had expected the June figure to be at 55.0. Any figure over 50 percent signifies growth.

In Tokyo the dollar held firm against other currencies as investors adjusted positions after the greenback's sharp overnight falls amid US economic concerns, traders said.

The euro bought 1.2601 dollars in Tokyo afternoon trade after surging to 1.2623 dollars in New York late Tuesday. Against the Japanese currency the euro fell to 110.20 yen from 110.50. The dollar was almost unchanged at 87.45 yen.

In Asian oil markets, New York's main contract, light sweet crude for August delivery, gained 10 cents to 72.08 dollars a barrel and Brent North Sea crude, also for August, was 13 cents up at 71.58 dollars.

Gold ended at 1,190.00-1,191.00 US dollars an ounce in Hong Kong, continuing its downwards path as China said the precious metal would not be a key investment for its massive foreign currency reserves.






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