Showing posts with label Corrected.Stocks and Markets in the News | Asian Markets at Close Report | MarketWatch -September 4. Show all posts
Sep 4, 2012
Corrected: Asia stocks edge lower, with Europe in focus: Stocks and Markets in the News | Asian Markets at Close Report | MarketWatch -September 4, 2012-.
HONG KONG (MarketWatch) — Asian markets declined Tuesday as investor focus returned to euro-zone worries after ratings agency Moody’s downgraded its outlook on the European Union, with banks retreating in Sydney after the Reserve Bank of Australia left its key rate unchanged.
Markets also turned cautious ahead of Thursday’s European Central Bank policy meeting, and in the absence of cues from the U.S., where markets were closed on Monday for Labor Day.
Credit Agricole strategist Frances Cheung said that while elevated hopes for policy support from Chinese, European and U.S. central banks was supporting risk appetite, “we doubt the rally in risk assets can be sustained when the economic backdrop actually got worse.”
“As we get nearer to Thursday, investors will become cautious again,” Cheung said.
Australia’s S&P/ASX 200 index AU:XJO -0.61% declined 0.6%, while Hong Kong’s Hang Seng Index HK:HSI -0.66% dropped 0.7% and China’s Shanghai Composite CN:000001 -0.75% shed 0.8%.
Japan’s Nikkei Stock Average JP:100000018 -0.10% slipped 0.1% and South Korea’s Kospi KR:SEU -0.29% dropped 0.3%, while Taiwan’s Taiex XX:Y9999 +0.01% ended little changed from Monday’s close.
Investors awaited a handful of potential market-moving events this week, including a European Central Bank meeting on Thursday, while a weak U.S. non-farm payroll report on Friday could signal another round of asset purchases by the Federal Reserve.
Auto stocks were mostly lower after August sales data.
Honda Motor Co. JP:7267 +0.73% HMC -0.41% slipped 0.2%, while Nissan Motor Co. JP:7201 +0.96% NSANY -1.11% edged up 0.1%, after both posted lower August sales.
Shares of Toyota Motor Corp. JP:7203 -0.32% TM -0.76% lost 0.3% in the overall weak market, although data out late Monday showed its monthly sales rose 18%.
Sharp Corp. JP:6753 +12.37% SHCAF -10.96% rallied 12.4%, following reports suggesting it will strike a revised investment deal with Taiwan’s Hon Hai Precision Industry Co. TW:2317 -0.11% at a lower price.
Heavy declines for financial firms weighed in Sydney, after the Reserve Bank of Australia left its benchmark rate steady at 3.5%, as widely expected.
Still, “markets had positioned themselves for a shift to a more dovish tone thanks mostly to weak data from China which added pressure on Australian markets prior to release,” said Andrew Taylor at GFT Markets.
“The statement didn’t provide that shift in view and in fact saw the central bank remain relatively upbeat commenting that China remains robust and the current policy settings are appropriate,” he added.
BHP +1.26% Westpac Banking Corp. AU:WBC -2.13% WBK +1.60% traded down 2.1% and Australia & New Zealand Banking Group Ltd. AU:ANZ -2.01% ANZBY +0.86% fell 2%.
Shares of iron-ore producer Fortescue Metals Group Ltd. AU:FMG -4.21% FSUGY -2.80% sank 4.2% after the miner said it would cut jobs and spending amid a slowing Chinese economy and sharp falls in prices for its key commodity. Read more on the Fortescue announcement.
“The recent sharp decline in commodity prices has caused profits to deteriorate significantly, such that miners are now spending more in capex than they are earning. This is not a sustainable situation,” said strategists at Credit Suisse.
A retreat for financials weighed on the market in Hong Kong. Bank of Communications Co. HK:3328 -0.80% lost 0.8% and China Construction Bank Corp. HK:939 -0.98% CICHY +0.76% declined 1%.
Aluminum Corp. of China Ltd. HK:2600 -0.34% ACH +0.42% fell 0.3% but still outperformed the wider market, after it dropped its bid to acquire Mongolia’s SouthGobi Resources Ltd. HK:1878 -6.54% .
SouthGobi shares tumbled 6.5%. Read more on Chalco’s dropped bid for SouthGobi.
In Seoul, shares of Hyundai Motor Co. HYMLY -0.0052% gave up 2.3% despite securing a labor deal with its union.
Virginia Harrison is a MarketWatch reporter based in Sydney. Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
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