Kospi, Nikkei Lead The Advance In Mixed Regional Market
The stock markets across the Asian region closed mixed after a firm start following the Fed's move to provide $85 billion bridge loan to American International Group in exchange for an 80% stake in the insurance giant. On Wall Street, the markets finished sharply higher after the Federal Reserve left its key interest rates unchanged at 2%. The Dow closed up 141 points or 1.3% at 11,059, the broader S&P 500 rose 20.9 points or 1.8% to finish at 1,213, and the Nasdaq advanced 28 points or 1.3% to close at 2,207.
Crude oil futures were higher in late Asian trade, rebounding from the seven-month low hit on Tuesday. In late Asian deals, oil was quoted at $93.83 a barrel.
In the currency market, the U.S. dollar was quoted in the mid 105-yen levels, down from the mid 106-yen range in early trade, but up from Tuesday's late quotes in the upper 103-yen levels in Tokyo.
The Australian dollar recovered from recent lows against the U.S. dollar after the U.S. government bailed out the beleaguered American Insurance Group. In late local trade, the Aussie edged up to US$0.8005 from an intra-day low of US$0.7910, and off 13-month lows of US$0.7852 hit in the previous session. The Aussie finished Tuesday's session at US$0.7886-0.7890.
The New Zealand dollar rose against the U.S. dollar, but gave away some of the gains before finishing the local session at US$0.6599, down from US$0.6603 in early trade. However, it closed higher compared to Tuesday's late quotes of US$0.6490.
The South Korean won rallied against the U.S. dollar. The won finished Wednesday's session at 1,129.9 a dollar, up 30.1 won from Tuesday's 49-month-low finish of 1,160.0.
Coming back to Asian equities the relief rally fizzled out as lingering concerns about the banking sector weighed on the stock markets in Australia, China, Hong Kong and Singapore. Asian financial stocks fell, as a U.S. bailout of American International Group failed to ease concerns that credit-related losses will cause more financial failures. Macquarie Group slumped in Sydney, despite denying a newspaper report that it might face difficulty in refinancing debt.
The Japanese market rebounded on bargain hunting following Tuesday's sharp losses. The benchmark Nikkei 225 index closed up 140.07 points or 1.21% at 11,749.79 and the broader Topix index of all First Section issues on the Tokyo Stock Exchange gained 3.86 points or 0.35% to finish at 1,121.43.
Tokyo stocks traded in positive territory throughout the day but gave up some of their early sharp gains in the afternoon as investors became anxious about the outlook for the U.S. financial sector and falls in Shanghai and Hong Kong shares dampened investor sentiment to some extent.
In a widely expected move, the Bank of Japan left its overnight call rate target unchanged at 0.5% by a unanimous vote and maintained its assessment of the economy, which it said was still sluggish.
The Chinese market closed sharply lower for the second straight session after China Merchants Bank announced a large exposure to Lehman Brothers. The benchmark Shanghai Composite Index closed down 2.90% at a 22- month low of 1,929.05.
The Hong Kong market closed sharply lower, falling for the sixth straight session, as China banks fell on concerns about narrowed interest-rate spreads and worries about their exposure to the troubled U.S. financial institutions. The benchmark Hang Seng index closed down 663.42 points or 3.63% at the day's low of 17,637.19.
The Australian market closed lower Wednesday, extending its losses for the third consecutive trading session. The market started off higher, but pared gains in the afternoon session as Australia's biggest investment bank, Macquarie Group, fell to its lowest level in more than four years on speculation about a potential funding shortfall.
The benchmark S&P/ASX 200 index closed down 28.6 points or 0.6% at 4,722.2 after losing 1.4% on Tuesday. The broader All Ordinaries index dropped 30.1 points or 0.6% to finish at 4,847.
On the economic front, a private sector projection of Australia's economy is forecasted an annualized growth of 3.7%. The July Leading Index, published by Westpac Bank and the Melbourne Institute, rose 0.5% for the month. The full-year rate was down from the revised reading of 4.0% reported in June. The index, which projects economic activity three to nine months in the future, was well below the long-term trend of 4.2%.
Meanwhile, the Australian Bureau of Statistics said that the value of Australia's August imports totaled A$18.455 billion, down 6% or A$1.15 billion from July. The bureau's preliminary figures showed that imports of goods decreased 3% in seasonally adjusted terms for the month. Intermediate and other merchandise goods were down 7%, while fuels and lubricants imports fell 25%.
The New Zealand stock market closed higher, ending a two-day losing streak. The market opened weak, but soon moved into positive terrain following the U.S. Federal Reserve's plan to rescue beleaguered American International Group. The benchmark NZX 50 index closed up 1.30% at 3,269.93 after plunging 2.8% on Tuesday. The broader NZX All Capital Index advanced 45.79 points or 1.39% to finish at 3,301.69.
The South Korean market closed sharply higher on bargain hunting following Tuesday's 6% plunge. The benchmark Korea Composite Stock Price Index or KOSPI closed up 2.7%, at 1,425.26.
In India, intense-selling pressure in key index pivotal dragged the key benchmark indices lower in volatile trade. The BSE Sensex, extended losses for the seventh straight day, declining 255.90 points. The S&P CNX Nifty settled just above the psychological 4,000 level. The BSE 30-share Sensex lost 255.90 points or 1.89% at 13,262.90. The Sensex opened with a upward gap of 101.94 points at 13,620.74, which is also its day's high so far, boosted by Fed's rescue plan for AIG. At the day's low of 13,127.96 hit mid-afternoon trade, the Sensex lost 390.84 points. The S&P CNX Nifty lost 66.65 points or 1.64%, to settle at 4008.25. At the day's low of 3,974.60,
Elsewhere, Taiwan's Taiex closed up 0.8% at 5,800; Singapore's STI fell 1.7% to 2,419; Malaysia's KLCI closed down 0.9% at 1,002 and Indonesia's Jakarta Composite index closed up 2.0% at 1,769.
In the other part of the world, European shares rose on Wednesday but were off the session's highs, with more uncertainty about the health of financials such as U.K. mortgage lender HBOS contributing to a volatile session.
Of national indexes, the U.K. FTSE 100 index rose 0.6% to 5,058.50, the German DAX 30 index edged up 0.1% to 5,972.64 and the French CAC-40 index inched down 0.1% at 4,082.25. At 11.38 GMT continued to gain further as U.K. FTSE 100 index increased by 1.1% to 5,082.20. The German DAX 30 index increased by 0.7% to 6, 007.18, while the French CAC-40 index was up by 0.4% to 4,103.07.
Looking ahead the day is scheduled to release the data on building permits from US for the month of August, which will be followed by second quarter current account detail. It will be also accompanied by housing starts for the month of August, which will be followed by the EIA's weekly update on crude oil stock.
The stock markets across the Asian region closed mixed after a firm start following the Fed's move to provide $85 billion bridge loan to American International Group in exchange for an 80% stake in the insurance giant. On Wall Street, the markets finished sharply higher after the Federal Reserve left its key interest rates unchanged at 2%. The Dow closed up 141 points or 1.3% at 11,059, the broader S&P 500 rose 20.9 points or 1.8% to finish at 1,213, and the Nasdaq advanced 28 points or 1.3% to close at 2,207.
Crude oil futures were higher in late Asian trade, rebounding from the seven-month low hit on Tuesday. In late Asian deals, oil was quoted at $93.83 a barrel.
In the currency market, the U.S. dollar was quoted in the mid 105-yen levels, down from the mid 106-yen range in early trade, but up from Tuesday's late quotes in the upper 103-yen levels in Tokyo.
The Australian dollar recovered from recent lows against the U.S. dollar after the U.S. government bailed out the beleaguered American Insurance Group. In late local trade, the Aussie edged up to US$0.8005 from an intra-day low of US$0.7910, and off 13-month lows of US$0.7852 hit in the previous session. The Aussie finished Tuesday's session at US$0.7886-0.7890.
The New Zealand dollar rose against the U.S. dollar, but gave away some of the gains before finishing the local session at US$0.6599, down from US$0.6603 in early trade. However, it closed higher compared to Tuesday's late quotes of US$0.6490.
The South Korean won rallied against the U.S. dollar. The won finished Wednesday's session at 1,129.9 a dollar, up 30.1 won from Tuesday's 49-month-low finish of 1,160.0.
Coming back to Asian equities the relief rally fizzled out as lingering concerns about the banking sector weighed on the stock markets in Australia, China, Hong Kong and Singapore. Asian financial stocks fell, as a U.S. bailout of American International Group failed to ease concerns that credit-related losses will cause more financial failures. Macquarie Group slumped in Sydney, despite denying a newspaper report that it might face difficulty in refinancing debt.
The Japanese market rebounded on bargain hunting following Tuesday's sharp losses. The benchmark Nikkei 225 index closed up 140.07 points or 1.21% at 11,749.79 and the broader Topix index of all First Section issues on the Tokyo Stock Exchange gained 3.86 points or 0.35% to finish at 1,121.43.
Tokyo stocks traded in positive territory throughout the day but gave up some of their early sharp gains in the afternoon as investors became anxious about the outlook for the U.S. financial sector and falls in Shanghai and Hong Kong shares dampened investor sentiment to some extent.
In a widely expected move, the Bank of Japan left its overnight call rate target unchanged at 0.5% by a unanimous vote and maintained its assessment of the economy, which it said was still sluggish.
The Chinese market closed sharply lower for the second straight session after China Merchants Bank announced a large exposure to Lehman Brothers. The benchmark Shanghai Composite Index closed down 2.90% at a 22- month low of 1,929.05.
The Hong Kong market closed sharply lower, falling for the sixth straight session, as China banks fell on concerns about narrowed interest-rate spreads and worries about their exposure to the troubled U.S. financial institutions. The benchmark Hang Seng index closed down 663.42 points or 3.63% at the day's low of 17,637.19.
The Australian market closed lower Wednesday, extending its losses for the third consecutive trading session. The market started off higher, but pared gains in the afternoon session as Australia's biggest investment bank, Macquarie Group, fell to its lowest level in more than four years on speculation about a potential funding shortfall.
The benchmark S&P/ASX 200 index closed down 28.6 points or 0.6% at 4,722.2 after losing 1.4% on Tuesday. The broader All Ordinaries index dropped 30.1 points or 0.6% to finish at 4,847.
On the economic front, a private sector projection of Australia's economy is forecasted an annualized growth of 3.7%. The July Leading Index, published by Westpac Bank and the Melbourne Institute, rose 0.5% for the month. The full-year rate was down from the revised reading of 4.0% reported in June. The index, which projects economic activity three to nine months in the future, was well below the long-term trend of 4.2%.
Meanwhile, the Australian Bureau of Statistics said that the value of Australia's August imports totaled A$18.455 billion, down 6% or A$1.15 billion from July. The bureau's preliminary figures showed that imports of goods decreased 3% in seasonally adjusted terms for the month. Intermediate and other merchandise goods were down 7%, while fuels and lubricants imports fell 25%.
The New Zealand stock market closed higher, ending a two-day losing streak. The market opened weak, but soon moved into positive terrain following the U.S. Federal Reserve's plan to rescue beleaguered American International Group. The benchmark NZX 50 index closed up 1.30% at 3,269.93 after plunging 2.8% on Tuesday. The broader NZX All Capital Index advanced 45.79 points or 1.39% to finish at 3,301.69.
The South Korean market closed sharply higher on bargain hunting following Tuesday's 6% plunge. The benchmark Korea Composite Stock Price Index or KOSPI closed up 2.7%, at 1,425.26.
In India, intense-selling pressure in key index pivotal dragged the key benchmark indices lower in volatile trade. The BSE Sensex, extended losses for the seventh straight day, declining 255.90 points. The S&P CNX Nifty settled just above the psychological 4,000 level. The BSE 30-share Sensex lost 255.90 points or 1.89% at 13,262.90. The Sensex opened with a upward gap of 101.94 points at 13,620.74, which is also its day's high so far, boosted by Fed's rescue plan for AIG. At the day's low of 13,127.96 hit mid-afternoon trade, the Sensex lost 390.84 points. The S&P CNX Nifty lost 66.65 points or 1.64%, to settle at 4008.25. At the day's low of 3,974.60,
Elsewhere, Taiwan's Taiex closed up 0.8% at 5,800; Singapore's STI fell 1.7% to 2,419; Malaysia's KLCI closed down 0.9% at 1,002 and Indonesia's Jakarta Composite index closed up 2.0% at 1,769.
In the other part of the world, European shares rose on Wednesday but were off the session's highs, with more uncertainty about the health of financials such as U.K. mortgage lender HBOS contributing to a volatile session.
Of national indexes, the U.K. FTSE 100 index rose 0.6% to 5,058.50, the German DAX 30 index edged up 0.1% to 5,972.64 and the French CAC-40 index inched down 0.1% at 4,082.25. At 11.38 GMT continued to gain further as U.K. FTSE 100 index increased by 1.1% to 5,082.20. The German DAX 30 index increased by 0.7% to 6, 007.18, while the French CAC-40 index was up by 0.4% to 4,103.07.
Looking ahead the day is scheduled to release the data on building permits from US for the month of August, which will be followed by second quarter current account detail. It will be also accompanied by housing starts for the month of August, which will be followed by the EIA's weekly update on crude oil stock.
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