Asia stocks fall on US woes, US dollar weak
Tuesday, September 11, 2007
ASIAN stocks fell more than one per cent yesterday, with exporters hit hard as the US dollar slumped to a 15-year low against a basket of major currencies on concerns the US economy may be heading into a recession.
Data on Friday showing US payrolls shrank in August for the first time in four years suggested that a credit squeeze stemming from problems in the US sub-prime mortgage market is beginning to stifle growth in Asia's top export market.
European stocks, which sank on Friday in the wake of the data, were set for a largely flat start according to financial bookmakers.
Benchmark Japanese government bond yields fell to a 19-month low while two-year US Treasury yields were pinned near a two-year low on growing expectations that the Federal Reserve may slash interest rates next week to support the economy.
"A rate cut by the US Federal Reserve would certainly ease investor concerns and it is increasingly likely that it will happen. But short of that, it is hard to see what the catalyst will be for investors' nerves to be soothed," said Martin Arnold, an equities economist at CommSec in Sydney.
MSCI's measure of Asia Pacific stocks excluding Japan was down 1.5 per cent by 0620 GMT.
The index had risen for the past three weeks, and remains more than 15 per cent above a five-month trough plumbed on August 17.
Tokyo's Nikkei share average closed down 2.2 per cent at a three-week low, with major exporters such as Sony leading the market lower.
Sentiment was further dented by news Japan's economy contracted more than expected in the second quarter, bolstering views that the Bank of Japan is unlikely to raise interest rates next week.
Hong Kong shares fared better than elsewhere, falling 0.5 per cent as blue chip Hong Kong Exchanges and Clearing Ltd surged 17 per cent after the government raised its shareholding in the city's bourse operator.
Australian shares closed 1.3 per cent lower, pressured as a raft of companies started trading ex-dividend, including index heavyweight BHP Billiton Ltd and AMP Ltd.
South Korea's benchmark index ended down 2.6 per cent, posting its biggest one-day fall since August 17, and Singapore's Straits Times Index was 1.6 per cent lower.
In Tokyo, Sony ended down 6.0 per cent and Toyota Motor Corp was off 2.4 per cent as the yen firmed against the US dollar.
But Tokyo Star Bank Ltd jumped 14 per cent on news that private equity firm Advantage Partners was closer to getting regulatory approval to acquire it.
Gold up, oil down
Gold which often moves in the opposite direction to the dollar, hovered near US$700 per ounce, within sight of the 16-month high hit after the US payrolls report recently released.
Oil prices nudged down but held above US$76 a barrel, as expectations Opec will maintain supply curbs today countered the weak US jobs data.
Reuters
Data on Friday showing US payrolls shrank in August for the first time in four years suggested that a credit squeeze stemming from problems in the US sub-prime mortgage market is beginning to stifle growth in Asia's top export market.
European stocks, which sank on Friday in the wake of the data, were set for a largely flat start according to financial bookmakers.
Benchmark Japanese government bond yields fell to a 19-month low while two-year US Treasury yields were pinned near a two-year low on growing expectations that the Federal Reserve may slash interest rates next week to support the economy.
"A rate cut by the US Federal Reserve would certainly ease investor concerns and it is increasingly likely that it will happen. But short of that, it is hard to see what the catalyst will be for investors' nerves to be soothed," said Martin Arnold, an equities economist at CommSec in Sydney.
MSCI's measure of Asia Pacific stocks excluding Japan was down 1.5 per cent by 0620 GMT.
The index had risen for the past three weeks, and remains more than 15 per cent above a five-month trough plumbed on August 17.
Tokyo's Nikkei share average closed down 2.2 per cent at a three-week low, with major exporters such as Sony leading the market lower.
Sentiment was further dented by news Japan's economy contracted more than expected in the second quarter, bolstering views that the Bank of Japan is unlikely to raise interest rates next week.
Hong Kong shares fared better than elsewhere, falling 0.5 per cent as blue chip Hong Kong Exchanges and Clearing Ltd surged 17 per cent after the government raised its shareholding in the city's bourse operator.
Australian shares closed 1.3 per cent lower, pressured as a raft of companies started trading ex-dividend, including index heavyweight BHP Billiton Ltd and AMP Ltd.
South Korea's benchmark index ended down 2.6 per cent, posting its biggest one-day fall since August 17, and Singapore's Straits Times Index was 1.6 per cent lower.
In Tokyo, Sony ended down 6.0 per cent and Toyota Motor Corp was off 2.4 per cent as the yen firmed against the US dollar.
But Tokyo Star Bank Ltd jumped 14 per cent on news that private equity firm Advantage Partners was closer to getting regulatory approval to acquire it.
Gold up, oil down
Gold which often moves in the opposite direction to the dollar, hovered near US$700 per ounce, within sight of the 16-month high hit after the US payrolls report recently released.
Oil prices nudged down but held above US$76 a barrel, as expectations Opec will maintain supply curbs today countered the weak US jobs data.
Reuters
Business Besides Oil
