Fall in US GDP worst in 51 years
- Thread starter Nahraf
- Start date
Nahraf
SENIOR MEMBER
- Joined
- Mar 24, 2010
- Messages
- 1,508
- Reaction score
- 0
http://online.wsj.com/article/SB10001424052748703959704575454352934884906.html
Asia Falls on Global Worries
SINGAPORE -- Asian stock markets were lower Friday as concerns about the global economic recovery kept buyers at bay, while Tokyo stocks continued to struggle against a strong yen.
Markets were wary ahead of a revised estimate for U.S. second-quarter gross domestic product due later on Friday, and a speech from Federal Reserve Chairman Ben Bernanke at an annual meeting of central bankers and top financial officials in Jackson Hole, Wyoming.
"Potentially the most important risk will be Fed chairman Bernanke's speech," said RBC Capital Markets in a note to clients. It added that investors expecting the Fed Chief to signal more quantitative easing to jump start the U.S. economic recovery may be disappointed. "We would caution those putting too much faith in this speech as a possible platform for the Fed's future QE intentions."
"In a market gripped by fear and looking for some official response after the horrible housing data earlier in the week, his words will be very closely scrutinized," RBC said.
Japan's Nikkei Stock Average was down 0.5%, Australia's S&P/ASX 200 was off 0.2%, South Korea's Kospi Composite fell 0.1% and New Zealand's NZX-50 was down 0.1%. Dow Jones Industrial Average futures were up five points in screen trade.
Concerns about the U.S. economy, a high yen and Wall Street's weak performance dented Tokyo stocks. Selling was broad-based with 29 of the 33 Topix subsectors in the red.
"Investors are growing increasingly concerned about the U.S. economy, and there are repercussions in the Japanese market," said Naoki Fujiwara, fund manager at Shinkin Asset Management.
Exporters were again hit by the now-familiar culprit--a stubbornly high yen.
Kyocera fell 1.7%, Canon was down 1.3%, Sharp was down 1.0% and Sony eased 0.7%.
Toyota Motor fell 1.2% after the automaker on Thursday announced it would conduct a safety recall involving about 1.3 million Corollas sold in the U.S. and Canada to address some engine control modules that may have been improperly manufactured.
Real estate stocks were outperforming after Morgan Stanley MUFJ Securities upgraded Nomura Real Estate to Overweight and Mitsubishi Estate to Equal-weight; the stocks were up 2.3% and 0.8% respectively.
Asahi Breweries was up 0.4% after it agreed to acquire P&N Beverages Australia-- Australia's third-biggest soft drink maker by sales volume--for about Y27.2 billion. The Japanese maker of beer and soft drinks aims to merge P&N Beverages with Schweppes, which Asahi bought in 2009 for $774 million.
"The size of the company (P&N Australia) is not big, but we can expect a clear synergy (between P&N and Schweppes)," said Yoshiaki Yamaguchi, analyst at SMBC Friend Research Center.
Australian shares were dragged lower by financial, material, industrial and energy plays.
Bank and resource stocks were doing most of the damage, with National Australia Bank off 1.3% and BHP Billiton down 0.9%.
Fairfax shares jumped 6% after the group posted a 23% on-year rise in underlying fiscal year profit, beating market expectations. Ramsay Health Care also advanced 2.8% on broker upgrades. "Trading today has been fairly predictable, based on what happened in the U.S. overnight," said Shaw Stockbroking head of trading Jamie Spiteri. "It's been consistent with what's been happening in recent weeks, where the market has remained cautious about the U.S. economy," he said.
Shares in Seoul tracked weaker regional markets, with foreign investors' sales weighing on the Kospi.
"Economic uncertainties continue to weigh on investor sentiment and the benchmark index will likely move in a tight range today," said Lee Kyoung-min at Woori Investment & Securities.
Tech plays were down with Samsung Electronics off 0.5%, LG Display down 0.8% and Hynix Semiconductor down 0.7%. Automakers and shipbuilding stocks were higher, helping to contain the market's fall. Hyundai Motor rose 0.7% while Samsung Heavy Industries advanced 1.2%.
Government measures on Sunday to stimulate the real estate market were also driving construction stocks higher; Daewoo Engineering & Construction rose 1.6% and Daelim Industrial added 1.3%.
New Zealand shares were drifting lower in sympathy with Wall Street's drop. Trading was subdued as investors digested the "wall of results that have been coming through in Australasia over last few days," said First NZ Capital senior broker James Snell.
Electricity lines network company Vector advanced 0.5% after its fiscal year results were broadly in line with expectations. Other blue-chip companies were weaker, with Fletcher Building giving up 0.4% and Auckland Airport down 0.5%.
In foreign exchange markets, the U.S. dollar remained under pressure against the yen and was in a tight range against the euro ahead of Bernanke's speech and the GDP data.
The euro was fetching $1.2707 against the dollar, from $1.2724 late Thursday in New York, and at 107.19 against the yen, from 107.40 yen. The dollar was buying 84.34 yen, compared with 84.41 yen.
"Bernanke will most likely emphasise the uncertainty of the U.S. outlook and further Fed action certainly won't be ruled out...(and) the second estimate of U.S. second-quarter GDP will also be worth watching," said Mike Jones, currency strategist at the Bank of New Zealand.
He said given the worries about the U.S. economic outlook, the dollar will likely come under renewed selling if the data disappoint.
Lead September Japanese government bond futures were up 0.14 at 142.96 points, underpinned by the Nikkei's weakness and persistent concerns about the global economic recovery. The 10-year cash bond yield was down 0.5 basis point at 0.930%.
Spot gold was at $1,235.40 per troy ounce, down 90 cents from late New York trade Thursday.
October Nymex crude oil futures were down 40 cents at $72.96 per barrel.
Write to Shri Navaratnam at shri.navaratnam@dowjones.com
Asia Falls on Global Worries
SINGAPORE -- Asian stock markets were lower Friday as concerns about the global economic recovery kept buyers at bay, while Tokyo stocks continued to struggle against a strong yen.
Markets were wary ahead of a revised estimate for U.S. second-quarter gross domestic product due later on Friday, and a speech from Federal Reserve Chairman Ben Bernanke at an annual meeting of central bankers and top financial officials in Jackson Hole, Wyoming.
"Potentially the most important risk will be Fed chairman Bernanke's speech," said RBC Capital Markets in a note to clients. It added that investors expecting the Fed Chief to signal more quantitative easing to jump start the U.S. economic recovery may be disappointed. "We would caution those putting too much faith in this speech as a possible platform for the Fed's future QE intentions."
"In a market gripped by fear and looking for some official response after the horrible housing data earlier in the week, his words will be very closely scrutinized," RBC said.
Japan's Nikkei Stock Average was down 0.5%, Australia's S&P/ASX 200 was off 0.2%, South Korea's Kospi Composite fell 0.1% and New Zealand's NZX-50 was down 0.1%. Dow Jones Industrial Average futures were up five points in screen trade.
Concerns about the U.S. economy, a high yen and Wall Street's weak performance dented Tokyo stocks. Selling was broad-based with 29 of the 33 Topix subsectors in the red.
"Investors are growing increasingly concerned about the U.S. economy, and there are repercussions in the Japanese market," said Naoki Fujiwara, fund manager at Shinkin Asset Management.
Exporters were again hit by the now-familiar culprit--a stubbornly high yen.
Kyocera fell 1.7%, Canon was down 1.3%, Sharp was down 1.0% and Sony eased 0.7%.
Toyota Motor fell 1.2% after the automaker on Thursday announced it would conduct a safety recall involving about 1.3 million Corollas sold in the U.S. and Canada to address some engine control modules that may have been improperly manufactured.
Real estate stocks were outperforming after Morgan Stanley MUFJ Securities upgraded Nomura Real Estate to Overweight and Mitsubishi Estate to Equal-weight; the stocks were up 2.3% and 0.8% respectively.
Asahi Breweries was up 0.4% after it agreed to acquire P&N Beverages Australia-- Australia's third-biggest soft drink maker by sales volume--for about Y27.2 billion. The Japanese maker of beer and soft drinks aims to merge P&N Beverages with Schweppes, which Asahi bought in 2009 for $774 million.
"The size of the company (P&N Australia) is not big, but we can expect a clear synergy (between P&N and Schweppes)," said Yoshiaki Yamaguchi, analyst at SMBC Friend Research Center.
Australian shares were dragged lower by financial, material, industrial and energy plays.
Bank and resource stocks were doing most of the damage, with National Australia Bank off 1.3% and BHP Billiton down 0.9%.
Fairfax shares jumped 6% after the group posted a 23% on-year rise in underlying fiscal year profit, beating market expectations. Ramsay Health Care also advanced 2.8% on broker upgrades. "Trading today has been fairly predictable, based on what happened in the U.S. overnight," said Shaw Stockbroking head of trading Jamie Spiteri. "It's been consistent with what's been happening in recent weeks, where the market has remained cautious about the U.S. economy," he said.
Shares in Seoul tracked weaker regional markets, with foreign investors' sales weighing on the Kospi.
"Economic uncertainties continue to weigh on investor sentiment and the benchmark index will likely move in a tight range today," said Lee Kyoung-min at Woori Investment & Securities.
Tech plays were down with Samsung Electronics off 0.5%, LG Display down 0.8% and Hynix Semiconductor down 0.7%. Automakers and shipbuilding stocks were higher, helping to contain the market's fall. Hyundai Motor rose 0.7% while Samsung Heavy Industries advanced 1.2%.
Government measures on Sunday to stimulate the real estate market were also driving construction stocks higher; Daewoo Engineering & Construction rose 1.6% and Daelim Industrial added 1.3%.
New Zealand shares were drifting lower in sympathy with Wall Street's drop. Trading was subdued as investors digested the "wall of results that have been coming through in Australasia over last few days," said First NZ Capital senior broker James Snell.
Electricity lines network company Vector advanced 0.5% after its fiscal year results were broadly in line with expectations. Other blue-chip companies were weaker, with Fletcher Building giving up 0.4% and Auckland Airport down 0.5%.
In foreign exchange markets, the U.S. dollar remained under pressure against the yen and was in a tight range against the euro ahead of Bernanke's speech and the GDP data.
The euro was fetching $1.2707 against the dollar, from $1.2724 late Thursday in New York, and at 107.19 against the yen, from 107.40 yen. The dollar was buying 84.34 yen, compared with 84.41 yen.
"Bernanke will most likely emphasise the uncertainty of the U.S. outlook and further Fed action certainly won't be ruled out...(and) the second estimate of U.S. second-quarter GDP will also be worth watching," said Mike Jones, currency strategist at the Bank of New Zealand.
He said given the worries about the U.S. economic outlook, the dollar will likely come under renewed selling if the data disappoint.
Lead September Japanese government bond futures were up 0.14 at 142.96 points, underpinned by the Nikkei's weakness and persistent concerns about the global economic recovery. The 10-year cash bond yield was down 0.5 basis point at 0.930%.
Spot gold was at $1,235.40 per troy ounce, down 90 cents from late New York trade Thursday.
October Nymex crude oil futures were down 40 cents at $72.96 per barrel.
Write to Shri Navaratnam at shri.navaratnam@dowjones.com
Similar threads
