Asian Markets down on Inflation Concerns

Ivaylo
15 May, 2006
New York City

Japan''''s Nikkei Average declined for the fifth session in a row led by the release of inflation data and the yen hitting new eight-month highs against the greenback. The benchmark closed 114.87 points, at 16,486.91, reflecting weakness in automotive stocks. Shares in Singapore, Australia and Taiwan finished also lower. South Korea''''s Kospi index fell 2.6%.

[R]8:00 AM Asian shares closed down led by Nikkei.[/R]
Asian benchmarks finished lower Monday with the Japan’s Nikkei down for the fifth consecutive session, losing 114.87 points down, or 1.2% to close at 16,486.91 with significant drops in brokerage and export shares. Automakers led the decliners with Honda Motor down 2.6% and Toyota Motor slipping 2.2%. Shares of Softbank rose 3.9% on the news that the internet company was developing new products together with Apple. South Korea''s Kospi index was the biggest loser, dropping as much as 2.6%. Hong Kong''s Hang Seng Index slipped as much as 1.8% to 16,595.58. The Shanghai Composite Index beat the trend, advancing 2.6% to a two-year high after the yuan passed the eight-per-dollar mark on Monday. On Friday, the benchmark which tracks both A and B shares, rallied 4.2%, totaling a weekly advance of 11.3%.

[R]6:30AM Europe tumbles in early trading on inflation and interest rates.[/R]
European markets extended their losses in early trading, following worrisome news about the continuing rise of commodity prices and their impact on equity stocks. London’s FTSE 100 shed 1% in early trading, Frankfurt’s Xetra Dax slid 0.9 %, the French CAC 40 declined 1.1%. Oil stocks dropped in Europe following the fall in crude prices due to reports that the surging energy costs were affect global demand and consumer sentiment. Norway’s Statoil fell 2.9 %, Total in France edged 1% down, and Repsol in Spain lost 1%. Financial stocks were also hit on fears of rising interest rates. France’s CNP Insurances fell 3.6% and Allied Irish Bank declined 2.8%.

Oil continued its decline as IEA on Friday outlined the risk of soaring energy costs hitting consumption. Light crude fell $1.19 cents to $70.85 a barrel by 3:34 a.m. EST, London Brent crude shed $1.48 to $70.84. Precious metals also fell, with gold losing $21.80 to $692.50 an ounce. The dollar braked the losing momentum in early trading on Monday, gaining ground on the euro and the yen due to the declining commodity futures such as gold and oil. The euro bought $1.2842 from $1.2898 late Friday. The dollar edged up against the yen, standing at 110.21 yen from 109.95 yen in late Friday trading.

[R]5:00AM Gold closes lower on Friday, after a week of gains.[/R]
Gold lost some ground Friday, after adding up more than 6% over the past three days to close at $711.80 an ounce on the New York Mercantile Exchange, $9.70 lower on the day. It had hit a high of $732 an ounce earlier in the week – the highest level since 1980. Analysts predict that gold will continue its rise as the economy doesn’t show any signs of slowdown. The weakness might be revealed until later in the year or early next year, giving gold bulls a great leeway to advance.

Platinum finished higher on Friday at $1,318.50 an ounce, up $22.90, while palladium shed $1.65 to settle at $398.35 an ounce, after its peak of $409. Copper lost 5.9% to end at $3.864 a pound, swinging from a high of $4 on Thursday. Crude oil also finished down at $72.04 a barrel. July Arabica coffee lost 0.85 cent to close at $1.0360 a pound and July