Asia Tracks U.S. Lower

Ivaylo
20 Jun, 2006
New York City

Japanese stocks closed lower for a second day running as technology, financial and real-estate issues declined, ahead of U.S. Federal Reserve likely rise of interest rates at its Jun 28-29 meeting. Investors chose to stay on the sidelines until a clearer perspective emerges for the U.S. economy.Elsewhere in the region, other indexes also followed Japan downward.

[R]7:15AM Asian stocks decline on U.S. rate concerns.[/R]
Asian markets finished lower. Japan’s benchmark Nikkei 225 index dropped 211.94 points, or 1.4%, to close at 14648.41. Decliners included Tokyo Electron, which shed 1.4%, and NEC, which recorded a 2.2% fall. Internet services company Softbank dropped 1.8%. Hong Kong stocks closed lower for the second straight session, following weak regional markets. The benchmark Hang Seng Index dropped 159.89 points, or 1%, to 15608.97. China''s oil refiner Sinopec lost 3.7%. The company is saidto be working on a deal with McDonald''s to open an unspecified number of drive-through restaurants in China. Other indexes across the region also fell. Taiwan''s Taiex index ended 3.3% lower at 6363.55. Singapore''s Straits Times Index finished 1.8% down at 2325.09, and South Korea''s Composite Index, or Kospi, settled 2.1% down at 1225.83.

[R]6:30AM European stocks drop slightly in mid morning trade.[/R]
European shares fell slightly in mid morning trade. The FTSE 100 in London lost 0.3% at 5,610.6, the Xetra Dax in Frankfurt was down 0.3% to 5,422.66 and the CAC-40 in Paris was off 0.3% to 4,715.06. On the corporate front, Deutsche Börse on Monday launched a new effort to take Euronext away from a deal with the NYSE Group, making key concessions on operations that would give its Paris-based rival more power than the Germans had been prepared to give away. The French government delayed till September the full privatisation of Gaz de France. Its plans to merge Gaz de France and Suez to create the world’s second-largest energy group overcame at least one political hurdle on Monday as the French government put a timetable on crucial legislation to privatise the gas group. Veolia Environnement advanced 2.4% as the French utility, which abandoned its plan for a merger with French construction and concessions grup Vinci, was upgraded to “neutral” by UBS. The Swiss broker reduced its target price, but noted the shares had fallen 15% during the past week and were now fairly valued.

Light, sweet crude oil for July delivery was unchanged at $68.98 a barrel. July Brent crude futures on the ICE Futures exchange shed 5 cents to $68.06 a barrel. Gold edged down at $569.0 an ounce on Tuesday, down $3.0 an ounce from Monday''s close of $572.0. The U.S. dollar was trading at 115.05 yen, down 0.32 yen from late Monday in New York. The euro advanced to US$1.2592, from US$1.2572. The British pound chnaged little was buying $1.84.

[R]5:00AM Gold futures fall on dollar strength.[/R]
Gold for August delivery settled down $9.30 at $572.40 an ounce on NYME. Silver ended down 16 cents to $9.97 an ounce, while platinum shed $6.80 at $1,137.8 an ounce and palladium slumped $10.95 to $295.10 an ounce. Copper also declined 13.90 cents to $3.1525 a pound.

Crude oil for July delivery also recorded losses early Monday and was last down 93 cents at $68.95 a barrel. Heating oil futures fell slightly to $1.8930 per gallon, while natural gas futures shed 17 cents to $6.720 per 1,000 cubic feet. Gasoline futures slid slightly to $1.9880 a gallon.