Asia Falters On U.S. Losses

Ivaylo
13 Jul, 2006
New York City

Asian stocks sank Thursday led by broad losses on U.S. markets, with exporters including Toyota Motor and Canon Inc. reporting some of the largest declines in Japan, while Shanghai shares dropped nearly 5% to lead regional losers. The Hang Seng Index in Hong Kong also fell as well as the Kospi of South Korea and Australia benchmark S&P/ASX 200.

[R]7:30AM Asian markets fall spurred by U.S. losses and oil worries.[/R]
Asian markets closed lower on Thursday. The Nikkei 225 shed 0.99% to close at 15,097.95. Toyota Motor dropped 2.02% after the Asahi newspaper reported that the automaker intends to revise its domestic sales target downward. Honda Motor losses were restricted to 0.56% after announcing Thursday that its North American sales were better than expected and domestic sales were on target. Among electronics exporters, Canon Inc. fell1.92%, while Toshiba Corp shed 2.07%.

Hong Kong''s Hang Seng Index shed 1.31% to 16,305.48. The China Enterprises Index of Hong Kong-listed mainland companies fell 1.44%. HSBC Holdings, the largest stock in Hong Kong by market capitalization, declined 1.16%. South Korea''s Kospi index edged down 0.9%, while Australia''s benchmark S&P/ASX 200 sank 0.85%. China''s benchmark Shanghai Composite Index declined 4.8% to settle at a two-week low of 1,655.77. Concerns about impending policy tightening combined with selling pressure ahead of a flood of upcoming IPOs to trigger the losses.

[R]6:30AM Europe declines on higher oil prices and geopolitical concerns.[/R]
European markets were lower by mid-morning trading. The U.K. FTSE 100 index lost 0.7% at 5,818, the German DAX Xetra 30 index declined 1.3% at 5,563 and the French CAC-40 index declined 1.1% at 4,885. Britain insurance company Aviva attracted the attention. The company was partially responsible for the insurance sector decline. It traded 1% lower following its statement that it would place shares to partly finance its $2.9 billion purchase of U.S. insurance company AmerUs.

Emap fell 7.2% after the UK media group warned that underlying first half revenues were likely to drop and that trading conditions were likely to remain difficult. Swedish technology company Ericsson shed 0.9%, having announced that jointly owned mobile phone venture, Sony Ericsson, produced a 91% rise in second-quarter net income but average selling price dropped slightly sequentially in the quarter.

German subscription TV provider Premiere AGbucked the downtrend, soaring 23% in the wake of its announcement that it has agreed a deal to market Arena, a new TV channel for the German Bundesliga soccer league, to its cable TV customers.

Oil prices hit a record Thursday as an escalation of violence in the Middle East triggered concerns about stability in the region. Light, sweet crude for August delivery rose 93 cents to $75.88 a barrel. Gold bullion opened Thursday at a bid price of $650.10 a troy ounce, down from $653.40 late Wednesday.

The euro was higher nominally against the dollar Thursday, even though the prospect of higher European interest rates kept gains for the European currency at bay. The euro bought $1.2701 in afternoon European trading, up from $1.2699 in New York late Wednesday. The British pound dropped to $1.8335 from $1.8343 while the dollar fell to 115.43 Japanese yen from 115.52 yen as traders took the opportunity to buy the currency at a cheaper price before an expected interest rate increase from the Bank of Japan.

[R]5:00AM Geopolitical worries push gold prices up.[/R]
August gold closed at $651.20 an ounce on Wednesday, up $8.10. During the session the contract hit its highest level in six weeks at $657. September silver contract setttled 0.5 cent higher at $11.555 an ounce. During the session the contract reached $11.82, its highest level since June 7. October platinum settled $13.60 higher at $1,267.60 an ounce while September palladium closed 95 cents higher at $329.95 an ounce. The most-traded September copper contract ended up 3 cents at $3.6650 per pound.

The August crude oil contract advanced 84 cents to a high of $75.05 before falling back to close just below that level at $74.95, up 79 cents. August heating oil finished up 0.78 cent at $2.0184 a gallon. August gasoline finished up 6.34 cents at $2.2559 a gallon. On the New York Board of Trade, July Arabica coffee futures settled up 0.20 cent at 98.55 cents a pound while September gained 0.15 cent to 99.95 cents a pound. Futures on raw sugar in foreign ports for October ended down 0.30 cent at 16.27 cents a pound and March declined 0.26 cent at 16.68 cents a pound.