Japan, China Continue Slide

Ivaylo
01 Mar, 2007
New York City

Asian market closed mostly lower on Thursday, with China and Japan, leading the decline. The fall slowed down significantly, though, from the previous session sell-off and prompted that the drop from the recent market turmoil may be short-lived. Investors were wary Thursday amid worries about the state of the U.S. economy following remarks from former Fed Chairman Alan Greenspan earlier in the week. Shares in HK and Taiwan also fell.

[R]9:00AM Asian markets mostly declined Thursday with Japan and China lower.[/R]
Asian markets finished lower on Thursday. Japanese Nikkei 225 Stock Average closed 0.86% lower at 17,453.51. The decline tracks a 515.80-point dive on Wednesday, which the biggest point decline since June 13. China shares dropped after Wednesday near 4% rebound in the Shanghai Composite with some investors selling into Wednesday recovery in the runup to the China National People Congress. The Shanghai Composite Index ended 2.9% lower at 2,797.19.

Ping An Insurance surged 38% in its market debut on strong demand for new shares, but other financial stocks fell as funds shifted to the insurer. ICBC, China biggest lender by assets, dropped 2.75% and China Life Insurance shed 5%. In Hong Kong, the Hang Seng Index also declined 1.55% to finish at 19,346.60. Taiwan finished down 2.8% at 7,678.67 in heavy volume to close at its lowest level since Jan. 11, following Wednesday global losses when the local market was closed.

Malaysia KLSE Composite shed 1.3% to 1,180.91. Australia S&P/ASX 200 swung from early gains and closed 0.38% lower at 5,810.20, with investors taking to the sidelines on concerns of further drops in China. Markets in South Korea were closed on Thursday for a public holiday.

[R]6:30AM Europe rebounds Thursday as financial stocks gain ground.[/R]
European markets were modestly higher on Thursday. Frankfurt Xetra Dax was up 0.5% to 6,747.46, the CAC 40 in Paris was 0.5% higher at 5,542.31 and London FTSE climbed 0.8% to 6,222.7.

Advancers

Swiss Re advanced 4.5% after the reinsurer reported full-year net profit increased twice on lower claims and the acquisition of the reinsurance division of General Electric. Munich Re, whose in-line results were overlooked in the sell-off the previous session, gained 0.8% after a price target upgrade by Lehman Brothers.

A number of emerging markets mounted rallies, helping lift the financial stocks with the most exposure to them. Raiffeisen International and Erste Bank, the Austrian rivals, both of which have operations across central and eastern Europe, gained 3.6% and 3.4% respectively.

Recent pledges on renewable energy sources helped lift producers of solar energy equipment. Renewable Energy Corp, the Norwegian maker of solar panels, gained 4.4%, while German rival Q-Cells gained 2.8%. Acciona, the Spanish builder and investor in wind energy, gained 2.2%. Eon, the German group whose 41 billion euros bid for Endesa now looks to be in some doubt, edged 0.4% higher.

Decliners

Deutsche Telekom declined 2.3% after posting a 43% drop in full-year net profit and reducing forecasts for core earnings this year. The company announced it would help drive future growth through foreign acquisitions, possibly part funded by the sale of non-core European assets.

Oil and gold

Oil prices declined slightly Thursday as traders responded to gains a day earlier caused by a report showing dropping U.S. crude inventories. Crude oil for April delivery fell 11 cents to $61.68 a barrel in electronic trading on the New York Mercantile Exchange. Gold opened Thursday at a bid price of $668.80 a troy ounce, down from $680.60 late Wednesday.

Currencies

The euro was stronger against the U.S. dollar on Thursday as some markets in parts of the world appeared to shake off a slump earlier this week. The euro bought $1.3233, compared with the $1.3216 it bought in New York late Wednesday. The British pound edged up Thursday to $1.9605 from $1.9594. The dollar rose to 118.39 Japanese yen from 118.12 yen.

[R]5:30AM Gold and silver decline on Wednesday, while corn gains.[/R]
March corn ended 14.25 cents higher at $4.2525 per bushel, May corn settled 11.25 cents higher at $4.3550, and December finished 10.50 cents higher at $4.20. May soybeans ended 8.75 cents higher at $7.8750 per bushel. May wheat gained 4.50 cents to $4.88 per bushel.

April gold declined $14.70 to $672.50 a troy ounce on the New York Mercantile Exchange. May silver shed 45.5 cents to $14.235. April platinum settled up $3.10 at $1,256.40 an ounce, while June palladium closed steady at $356.60. The May copper contract lost 7.30 cents to close at $2.7520 per pound.

The front-month April crude oil contract advanced 33 cents to finish at $61.79 a barrel. Front month March gasoline gained 3.15 cents to end at $1.8476 a gallon and front month March heating oil settled up 0.11 cent at $1.7804 a gallon. April natural gas bucked the trend and finished 23.3 cents lower at $7.300 a million British thermal units.

On the New York Board of Trade, March Arabica coffee futures settled up 0.40 cent at $1.1770 a pound, with May up 0.20 cent at $1.1850. Futures on raw sugar in foreign ports for March settled down 0.14 cent at 11.31 cents a pound, with May down 0.24 cent at 10.56 cents.