Asia Finishes Lower on U.S. Market Data

Ivaylo
16 Mar, 2007
New York City

Asian stocks ended mostly lower Friday, with Japanese stocks dipping as investors struggled with U.S. market data and its influence on exports. Japanese export-related shares turned in a mixed performance. Sony ended in positive territory, while Toyota Motor failed to hold afternoon gains. All regional markets ended lower, only Taiwan bucked the trend and advanced.

[R]9:00AM Asian markets ended lower on Friday on a higher-than expected U.S. inflation.[/R]
Asian markets ended lower on Friday. The Nikkei 225 index ended 0.7% lower, trimming 116.24 points to close at 16,744.15. Shares of Nissan Motor ended 0.9% lower in volatile trading after a daily reported the company would cut production at two car assembly plants by up to 20% for three months from April. In other Tokyo trading, shares of Toyota Motor fell 0.7%, while Honda Motor fell 1.5%.

Shares of Mizuho Financial Group fell 2.3%. Its subsidiary had agreed to sell its entire holding in Nikko Cordial to Citigroup at the tender offer price of 1,700 yen a share. Weakness in banking shares also spread to Mitsubishi UFJ Financial Group shares, which dipped nearly 3%, while Sumitomo Mitsui Financial Group closed down 2.8%. JVC, rose 0.5% on reports Matsushita Electric Industrial is finalizing a deal to give priority negotiating rights for its shares in the electronics subsidiary to U.S. private equity firm TPG. The deal is reportedly worth 80 billion yen, or $682 million

Hong Kong Hang Seng Index ended 0.1% lower at 18,953.50. In China, the Shanghai Composite Index shed 0.7% to end at 2,930.48. Cellphone maker Foxconn gained 5% after UBS recommended investors buy the stock on an improving earnings outlook and recent declines in the share price. Cellular operator China Mobile rose 2.9%.New World Developmentled decliners among Hong Kong large-caps, declining 3.1% after reporting a 35% drop in first-half net profit owing to slim property sales in Hong Kong

Elsewhere in the region, Australia S&P/ASX 200 fell 0.3% to 5,836.30 and Seoul Kospi rose 0.7% to close at 1,427.88. Taiwan Weighted Price Index bucked the trend and gained 0.3% to finish at 7,719.80.

[R]8:00AM NY-7:00PM Mumbai Sensex ends lower Friday, Reliance helps cut down losses.[/R]
The Sensex on BSE finished 113.45 points, or 0.9%, lower at 12,430.40. The market-breadth was negative as there were two decliners for every advancer. For 817 stocks that advanced on BSE, 1,738 declined and 64 remained unchanged. Of the 30 stocks in the Sensex, five advanced and 25 declined. The turnover on BSE was Rs 3,608.60 crore, lower than Rs 3,834.63 crore on Wednesday. The turnover on NSE was Rs 7,058.77 crore, lower than Rs 7,776.71 crore onWednesday.

Economic news

Inflation jumped to 6.46% in the week ended March 3, as against 6.10% a week ago as vegetables became more expensive and so did cement, whose prices were raised by manufacturers after the Union Budget 2007-08. Vegetable prices soared by 7% and cement became expensive by 4.4%, showed the official data, the latest after the budget, which imposed dual excise duties to rein in cement prices.

Finance Minister P Chidambaram on Friday confirmed that the Union Budget and the Supplementary Grants commended to the Lok Sabha were passed by the voice vote despite loud protests by the Opposition parties, led by Bharatiya Janata Party. Finance Minister P Chidambaram said on Friday the government had asked the central bank to take monetary steps necessary to keep price stability.

The rupee ended higher as banks sold dollars expecting tighter liquidity and as dollar demand from importers was weak.The rupee finished higher at Rs 44.11 against its previous close of Rs 44.20.

IPO

Raj Television Network a regional broadcaster and media company, settled at Rs 225.95 on BSE, a discount of 12% over the IPO price of Rs 257. Another debutant stock, Page Industries, the exclusive licensee of Jockey brand of innerwear, settled at Rs 282.20, a discount of 21.6% over the IPO price of Rs 360.

Trading highlights

MindTree was the most-active stock with a turnover of Rs 468 crore followed by debutant Raj Tele and Reliance Industries.

Advancers

Tata Motors rallied over 3% to Rs 749. Ranbaxy gained 1.6% at Rs 316. Index heavy Reliance Industries and Dr.Reddy''s were up over 1% each to Rs 1,300 and Rs 682, respectively. Strong performance from Reliance Industries supported the market in late trade. Reportedly, Reliance it was close to signing a deal for 59% stake in a $20 billion joint venture with US-based Dow Chemical Company.

Decliners

Reliance Communications shed 3.5% to Rs 377. Bharti Airtel was down 1.5% to Rs 716.50, after the stock moved between positive and negative territory. Telecom shares were impacted by concerns of increased competition after Vodafone, on Thursday, reached a partnership agreement with Essar. Larsen & Toubro plunged 3% to Rs 1,449.

BHEL and Hero Honda tumbled 2.5% each to Rs 1,956 and Rs 652, respectively. Maruti and Gujarat Ambuja slipped over 2% each to Rs 779 and Rs 104, respectively.

Banks declined but countered intra-day losses HDFC Bank shed 1.3% to Rs 905, but was off the session low of Rs 890. The State Bank of India shed 0.8% to Rs 914, and was off the session low of Rs 845. ICICI Bank was down 1.8% to Rs 807, up from the session low of Rs 802.

[R]7:00AM European stocks declined Friday ahead of key U.S. economic data.[/R]
European markets were lower on Friday. In morning trade, the German DAX 30 index fell 0.7% at 6,541.86, the French CAC 40 index lost 0.7% at 5,354.86 and the U.K. FTSE 100 index gave up 0.6% at 6,096.30.

Advancers

French electronics group Thomson added 3.1% after it was upgraded to buy from neutral at Merrill Lynch, which said the core business of the group is finally coming to the fore. Unilever added to the previous session gains. Its shares advanced 2.3% in London, after an investor presentation earlier in the week got a favorable response.

Among mid-caps, France Zodiac rose 3.6% after it reported an 8.5% rise in revenue to 1.18 billion euros for the six-months to Feb. 28, as positive trends in the civil aviation markets helped its aerosafety systems and cabin interiors units.

Decliners

Of oil stocks, BP, the second biggest oil company in the region, dropped 1.1%. Shell, Europe biggest oil company, lost 1.2%. OMV AG, Central Europe biggest oil company, retreated 2.8%.

Commodity stocks were weak. Arcelor Mittal lost 1.1% in Paris as U.K.-listed miners Anglo-American and Antofagasta both lost more than 1%. BHP Billiton, the world biggest mining company, dropped 0.4%.

Banks also sank. HSBC dropped 1.1%. Pretax profit in North America plunged 87% in the second half, forcing Chief Executive Officer Michael Geoghegan to fire senior managers and tighten lending rules. Royal Bank of Scotland Group., which owns Citizens Financial Group in the U.S., declined 1.5%.
Oil and gold
Crude oil rose on expectations among some traders and brokers that demand for fuel will grow. Crude oil for April delivery rose 24 cents at $57.79 a barrel in electronic trading on the New York Mercantile Exchange in early trade in London. Brent crude for May settlement rose 10 cents to $60.78 a barrel in electronic trading on the ICE Futures exchange in London. Gold opened Friday at a bid price of $646.70 a troy ounce, down from $647.75 late Thursday.
Currencies
The euro climbed above $1.33 on Friday, with the U.S. dollar apparently pushed down by comments from former Federal Reserve Chairman Alan Greenspan on the economic implications of the troubles plaguing lenders of risky mortgages. The euro bought $1.3307 in morning European trading, up from $1.3237 in New York late Thursday. The British pound rose to $1.9424 from $1.9364. The dollar also lost ground against the Japanese yen, sliding to 116.84 yen from 117.62 yen.

[R]5:00AM Gold and silver advanced on Thursday on global market stability.[/R]
April gold gained $4.60 to $647.10 a troy ounce on the New York Mercantile Exchange and May silver also advanced 24.5 cents to $13.075. April platinum ended up $14.70 at $1,215.70 an ounce while June palladium declined $1.80 to $351.70 an ounce. The most-active May copper contract added 16.20 cents to settle at $2.9880 per pound.

April crude oil finished down 61 cents at $57.55 a barrel, while April heating oil settled down 2.05 cents at $1.6885 a gallon. April gasoline ended down 4.67 cents at $1.8816 a gallon, as well as April natural gas which finished down 12.4 cents at $6.959 per million British thermal units.

On the New York Board of Trade, May Arabica coffee futures settled up 0.70 cent at $1.1055 a pound, with July up 0.65 cent at $1.1340. Futures on raw sugar in foreign ports dropped but pared a sell-off to five-week lows. May settled down 0.18 cent at 10.23 cents a pound, with July off 0.15 cent at 10.13 cents.