Asia Stocks Trade Mostly Weaker
Renewed concerns about global growth soured market sentiment in Asia on Tuesday, notably weighing on commodity, construction and shipping firms.
South Korea’s Kospi fell 0.6%, Australia’s S&P/ASX 200 index lost 0.3%, and the Shanghai Composite Index retreated 0.4%, languishing at multi-year lows.
Hong Kong’s Hang Seng Index edged down 0.1%, while Japan’s Nikkei Stock Average ended the day up 0.3%, after moving between gains and losses through the session.
“Investors are sidelined at the moment. All the major central banks have eased [monetary policy], and I think in the short term all the good news has likely come out,” said First Shanghai Securities strategist Linus Yip.
“There’s still lots of uncertainty,” he said. For investors to consider pushing markets out of current ranges “we will have to check what’s happening in the euro zone and whether there will be more policy moves from China.”
Europe’s troubles came back in focus on Monday after the release of softer-than-expected German business confidence data and amid more concern about Greece’s finances, pushing Wall Street to a lower close. See: EU confusion drags on stocks.
Also dragging on sentiment, U.S. bellwether construction-machinery major Caterpillar Inc. cut its yearly earnings forecast late Monday, saying it expects modest economic growth in the next few years.
Japanese construction firms lost ground on Tuesday, with Kawasaki Heavy Industries Ltd. down 1.8%, and Komatsu Ltd. falling 1%.
Shipping firms fell in South Korea, with STX Pan Ocean Co. losing 3.9%, and Hanjin Shipping Co. down 1.6%.
A drop in some key commodities on growth concerns likewise hurt some shares, as New York benchmark crude-oil futures ended at a seven-week low Monday, and gold futures also sold off. See: Oil futures fall back with debt crisis in focus and Gold falls nearly 1%.
Rio Tinto Ltd. retreated 1.8% while gold miner Newcrest Mining Ltd. gave up 1.3% in Australian trade after it was downgraded to neutral at J.P. Morgan.
Commodity firms were dragging in Hong Kong as well, with Zijin Mining Group Co. , another gold extractor, down 1.6%, and Aluminum Corp. of China Ltd. falling 1.6%.
Italian fashion group Prada SpA dropped 2.6% in Hong Kong after it reported a 59% increase in first-half profit but as revenue growth slowed from the previous quarter.
Emerging-markets-focused banking group Standard Chartered PLC fell 2.6%, following a Financial Times report that Singapore’s sovereign wealth fund Tenmasek Holdings Pte. may sell off its stake.
On the plus side, casino operator Sands China Ltd. rose 1.2% as investors positioned ahead of China’s Golden Week holiday next week that may lead to an influx into Macau’s casinos.
Similarly, retailers also gained amid some expectations that spending will increase over the holiday week, with apparel firm Esprit Holdings Ltd. rising 0.6% ahead of results due later this week.
“After or before the Golden Week holiday there may be more activity” in Hong Kong-listed retailer and casino shares, said First Shanghai Securities’ Yip.
Yip also said market volume appeared to be broadly decreasing in Hong Kong ahead of the holiday, while a rollover of the futures market set for Thursday could lead to some volatility in the market.
In Tokyo trading, Sharp Corp. shares ended a choppy session with a 0.5% gain.
The firm plans to slash a total of 10,966 employees in Japan and overseas, while selling its assets to generate 213.1 billion yen ($2.7 billion) by the end of next March. according to the company’s restructuring plan obtained by Kyodo News.
Marketwatch
