Mixed trading was witnessed among the major markets across the Asia-Pacific region, taking cues from the Wall Street, where the major indices ended mixed on Monday, as traders paused to take profits. Concerns that recent gains in the market were excessive and do not reflect the intrinsic value of stocks and apprehensions over the pace and the magnitude of economic recovery impacted market movement. However, the Indian market turned in a particularly strong performance on optimism about economic reforms and pre-budget announcements from the new Government.
Japan's Nikkei 225 Average opened sharply lower at 9,824 compared to its previous close of 9,866. The strengthening of the local currency against the U.S. greenback and weak trading across the other Asian markets on valuation concerns also influenced trading, as investors preferred to lock in profits on their recent gains and retreat to the sidelines ahead of a few key economic numbers due out later in the week both in the U.S and China. The index ended with a loss of 78.81 points or 0.80% at 9,787. The broader Topix Index of all first section issues also edged lower to 918, a loss of 8.65 points, or 0.9%.
On the economic front, the Cabinet Office revealed that the government's key measure of the state of the economy, reflected by the composite index of coincident economic indicators, rose for the first time in 11 months in April to 85.8, up 1 point from March. The Cabinet Office further noted that the government maintained its overall assessment of the economy as "showing deterioration" but added that "there are signs it has stopped contracting."
Insurance stocks declined after a newspaper report revealed that the proposed merger of Nipponkoa Insurance with Sompo Japan Insurance might face stiff opposition. Shares of Nipponkoa slumped 4.6% while shares of Sompo Japan Insurance fell 3.1%. Other major insurance stocks also ended weaker.
Trading houses, automakers and exporters also slipped following the strengthening of the local currency against the U.S. greenback. Canon edged down 0.30%, Sony Corp slipped 0.92%, Honda Motors lost 1.38%, Toyota Motor fell 1.79%, and Mitsui & Co shed 3.68%.
Financial stocks ended weaker ahead of an impending announcement by the U.S. government today regarding the list of banks that are eligible for repaying the TARP funds to the Treasury. Mitsubishi UFJ lost 3.1% and Mizuho Financial Group fell 3.2%, and Sumitomo Mitsubishi shed 2.60%.
Chip equipment makers advanced after Texas Instruments boosted its earnings guidance for the second quarter. Advantest Corp. edged up 0.32% and Tokyo Electron advanced 2.12%.
Australia's All Ordinaries Index opened at 3,959, slightly lower than its previous close at 3,969, but it moved above the unchanged line on recovery hopes. However, a drop in copper prices in the international market led resource stocks lower, pulling down the index into negative territory amid volatile trading. The index ended down at 3,934, representing a loss of 35.40 points or 0.89%. The benchmark S&P/ASX 200 Index followed a similar trend and ended lower at 3,935, a loss of 36.30 points or 0.91%.
Resource stocks dragged down the markets on lower copper prices in the international market. BHP Billiton, the world's largest mining company, lost 4.40% and its rival Rio Tinto shed 2.59%. Fortescue Metals slipped 2.20% and Iluka Resources fell 1.46%. Gold stocks also ended weaker on lower gold prices.
In the banking space, ANZ Bank edged up 0.61%, Commonwealth Bank advanced 1.31%, and Westpac Banking gained 0.61%. However, National Australia Bank bucked the trend and ended down 1.14%.
In Hong Kong, the Hang Seng Index opened sharply higher at 18,451 compared to its previous close of 18,253, but it slipped below the unchanged line on increasing concerns about the valuations of stocks that rallied in the past few session. The index ended with a loss of 195 points or 1.07%, at 18,058.
Property, financial and china-related stocks ended in negative territory on profit taking and concerns of over-valuation. All financial stocks also ended weaker ahead of the news from the U.S. regarding the list of banks that would be eligible for the repayment of TARP funds to the Treasury. HSBC Holdings edged down 0.085%, Hang Seng Bank lost 1.31%, BOC Hong Kong fell 3.98% and Bank of China was down 0.57%.
In South Korea, the benchmark KOSPI Index ended in negative territory on concerns about the pace of the global economic recovery. Institutional investors continued to offload blue-chip stocks on profit taking amid weak global cues. After opening strongly higher at 1,407 compared to its previous close at 1,393, the market slipped below the unchanged line. Weak Asian markets and lower commodity prices also impacted sentiment as institutional investors preferred to take profits and sold blue chip stocks. The index ended with a loss of 21.46 points or 1.54% at 1,372.
In India, the stock market ended sharply higher, bucking the weak sentiment prevailing across the other Asian markets. Optimism about the continuation of economic reforms at a faster pace and pre-budget announcements from the new government helped lift the market. The BSE Sensex gained 461.08 points or 3.14% to close at 15,127, and the broader Nifty Index advanced 2.73% or 121.05 points to close at 4,551.
Among the other major markets in the region, China's Shanghai Composite Index ended higher by 19.55 points or 0.71% at 2,787, Strait Times Index in Singapore gained 16.17 points or 0.69% to close at 2,350, and Indonesia's Jakarta Composite Index added 36.65 points, or 1.78% to close at 2,093. However, the Taiwan Weighted Index slipped 3.22% or 213.63 points, to close at 6,414. |