Asian markets mixed, Europe fears weigh
A man watches an electronic stock indicator in Tokyo on Monday, May 14, 2012. Asian stocks endured losses, although one notable exception was Japan, where the benchmark Nikkei 225 index rose 0.23 percent to close at 8,973.84. AP PHOTO/SHIZUO KAMBAYASHI
HONG KONG—Asian markets were mixed in choppy trade Monday amid fears over political uncertainty in Europe while China’s move to boost liquidity in the slowing economy was unable to provide a lift.
The euro also continued to face pressure as Greek politicians failed again to form a government amid fears it could end up leaving the eurozone while Angela Merkel’s party was beaten in a local German poll.
Tokyo closed 0.23 percent, or 20.53 points, higher at 8,973.84 while Sydney added 0.28 percent, or 11.9 points, to 4,297.0.
Seoul closed 0.18 percent lower, easing 3.40 points to 1,913.73.
Hong Kong ended 1.15 percent, or 229.59 points, lower at 19,735.04 and Shanghai fell 0.60 percent, or 14.26 points, to 2,380.73.
Markets have suffered heavy selling pressure after pro-austerity parties were kicked out of government in France and Greece on May 6 in a backlash against the swingeing cuts put in place as part of moves to balance budgets.
The Chinese central bank on Saturday said it would cut its reserve requirement ratio (RRR) by 50 basis points to boost liquidity in the world’s No. 2 economy after data last week pointed to a slowdown.
The move had been expected after official figures Friday showed industrial production growth slumped to a three-year low in April, while on Wednesday the government said import growth was almost stagnant and exports were also weak.
Economists had been calling for Beijing to introduce monetary loosening measures as a string of data at the start of the year showed the economy was easing.
China’s economy grew an annual 8.1 percent in the first quarter of 2012, its slowest pace in nearly three years.
The country’s leaders had already cut the RRR twice since December in a bid to spur lending and growth.
“The RRR cut last weekend suggests that policymakers were fighting back to defend the growth. To win the battle, policy fine-tuning would have to be upgraded to aggressive easing,” said Citigroup strategist Minggao Shen.
Regional trading remains uneasy as efforts to form a coalition failed for a fourth time at the weekend, leading Greek President Karolos Papoulias to call a final meeting for Monday.
If the crunch talks also end without a deal he will call fresh elections, which could lead to more gains for anti-austerity groups, which many fear could lead the country out of the eurozone.
Voters earlier this month punished ruling parties who had introduced severe cuts to public services demanded by the European Union and International Monetary Fund in return for multibillion-euro bailout loans.
“The lack of transparency, particularly in Europe, with the possibility of Greek re-elections in mid-June, is a worry that looks to remain with us for the time being,” said Monex market analyst Toshiyuki Kanayama.
“And that will keep the investor bias to the downside,” he told Dow Jones Newswires.
In Germany the party of Chancellor Angela Merkel – the main proponent of swingeing austerity measures to rebalance the region’s economies – suffered a severe defeat Sunday in a pivotal German state vote.
The poll in North Rhine-Westphalia, the country’s most populous state and a guide to future German elections, handed her conservatives their heaviest loss ever, raising questions about her chances of re-election in 16 months.
It also comes days before she hosts French president-elect Francois Hollande who won on a platform of growth over cuts and a promise to renegotiate the eurozone’s fiscal pact for tighter budgetary rigor.
In afternoon trade the euro stood at $1.2876 and 103.18 yen in Tokyo, from $1.2921 and 103.26 yen in New York late Friday.
The dollar was at 80.13 yen, from 79.93 in New York.
The Australian dollar also slipped below parity with the greenback for the first time since December as traders moved out of riskier assets.
The Aussie dipped to 99.90 US cents in late trade.
On oil markets New York’s main contract, West Texas Intermediate crude for delivery in June was down $1.25 to $94.88 per barrel while Brent North Sea crude for June shed $1.54 cents to $110.72 in late trade.
Gold was at $1,562.76 an ounce at 1030 GMT, compared with $1,581.30 late Friday.
In other markets:
— Taipei fell 0.33 percent, or 24.19 points, to 7,377.18. Leading smartphone maker HTC lost 1.16 percent at Tw$425.0.
— Manila fell 1.44 percent, or 74.52 points, to 5,083.62.
Metropolitan Bank and Trust Co. fell 2.29 percent to 85 pesos while SM Investments slipped 3.59 percent to 680 pesos. Universal Robina fell 0.81 percent to 67.20 pesos.
— Wellington closed 0.21 percent, or 7.29 points, to 3,555.36.
Contact Energy added 0.42 percent to NZ$4.82, Telecom climbed 1.35 percent to NZ$2.63 and Fletcher Building added 2.29 percent to NZ$6.26.
— Singapore closed down 0.67 percent, or 19.28 points, to 2,864.12.
Real estate developer Capitaland shed 2.93 percent to Sg$2.65 while oil rig maker Keppel Corp. was down 1.47 percent at Sg$10.09.
— Kuala Lumpur shares ended 0.58 percent lower, or 9.24 points, at 1,575.08.
YTL Power International lost 4.8 percent to 1.58 ringgit, British American Tobacco eased 3.0 percent to 51.80 and MMC Corp shed 2.9 percent to 2.65.
— Jakarta shares ended down 1.48 percent, or 61.07 points, at 4,053.06.
Hero Supermarket slid 8.86 percent to 3,600 rupiah, cement maker Gresik lost 3.1 percent at 10,950 rupiah, and Telkom fell 2.4 percent at 8,000 rupiah.
— Bangkok fell 2.14 percent, or 25.50 points, to 1,165.51.
PTT lost 1.79 percent to 330 baht, while Banpu dropped 1.53 percent to 516 baht.
— Mumbai was down 77.14 points, or 0.47 percent, to a near four-month-low of 16,215.84 and its fifth straight day of losses.
India’s top property firm DLF fell 2.64 percent to 182.35 rupees while vehicle maker Tata Motors fell 2.42 percent to 290.2.
Originally posted: 11:25 am | Monday, May 14th, 2012
