Asian markets slip as central bank rally fizzles

An investor looks at the stock price monitor at a private securities company Friday Sept. 21, 2012 in Shanghai, China. China’s benchmark Shanghai Composite Index added 0.1 percent to 2,027.03 as Asian stock markets rebounded Friday, led by oil and technology shares, despite uncertainty about the fragile global economy. (AP Photo)

HONG KONG—Asian markets mostly fell Monday as the recent rally fueled by central banks’ stimulus plans petered out, while there were fears over Greece’s ability to meet requirements to get more bailout cash.

Earlier losses in China and Hong Kong were pared despite a People’s Bank of China adviser warning the mainland economy was still weak.

Tokyo was 0.45 percent down, closing 40.71 points lower at 9,069.29, while Sydney shed 0.52 percent, or 22.8 points, to close at 4,385.5 and Seoul closed flat, edging up 1.07 points to 2,003.44.

Hong Kong ended 0.19 percent lower, giving up 40.24 points to 20,694.70 while Shanghai rose 0.32 percent higher, adding 6.50 points to 2,033.19.

“Uncertainties over the overseas markets during the holiday will keep investors from building positions aggressively this week,” Dongxing Securities investment adviser Hou Yi told Dow Jones Newswires.

Global markets have been boosted in September by central bank announcements in the United States, Europe and Japan that they would buy up huge amounts of government debt to pump liquidity into their respective economies.

However, with little else to drive buying, traders on Monday cashed in the recent gains.

Investors are becoming concerned about progress between Greece and the “troika” – the European Commission, the European Central Bank (ECB) and the International Monetary Fund – over budget cuts that need to be presented by Friday, Mizuho Securities forex strategist Kengo Suzuki said.

“The risk sentiment-driven rally has begun to lose steam as profit-taking kicks in and uncertainty over Greece and Spain come back into the spotlight,” Suzuki told Dow Jones Newswires.

If Greece is unable to satisfy requirements it could be refused the next batch of cash to help it pay its bills, a move that would likely see it default.

Masafumi Yamamoto, chief currency strategist at Barclays Capital, said in a note to clients: “The prospect of the eurozone’s economic recovery is still uncertain given the global economic slowdown.”

Wall Street was unable to provide any inspiration. The Dow closed down 0.13 percent, the Nasdaq added 0.13 percent and the S&P 500 was flat.

Hong Kong and Shanghai recovered from earlier deep losses caused by a central bank adviser saying at the weekend that he saw no signs of a rebound in China, following a string of soft data on trade, investment and growth.

But the ongoing diplomatic dispute between Beijing and Tokyo over a group of islands in the East China Sea was still capping gains.

“There are still more hurdles that need to be crossed before we can say that we are out of the woods,” said Medha Samant, investment director at Fidelity in Hong Kong, adding that the market is looking to the next set of Chinese data due at the weekend.

On currency markets the euro, which had strengthened in recent weeks after the banks’ monetary easing, bought $1.2900 and 101.62 yen in early European trade, from $1.2985 and 101.42 yen in New York late Friday.

The dollar was at 78.00 yen against 78.12 yen.

Oil prices eased. New York’s benchmark contract, West Texas Intermediate crude for November delivery, was down 81 cents to $92.08 in the afternoon, while Brent North Sea crude for November dipped $1 to $110.42.

Gold was at $1,757 at 1100 GMT compared with $1,774.34 on Friday.

In other markets:

— Taipei rose 0.18 percent, or 13.71 points, to 7,768.3.

Hon Hai Precision lost 1.03 percent to Tw$95.8 while Taiwan Semiconductor Manufacturing Co. was 0.47 percent higher at Tw$86.1.

— Manila rose 0.63 percent, or 33.54 points, to 5,325.60.

Ayala Land added 2.08 percent to 24.50 pesos and Petron Corp. gained 0.38 percent at 10.30 pesos.

— Wellington was flat, nudging down 0.42 points to 3,809.15.

— Singapore closed down 0.33 percent, or 10.30 points, to 3,067.93.

Singapore Airlines fell 1.93 percent to Sg$10.66 and DBS Group shed 1.03 percent to Sg$14.35.

— Jakarta ended 1.03 percent, or 43.71 points, lower at 4,200.91.

Bumi Resources fell 19 percent to 680 rupiah, Timah dipped 3.1 percent to 1,540 rupiah and Vale Indonesia slid 6.6 percent to 2,850 rupiah.

— Kuala Lumpur dipped 0.70 percent, or 11.32 points, to end at 1,612.38.

Malayan Banking fell 1.53 percent to 9.01 ringgit, while Sime Darby lost 0.41 percent to 9.75. Scomi Group gained 4.48 percent to 0.35 ringgit.

— Bangkok fell 0.15 percent, or 1.96 points, to 1,284.30.

Oil company PTT lost 0.89 percent to 334 baht, while Banpu dropped 2.97 percent to 392 baht.

— Mumbai slid 0.42 percent, or 79.49 points, to 18,673.34.

HDFC fell 2.52 percent to 759.5 rupees, while Hindustan Unilever slid 2.16 percent to 518.10 rupees.