Asian markets depressed on lack of direction

Worries about a persistent slowdown in the Chinese housing market affect overall sentiments



Asian markets mostly ended in negative territory as the lack of clear direction from the overnight US stocks, lower commodity prices in the early Asian trades and worried about a persistent slowdown in the Chinese housing market affected the overall sentiments. Better than expected results from Alcoa that kick started the earnings season in the US failed to enthuse the market and so did the pick up in the DOW futures in the electronic session today. The stocks ended lower as traders preferred to cut longs after a spell of exuberance in the last week. Crude and other commodities rebounded in the last hours of the session but failed to lift the sentiments in the equities much as the markets drew near to closing bells.

The Japanese stocks closed in red as by resources slipped and an overall weak undertone in Asia hurt the sentiments. The benchmark Nikkei 225 Index fell 10.88 points, or 0.1%, to 9537, while the broader Topix index of all First Section issues fell 3.31 points, or 0.4%, to 854. Markets have been eying the barometer Nikkei to surpass 10000 mark levels but the index has not been able to sustain above it.

On the economic front, final data released by the Ministry of Economy, Trade and Industry revealed that industrial production recorded a 0.1% monthly growth in May, compared to the initial estimate of a 0.1% decline reported previously. On year-over-year basis, industrial production surged 20.4%, the data noted.

Australian stocks dropped for the first time in four sessions as miners slid on early weakness in Copper prices and worries that China growth concerns may have a negative effect on the exports of raw materials like iron ore and copper. The benchmark S&P/ASX200 Index ended at the day's low, dropping 29.6 points, or 0.7 percent, at 4380.3 points, while the broader All Ordinaries Index lost 29.5 points, or 0.7%, to 4400 points.

Chinese stocks underwent a swift correction; sliding right from the start as traders sold property developers and financials after the government said it would continue to rein in speculation in the country's red-hot property sector. China's key Shanghai Composite Index closed down 1.6% to 2,450.3 points, recording its biggest single-day percentage fall in two weeks. It closed up 0.8 per cent on Monday, supported by optimism that the government was relaxing property tightening policies.

Chinese banks should "strictly implement" existing curbs on loans to multi-home buyers, the China Banking Regulatory Commission (CBRC) said on Tuesday. State Council's policies to rein in rapidly soaring housing prices in cities will continue and local governments should implement them "unswervingly", according to a statement released Monday from the Ministry of Housing and Urban-Rural Development.

In Mumbai, the key benchmark indices extended gains to hit fresh intraday highs in late trade as European stocks and US index futures jumped. The S&P CNX Nifty hit its highest level in more than 29 months. Realty shares jumped in late trade on speculation the government will soon announce a hike in foreign direct investment (FDI) in the real-estate sector. But, IT stocks fell as Infosys warned that the global economic environment continues to be uncertain, even though the company raised its full-year revenue and profit forecasts at the time of announcing Q1 June 2010 results today. Banking and capital goods stocks rose.

The BSE 30-share Sensex was provisionally up 46.02 points or 0.26%, up close to 130 points from the day's low and off close to 15 points from the day's high. As per provisional figures, the BSE 30-share Sensex was up 46.02 points or 0.26% at 17,983.22. The index fell 81.35 points at the day's low of 17,855.85 in early afternoon trade. The Sensex rose 60.84 points at the day's high of 17,998.04 in late trade. The S&P CNX Nifty was up 19 points or 0.35% at 5,402 as per provisional figures.

In other markets, Hang Seng in Hong Kong dropped 0.18%, Straits Times in Singapore edged up 0.12% while TSEC in Taiwan shed 0.55%.

DOW futures pared their moderate losses and rallied nearly 50 points as investors eyed at a rebound in commodity prices and upbeat development on the Eurozone debt front. Moody's cut Portugal's credit rating casting fresh doubt on the country's ability to weather its debt crisis but the successful placement of the Greece treasury papers supported the sentiments. Crude oil also rebounded after the International Energy Agency said today that the global oil demand would increase by 1.6% in 2011. Gold also rose as a break above $1200 bought back the investment demand.