Asian Market Update by TradeTheNews staff

Discussion in 'Trading' started by TradeTheNews, Mar 14, 2007.

  1. TradeTheNews

    TradeTheNews ET Sponsor

    Asian Market Update: Bargain hunters stay on the sidelines as risk aversion dominates trading

    - Asian Equities: The Nikkei 225 is lower by about 3%, tracking declines in U.S. equities on subprime concerns. The Nikkei did not rebound off session lows despite a slight weakening of the yen, as bargain hunters remained on the sidelines. Declines on the Nikkei were driven by shares of exporters and commodity related shares on fears of a U.S. slowdown. Shares of Mitsubishi Heavy rose after it received two orders worth about ¥600B. All 33 sectors on the Topix are in negative territory. The Kospi is lower by more than 1.75%, with declines being led by Samsung due to its exposure to US markets. Shares of Posco Steel also fell in tandem with sharp declines in metal prices. The Hang Seng is lower by more than 2.5% and for the second consecutive session with declines being led by shares of China Mobile and HSBC. The ASX 200 index is lower by close to 2% and holding near session lows. Declines on the index are being led by mining shares and James Hardie and Rinker due to their exposure to the U.S. housing market. Chinese equities are lower by more than 2.0%. Taiwan equities are lower by more than 1.7%, with technology shares tracking losses on the Nasdaq.

    - Australia March Westpac Consumer Confidence: 3.7% v 1.7% prior (19 month high). Consumer sentiment boosted by stabilizing interest rates, lower gas prices and strong labor market conditions.

    - Equity trading impact on forex: While equity markets remain volatile and uncertain, currency traders will keep a close eye on the global equity market as a barometer of investor confidence and risk appetite. High yielding currencies trade down as risk aversion becomes the driving theme of forex trading. The USD was trading mixed against the European majors. USD/JPY briefly dipped below 116.00.

    - Domestic consumption remains strong in China: (CH CHINA FEB RETAIL SALES YTD YOY: 14.7% V 14.8% expected). Central bank governor Zhou said that growth in China's consumer price index in recent months has been comparatively high. WestPac analysts released a note saying they expect the Chinese to tighten its reserve ratio by 50bps in the next two weeks.

    - Taiwan Central Bank says it may intervene in currency markets to maintain order: The bank added that they expect Taiwan CPI to rise in H2. Yesterday the Taiwan Central Bank said that interest rates may be approaching their peak.

    - Commodities: Crude oil and spot gold are sharply lower in Asian trading on expectations for slower global economic growth. Spot gold is off by more than 1% and below $642, with crude oil dipping below the $58 level. Tokyo Gold opened down by its daily limit of ¥60, tracking declines in the USD/JPY pair. Shanghai copper is sharply lower, tracking declines in the LME contract and on concerns that the PBoC may seek to further tighten monetary policy in order to slow China's economic growth.