Asian markets ended mixed in Thursday trading in Asia as fears
over China and Europe pervaded most exchanges.
[caption id="attachment_65227" align="alignright" width="300"
caption="Tokyo was the only major Asian market to perform well on
Thursday"]
[/caption]
In stark contrast to yesterday , where most
Asian markets were buoyed by fears of Chinese stimulus, most Asian
markets dropped on fears that measures taken will not be sufficient
to bolster the region's economic prospects going forward.
An increasing number of Chinese companies have indicated that
profits may come in substantially under expectations. China
Resources Cement Company dropped 5% in Hong Kong trading, as the
company warned that first half profits will likely disappoint.
China Resources Cement is no outlier; more and more companies
have announced that first half numbers may be underwhelming.
Chinese electronic retailer GOME also told investors that purchases
were slowing in the first half of this year; as well, U.S. heavy
equipment provider Caterpillar ( CAT ,
quote ) indicated that was pulling back some of its
Chinese activities to reflect the slowdown in the country.
This aura of negativity forced Hong Kong markets ( EWH ,
quote ) lower. The Hang Seng ended down 0.79% lower, in
spite of starting the trading day in the green.
Mainland exchanges managed to fare even worse. The Shanghai
Composite ( FXI , quote ) dropped to its lowest
level in five months , closing down 0.95%. As a result of this
most recent drop, Shanghai is now the world's second worst
performing exchange for the month of June. Like in Hong Kong,
downwards earning revisions have pressured the Shanghainese
exchange.
Elsewhere in Asian markets, the Bombay Sensex ( INDY ,
quote ) ended flat in choppy trading.
In somewhat bizarre fashion in light of struggling neighboring
Asian markets, the Nikkei ( EWJ , quote )
had a fantastic trading day . The Japanese benchmark index
ended up 1.65%, as the Nikkei followed strong gains made in
American exchanges.
With a key European summit taking place, American investors
should keep an eye on Europe before entering trades today and to
see stocks with Chinese exposure move downwards.
Author's immediate family is long CAT