Asian Stocks Drift Lower On Growth Concerns

By RTT News, 

( - Asian stocks fell broadly on Wednesday as investors fretted about the global economic outlook. Sentiment was hit after the World Bank trimmed its global growth forecast to 2.8 percent from an earlier prediction of 3.2 percent, saying developing counties are heading for "disappointing growth" because of the Ukraine crisis, financial market turbulence and unusually cold weather in the United States.

Japanese shares rebounded from a one-week closing low hit the previous day after the head of Japan's$1.26 trillion public pension fund said the fund will announce a boost to stock and foreign-bond investments in early autumn. News that Japan will retain its status as the only developed market in the region in MSCI stock indexes also underpinned investor sentiment ahead of Bank of Japan's two day monetary policy meeting starting on Thursday.

The benchmark Nikkei average rose half a percent to 15,069.48, while the broader Topix Index advanced 0.8 percent to 1,239.07. Economists expect the central bank to keep stimulus unchanged, as strong GDP and capital expenditure data boosts confidence in the nation's economic recovery.

Among the prominent gainers, Nippon Telegraph and Telephone Corp, Mitsui Engineering & Shipbuilding, Advantest Corp, Inpex and Mitsubishi Heavy Industries rose about 3 percent each. Seven & I Holdings Co added 0.9 percent on a report its operating profit for the March-May period likely rose 5 percent to a record. Toyota Motor gained 1.1 percent despite the company announcing global recalls of 2.27 million vehicles due to problems with front passenger airbag inflators.

In economic releases, Japan's business index of sentiment at large manufacturers fell unexpectedly to minus 13.9 in April-June from plus 12.5 in the previous three months, a government survey showed. However, companies said they expect a quick recovery in the July-September quarter. Separately, central bank data showed that an index measuring prices for domestic corporate goods rose 0.3 percent in May from the previous month, beating forecasts for a 0.1 percent increase.

Chinese shares ended little changed after equity index provider MSCI said it won't include China's mainland-based A shares in its global indexes. The benchmark Shanghai Composite Index edged up 0.12 percent to 2,054,95, a seven-week high, while Hong Kong's Hang Seng Index dropped 0.25 percent to 23,257.29, retreating from a five-month high.

Chinese Premier Li Keqiang said on Tuesday that the government will focus more on "targeted measures" to support the economy so as to achieve its 2014 growth target. The central bank, meanwhile, announced that it would speed up interest rate liberalization and preparations for setting up a deposit insurance system in 2014.

Australian shares inched lower, as miners fell on concerns about the outlook for iron ore and coal prices and a reading on consumer confidence failed to offer much hope. The benchmark S&P/ASX 200 dropped 0.3 percent to 5,454. Resources giant BHP Billiton fell 0.9 percent, Rio Tinto shed 0.4 percent and smaller rival Fortescue Metals Group declined 1.9 percent. Mining services contractor Downer EDI plunged 11.2 percent after BHP Billiton cancelled a $360 million mining services contract with the company at the Goonyella Riverside coal mine.

Whitehaven Coal, which is facing a further challenge concerning its Maules Creek mine in eastern Australia, dropped 0.4 percent. Takeover target Aquila Resources rallied 3.4 percent on a report Mineral Resources purchased almost 50 million shares of the company on the Chi X exchange at $3.75 per share. In the banking sector, NAB edged down marginally and Commonwealth slipped 0.3 percent, but ANZ and Westpac rose about half a percent each.

Flight Centre Travel Group advanced 1.2 percent after saying shareholders its full-year profit will be at the lower end of its guidance range. Engineering services provider Transfield Services tumbled 5.7 percent on a brokerage downgrade. On the economic front, Australian consumer confidence rose a little in June after the sharp post-budget fall in May, results of a survey from Westpac and the Melbourne Institute showed. The Westpac/Melbourne Institute consumer sentiment index rose to 93.2 from 92.9 in May.

Seoul shares advanced on foreign fund buying, lifting the benchmark Kospi average up 0.14 percent to its highest level since May 22. However, market heavyweight Samsung Electronics lost a percent and Samsung SDI dropped 1.5 percent on mixed views on Samsung Group's plan to set up a holding firm. In economic news, South Korea's jobless rate remained unchanged at a seasonally adjusted 3.7 percent in May, the same as in April, figures from Statistics Korea showed. On an unadjusted basis, the jobless rate fell to 3.6 percent in May from 3.9 percent seen in the previous month.

New Zealand's benchmark NZX-50 Index edged down 0.25 points in cautious trading ahead of the Reserve Bank of New Zealand's interest rate decision due tomorrow. The central bank is widely expected to increase the official cash rate by 25 basis points to 3.25 per cent following similar hikes in March and April. In economic releases, the value of retail spending on electronic cards rose a seasonally adjusted 1.3 percent in May, Statistics New Zealand said, topping forecasts for an increase of 0.5 percent following the 0.3 percent gain in April.

Elsewhere, India's Sensex was down half a percent and Singapore's Straits Times Index was declining 0.3 percent, while the benchmark indexes in Indonesia, Malaysia and Taiwan were marginally higher.

Malaysia's industrial output rose 4.2 percent from a year earlier in April, beating economists' expectations for 4.1 percent growth, official data showed.

On Wall Street, stocks ended mixed showing little change overnight, as investors found few reasons to keep buying after a four-session winning streak that lifted the Dow and S&P 500 to record highs. Chinese inflation data and the central bank's push to boost flagging growth by cutting the reserve requirements for some banks helped to limit the downside for the markets.

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This article appears in: News Headlines

Referenced Stocks: ATE , MSCI , NTT , TM

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