News Column

Asian Stocks Struggle For Direction

June 20, 2014

CANBERA (Alliance News) - Asian stocks ended Friday's session on a lackluster note in the absence of positive catalysts. Investors continued to watch developments in Iraq after US President Barack Obama said the US is prepared to send up to 300 military advisers to step up intelligence sharing and planning and to take "targeted" military action later if deemed necessary. Obama ruled out committing any combat troops to help quell the rising insurgency in the crumbling state.

Japanese shares gave up early gains to end marginally lower as investors locked in some profits after recent sharp gains. The benchmark Nikkei average slipped 0.08% to 15,349.42 after hitting a five-month high on Thursday. The broader Topix Index edged down 0.01%. Oil and fishery stocks paced the declines, while realty and construction stocks gained ground.

Mitsubishi Heavy Industries dropped 1.1% as the company and German engineering giant Siemens raised their offer for Alstom's energy businesses countering a revised by US rival General Electric. Isuzu Motors jumped 3.6% on the back of a rating upgrade by JP Morgan Chase.

Chinese stocks reversed early losses to end modestly higher, led by gains in technology and property stocks. The benchmark Shanghai Composite Index gained 0.15% to finish at 2,026.67 after posting its biggest single-day loss in seven weeks on Thursday on worries about falling liquidity. Hong Kong'sHang Seng Index rose 0.11% to 23,194.06, snapping a four-day losing streak.

Australian shares retreated, giving up most of Thursday's gains. The benchmark S&P/ASX200 Index dropped 0.89% to 5,419.5, dragged down by banks and miners, while the broader All Ordinaries Index shed 0.82%. Banks ANZ, Westpac, Commonwealth and NAB fell between 0.9% and 1.4%, while big miners BHP Billiton and Rio Tinto dropped over a percent each. Gold Miner Newcrest rallied 4% as gold prices pushed above USD1,300 on Thursday, buoyed by the Federal Reserve's outlook for continued low interest rates and continued tension in Iraq.

Santos shares declined 2.4%. The oil and gas firm and its French partner GDF Suez have scrapped plans to build a multibillion dollar floating gas plant off Darwin's coast, blaming escalating costs. Origin Energy dropped 1.4%, while Woodside Petroleum and Oil Search edged down marginally.

Retailers closed mostly lower, with Wesfarmers declining 1.3% and Woolworths closing down a percent. Shares of hotel operator Mantra Group fell 1.1% on their first day of trading.

Seoul shares tumbled on worries over the escalating crisis in Iraq. Market heavyweight fell 1.7% to a three-week low, extending Thursday's 2.6% loss on concerns about its quarterly earnings outlook. Hyundai Motor, the country's largest automaker, lost 2.5% and refiner SK Innovation dropped 2.4% to a two-week low.

The benchmark Kospi average closed down 1.2% at 1,968.07, its biggest single-day loss in eight weeks. Samsung Life Insurance slumped 3.4% on a report Samsung Life Public Welfare Foundation will sell five million shares in the company, representing 2.5% of the total shares outstanding.

New Zealand stocks fell sharply, with retailers pacing the declines, after The Warehouse Group downgraded its profit guidance for the fiscal full year 2014, citing seasonal trading conditions. Shares of the country's largest listed retailer plunged 7.8% to a 17-month low, while Kathmandu Holdings tumbled 3.4% and Michael Hill international shed 1.6%. Diligent Board Member Services lost 3.7% on profit taking after hitting a seven-week closing high the day before.

The benchmark NZX-50 Index dropped 0.91% to 5,145.03. In economic releases, New Zealand consumer confidence rebounded from a six-month low in June amidst increasing interest rates, a survey showed. The ANZ-Roy Morgan consumer confidence index rose to 131.9 from 127.6 in May. Another survey by the ANZ Bank revealed that New Zealand job ads logged the biggest monthly fall since late 2010 in May after four consecutive months of rise.

Elsewhere, India's Sensex was down 0.2%, Indonesian shares were marginally lower, Singapore's Straits Times Index was declining 0.2% and the Taiwan Weighted average dropped half a percent, while Malaysia's KLSE Composite was rising 0.2%.

US stocks ended Thursday's session little changed, although the S&P 500 closed at a fresh record high. Investors digested a mixed bag of corporate news and economic reports indicating strengthening of the labor market and an unexpected acceleration in the pace of growth in regional manufacturing activity.

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Source: Alliance News

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