Thursday, June 18, 2009
Asian stocks declined, dragging the MSCI Asia Pacific Index to a three-week low, as concerns about the strength of the U.S. economy dented prospects for export earnings.
Honda Motor Co., which gets more than half its sales in North America, dropped 3.6 percent as the dollar traded near a two-week low against the yen. Mitsubishi UFJ Financial Group Inc. sank 3.3 percent, pacing declines among banks, after Standard & Poor’s cut credit ratings on 18 U.S. lenders. Rio Tinto Group, the world’s third-largest mining company, slumped 8.9 percent as it began a $15.2 billion share sale.
The MSCI Asia Pacific Index lost 1.4 percent to 100.62 as of 2:43 p.m. in Tokyo, set to close at its lowest since May 28. A 43 percent rally from a five-year low on March 9 has taken valuations of the gauge’s stocks to the highest since September.
“Investors are using the weaker dollar as an excuse to take profit as valuations look stretched following the recent rally,” said Michiya Tomita, who helps manage $51 billion at Mitsubishi UFS Asset Management Co. in Hong Kong. “Any correction will be short-lived as long-term fund managers are still sitting on the sidelines with their cash.”
Japan’s Nikkei 225 Stock Average fell 1.7 percent to 9,671.62 paced by Sekisui House Ltd. after the homebuilder was downgraded at Credit Suisse Group AG. Hong Kong’s Hang Seng Index sank 2 percent.
The Shanghai Composite Index gained 1.4 percent, led by China Shenhua Energy Co., which climbed 4.1 percent as the World Bank raised its growth forecast for the country’s economy.
Sweeping Overhaul
Futures on the Standard & Poor’s 500 Index gained 0.3 percent. The gauge dropped 0.1 percent yesterday as President Barack Obama proposed the most sweeping overhaul of the U.S. financial regulatory system in 75 years. The plan includes an agency for monitoring consumer financial products and bringing hedge and private equity funds under federal scrutiny.
The dollar weakened against currencies in Japan, Australia, Singapore and Malaysia before a U.S. report that economists predict will show the Philadelphia region’s manufacturing industry shrank for a ninth month. Mortgage applications dropped 16 percent last week to the lowest level since November, the Mortgage Bankers Association said yesterday.
Honda declined 3.6 percent to 2,580 yen while Sony Corp., maker of the PlayStation 3 game machine, sank 3.7 percent to 2,460 yen as the yen strengthened to as much as 95.52 per dollar, a level not seen since June 3. Makers of electronics and cars accounted for 34 percent of the Topix Index’s 1.6 percent drop today, Bloomberg data show.
(Bloomberg)
Asian stocks declined, dragging the MSCI Asia Pacific Index to a three-week low, as concerns about the strength of the U.S. economy dented prospects for export earnings.
Honda Motor Co., which gets more than half its sales in North America, dropped 3.6 percent as the dollar traded near a two-week low against the yen. Mitsubishi UFJ Financial Group Inc. sank 3.3 percent, pacing declines among banks, after Standard & Poor’s cut credit ratings on 18 U.S. lenders. Rio Tinto Group, the world’s third-largest mining company, slumped 8.9 percent as it began a $15.2 billion share sale.
The MSCI Asia Pacific Index lost 1.4 percent to 100.62 as of 2:43 p.m. in Tokyo, set to close at its lowest since May 28. A 43 percent rally from a five-year low on March 9 has taken valuations of the gauge’s stocks to the highest since September.
“Investors are using the weaker dollar as an excuse to take profit as valuations look stretched following the recent rally,” said Michiya Tomita, who helps manage $51 billion at Mitsubishi UFS Asset Management Co. in Hong Kong. “Any correction will be short-lived as long-term fund managers are still sitting on the sidelines with their cash.”
Japan’s Nikkei 225 Stock Average fell 1.7 percent to 9,671.62 paced by Sekisui House Ltd. after the homebuilder was downgraded at Credit Suisse Group AG. Hong Kong’s Hang Seng Index sank 2 percent.
The Shanghai Composite Index gained 1.4 percent, led by China Shenhua Energy Co., which climbed 4.1 percent as the World Bank raised its growth forecast for the country’s economy.
Sweeping Overhaul
Futures on the Standard & Poor’s 500 Index gained 0.3 percent. The gauge dropped 0.1 percent yesterday as President Barack Obama proposed the most sweeping overhaul of the U.S. financial regulatory system in 75 years. The plan includes an agency for monitoring consumer financial products and bringing hedge and private equity funds under federal scrutiny.
The dollar weakened against currencies in Japan, Australia, Singapore and Malaysia before a U.S. report that economists predict will show the Philadelphia region’s manufacturing industry shrank for a ninth month. Mortgage applications dropped 16 percent last week to the lowest level since November, the Mortgage Bankers Association said yesterday.
Honda declined 3.6 percent to 2,580 yen while Sony Corp., maker of the PlayStation 3 game machine, sank 3.7 percent to 2,460 yen as the yen strengthened to as much as 95.52 per dollar, a level not seen since June 3. Makers of electronics and cars accounted for 34 percent of the Topix Index’s 1.6 percent drop today, Bloomberg data show.
(Bloomberg)
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