The stock market indexes in Asia and the Pacific region resumed its upward movement today after the largest automobile company in the world – Japanese Toyota, increased its forecast for profit this year because of increasing sales in the U.S. and Asia. Tokyo stock indexes are best presented during today’s session, led by shares of Toyota, which rose 3.4 percent. The company management said it expects net profit of 340 billion yen (3.98 billion dollars) for the fiscal year to March 31st, 2011. Previous estimates had a positive financial result of 310 billion yen. The main Japanese stock index Nikkei 225 rose 1.7 percent to 9 653.92 points while the insurance protection from bankruptcy, the Japanese state fell to its lowest level in three months. The rate of the yen has remained almost unchanged against the dollar today after yesterday jumped to its highest level in 15 years. Stock optimism in Japan was also supported by remarks of the Prime Minister of the country forms of the Khan, who said the government is prepared to grant a new impetus to the economy by using the current budget provisions. He fears that high unemployment and expensive yen would hurt the economic recovery of the country.
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The wave of increased sales, which covered yesterday the securities markets in Europe and the U.S. broke today and Asian stock exchanges. Although it was expected, the decision by ratings agency Standard & Poor’s to cut the credit rating of Greece and Portugal brought sharp decreases in the indexes and the risk premium on government securities of the two countries jumped sharply. Regional stock measure MSCI Asia Pacific, which brings together public companies from 10 Asian countries plus Australia and New Zealand slid 1.6 percent to 125.20 points today. This is his fourth decline in five trading session, and meanwhile the cost of insurance to protect against the failure of Asian countries reached its highest level since February. Stock prices of raw materials and the euro rate fell because of concerns that the fiscal crisis in Greece will be released in the eurozone. President of the European Central Bank Jean-Claude Trichet will meet with German politicians and the head of the International Monetary Fund Dominique Strauss-Kahn in Berlin today to discuss a possible rescue plan for Greece. All ten industry groups included in the MSCI Asia Pacific, noted a sharp drop as financial companies ran among the losers. Among national indexes in the region most Japanese Nikkei fell 225, which slid 2.6 percent to 10 924.79 points as investors shrugged off a strong 5-percent increase in retail sales in Japan in March.
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Greek stock market regulator has decided to ban short sales of securities which it may be speculating on falling prices for Greek shares. Decision takes effect today and will be valid until 28th June. The reason for this was the wave of sales that hit Athens Stock Exchange yesterday because of speculation that Greece will not be able to meet payments on its debt. The decision of the international rating agency Standard & Poor’s to lower the rating by three points in Greece quake caused the financial markets yesterday and fell 6 percent main stock index in Athens ASE. Investors had expected such a move because of uncertainties about the rescue plan by the International Monetary Fund for Greece and the euro area and the growing interest on government securities of the party would further hamper the Greek government in its attempts to be financed by issuing government bonds. However, news that the Greek government bond rates have already “junk” led to massive sales of Greek shares Tuesday, which suffered the most financial companies. Shares of Greece’s largest bank National Bank of Greece dropped by 10% and already 45% below their price levels by the end of last year. The ban on short selling is not surprising, given that they contribute to the sharp drop in share prices. They allow market participants who expect the price per share to decline to speculate with it, sell it without first be purchase.
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News of the investigation against Goldman Sachs, who is suspected of large-scale fraud mortgage securities caused a wave of sales of U.S. and European markets on Friday, which spilled over in Asia today. The Best Mortgages dropped the good results of Asian indexes. The reduced risk appetite of investors not only lower stock prices, but those of raw materials, while the rate rose strongly in the dollar against all major currencies. Analysts said the charges against the investment bank Goldman Sachs will severely undermine the already fragile confidence in financial markets and could lead many investors to leave them. The strong decrease of the Asian indexes today also contribute to the news that the Chinese government continues to restrict investment in real estate. Regional stock measure MSCI Asia Pacific, which oversees securities markets in ten Asian countries plus Australia and New Zealand sank by as much as 2.1 percent to 125.62 points. Today’s decline was its strongest over the past two months. On Friday, Asian markets retreated sharply from its 20-month peak for sales in the residential construction sector and the stock exchanges in Shanghai and Hong Kong.
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The sales of new cars in Europe are still maintained in some countries by government incentives, increased by an average 12.9 percent in January on an annual basis, figures released today data on the association of European car manufacturers. In EU countries, excluding Cyprus and Malta for months have sold 1 058 868 new cars, but to include Iceland, Norway and Switzerland, the number reached 1 085 894 cars (+13% yoy). For the first time the association provides separate statistics for individual Member States and to include information listed three states. According announced earlier this month, data from Association of Automobile manufacturers and their authorized representatives in Bulgaria for January in our sales have decreased by 47% compared to January 2009. The largest decline for the first month of 2010 is recorded on the market in Romania (-84.6%) and highest growth – this in Portugal (62%). In Britain, sales increased by nearly 30% to 145 479 units, in France has increased by 14.3 percent to 171 478 number in Spain is rising by 18% to 70 130 units, and in Italy are registered growth of 30.2% to 206 341 units. Germany, however, reported a fall of 4.3% in car sales annually to 181 189 pieces in January.
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