Painful weekly decline for the Japanese and Chinese markets

Viliyana Filipova — Mon, 30 Nov 2009 10:13:22 +0000

Today’s session brought indexes in Asia and the Pacific region, the strongest decrease their day for the past eight months, but ended the week with a painful decline in most markets in the region. Stood at the head Japanese, Chinese and South Korean securities market, which lost between 4% and 6% of its market capitalization over the past five trading sessions. Reason for mass sales became the news of the failure of the Dubai government investment holding company Dubai World to meet its obligations to creditors. The Fund has a debt for 59 billion dollars, equivalent to most of Dubai’s foreign debt to 80 billion dollars. Meanwhile, the Japanese yen rose to its highest rate against the dollar since 1995. Financial difficulties of the Dubai World stocks fell on banks and insurers in the region, led by HSBC Holdings, whose shares fell nearly 8 percent. This is due to investor concerns about exposure of large international banks to fund Dubai. Construction companies also suffered because of the activity of the Dubai World in the construction sector. The regional index MSCI Asia Pacific, which brings together companies from stock markets in ten Asian countries plus Australia and New Zealand, slid 3.2 percent to 113.78 points. This is the strongest decrease in the stock measure within one day of 30 March so far. Financial companies in its composition have contributed most to the sharp drop in MSCI Asia Pacific. The good news that unemployment in Japan fell for the third consecutive month in October, while consumer spending increased household failed to stop reductions in the indexes. Thus MSCI Asia Pacific to cut their lead to five-year bottom of 9 March to 61 percent. For the past five trading sessions the index fell by 2,7 percent.
The Japanese Nikkei 225 fell 3.2 percent to 9081.5 points. Appreciation of the yen, Japanese exporters worried as Sony, Canon and Toyota, which warned that this rate against the dollar will fail to meet set financial goals. After news of the Japanese government signaled that it may intervene in currency markets to halt the yen’s appreciation. Hong Kong’s Hang Seng was down by 4.8% to 21 134.5 points to a major Chinese Shanghai Composite Index lost 2.4% to 3 096.3 points. Earlier this week exchanges in Shanghai, Chengen and Hong Kong dropped because of fears that planned by the major banks in China issues new shares will dilute the value of existing equity. Compared to last Friday the Nikkei 225 fell by 4,4%, Hang Seng – by 5.9% and Shanghai Composite has yielded at most 6.4%. Strong weekly decline of 5.9 percent and the broad record of the Exchange Kospi index in Seoul. It slid 4.7 percent to 1524.5 points, while Dubai is not expected to cause injury crisis on the Korean economy due to limited investment in South Korea in Dubai.
Australian Index of blue chip S & P / ASX 200 is lower by 2.9 percent to 4572.1 points, mainly due to mining and energy companies after metals prices and oil prices fell significantly during today’s e-commerce in Asia. In New Zealand NZX 50 is decreased by 1.1 percent to 3094.4 points, a weekly decline in two Pacific stock exchanges amounted to 2.4% and 0.6%. U.S. futures broader index S & P 500 shows a sharp drop in Wall Street, while European markets fell heavily yesterday, as the pan-European index Dow Jones Stoxx 600 slipped 3.3 percent. Red wool, which includes the stock exchange in Sofia shows that financial markets remain very sensitive to bad news relating to bankruptcies and financial difficulties of companies. The price of oil futures with delivery in January fell by more than 6% in electronic trading on the New York oil exchange. Prices of most metals is lower, led by copper, which is cheaper by almost 5%. Commodity prices are often an accurate indicator is the tendency of investors to buy riskier assets such as shares and high-currencies.

Financial Communique » South Korean

Painful weekly decline for the Japanese and Chinese markets