Sun, Jul 08, 2012 - Page 15 News List

Two days of declines end Asian stocks’ win streak

Bloomberg

Asian stocks fell for a second day, paring this week’s gain, as sales at Samsung Electronics Co missed analysts’ estimates and interest-rate cuts in Europe and China failed to boost confidence in the global economy.

The MSCI Asia-Pacific slid 0.5 percent to 118.44 as of 6:57pm in Tokyo. About five shares fell for every three that rose, with technology shares exerting the biggest drag on the index. The gauge has lost 8.2 percent from this year’s high in February amid concern economic growth in China and the US is slowing as Europe’s debt crisis deepens. The measure gained 1.1 percent this week.

“We are still reasonably cautious,” said Tim Riordan, who helps manage US$200 million at Parker Asset Management Ltd, a hedge fund in Sydney. “All of these moves by central banks had been expected, so they were baked into the price. ECB [European Central Bank] rate cuts are getting to the point where each cut is met with diminishing returns.”

The TAIEX suffered losses on Friday amid lingering concerns over global demand, in particular for electronic gadgets, after select high-tech firms reported disappointing sales for last month, dealers said.

However, some “China concept stocks,” which have close business ties with China, bucked the downtrend of the broader market after the People’s Bank of China cut its key interest rates in a bid to boost the economy, dealers said.

The weighted index closed down 19.19 points, or 0.25 percent, at 7,368.59, capping a 1 percent gain this week. Turnover totaled NT$72.65 billion (US$2.43 billion) during the session.

The market opened up 5.0 points after a lackluster Wall Street overnight and moved to the day’s high above the 7,400-point mark on follow-though buying before profit taking set in, sending the index into negative territory, dealers said.

South Korea’s KOSPI dropped 0.9 percent, led by Samsung, which accounts for 16 percent of the index by weight. The largest maker of televisions and mobile phones reported sales of 47 trillion won (US$41 billion), trailing the 49.8 trillion won average of 35 analysts’ estimates compiled by Bloomberg. The shares lost 2 percent to 1.161 million won.

Japan’s Nikkei 225 Stock Average declined 0.7 percent and the broader TOPOX retreated 0.6 percent. Hong Kong’s Hang Seng Index was little changed, while China’s Shanghai Composite Index surged 1 percent as developers and industrial companies gained. Australia’s S&P/ASX 200 Index slid 0.3 percent.

Singapore’s Straits Times Index gained 0.2 percent, capping eight days of gains, the longest winning streak since April last year. The last time the index rose for more than eight straight days was in January 2006.

In other markets on Friday:

Manila slipped 7.30 points, or 0.14 percent from Thursday, to 5,362.68.

Wellington fell 5.50 points, or 0.16 percent, to 3,478.70.

Mumbai edged down 0.10 percent, or 17.55 points, to 17,521.12.

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