Asian stocks fell in the past week, the second weekly decline in three, as government data showed job markets are worsening, stoking concern the global economy will recover soon.
The MSCI Asia-Pacific Index lost 0.8 percent in the week, retreating from last week’s 2.2 percent climb. That pared the measure’s record 28 percent in the three months ended June 30 on optimism the global economy is stabilizing.
“We are running out of data points that can boost sentiment, so there’s not much hope for further gains,” said Tomomi Yamashita, a fund manager at Shinkin Asset Management Co in Tokyo, which oversees about US$5.5 billion. “Stocks are not at reasonable levels when you consider the facts.”
The Asian stock benchmark, which plunged by a record last year as the global economy slipped into recession, has now climbed 47 percent since reaching a more than five-year low on March 9. Stocks on the gauge now trade at 23.5 times estimated earnings, compared with 15 times at the market trough in March and 15.2 for the US’ Standard & Poor’s 500 Index.
The Bank of Japan’s Tankan survey of manufacturer sentiment rebounded less than estimated, the central bank said on Wednesday, while government data showed Japan’s unemployment rate reached a five-year high in May.
Taiwanese share prices are expected to encounter pressure as the market moves closer to the nearest technical resistance at about 6,700 points, dealers said on Friday.
Investors are likely to keep alert as the bellwether electronic sector will release sales results for last month by the end of next week for a clear indication of global demand, they said.
After a Wall Street dive on Thursday, market sentiment has turned cautious about the global economy with the US reporting a higher jobless rate for last month, they added.
While profit taking may continue to impact the market ahead of 6,700 points next week, the bourse is expected to see technical support at around 6,350, dealers said.
For the week to Friday, the weighted index rose 3.12 percent to 6,665,40 after a 3.37 percent fall a week earlier.
Average daily turnover stood at NT$107.42 billion (US$3.27 billion), compared with NT$99.87 billion a week ago.
“Amid global economic woes, investors remain eager to look into how the world’s high tech product demand is,” Mega Securities (兆豐證券) analyst Alex Huang (黃國偉) said.
“The June sales data will serve as an important indicator to the outlook of the electronic sector which is the backbone of Taiwan’s exports,” Huang said.
Capital Securities (群益證券) analyst Chen Yu-yu (陳育娛) agreed, saying high tech stocks may face relatively high pressure ahead of 6,700.
“With daily turnover at low, the market is unlikely to break out of a consolidation mode. It is time for investors to adjust their electronics portfolios,” Chen said.