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.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
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