HONG KONG (AP) — Most Asian stock markets extended their losses Wednesday as the global rally continued to lose steam amid concerns about the pace of any economic recovery. European shares also faltered.
More signs of economic weakness in the U.S. inspired caution among investors, while uncertainty over whether crude oil could punch through eight-month highs near $73 a barrel in the coming days weighed on some Asian resources companies.
With some indexes up more than 50 percent since March on expectations of an economic turnaround this year, markets have begun to stumble amid worries stock prices have gotten too far ahead of economic fundamentals.
News that American industrial production fell by a bigger-than-expected 1.1 percent last month gave investors in Asia, as in the U.S. overnight, even more reason to hold back. It marked the seventh straight monthly drop and distracted traders from more upbeat figures on home construction, building permits and inflation.
"The market is losing a little bit of momentum after the rally," said Winson Fong, managing director at SG Asset Management in Hong Kong, which oversees about $2 billion in equities in Asia. "Some sort of the healthy correction is expected in the near term. But I think the economic fundamentals will catch up."
In Europe, Britain's FTSE 100 fell 0.6 percent, Germany's DAX was down 0.7 percent and France's CAC-40 shed 0.8 percent. U.S. stock futures pointed to modest gains Wednesday on Wall Street. Dow futures rose 34 points, or 0.4 percent, to 8,548 and S&P futures gained 0.5, or 0.1 percent, to 908.30.
In Asia, Hong Kong's Hang Seng index lost 80.90, or 0.5 percent, to 18,084.60, though managed to trim its losses after a volatile session. South Korea's Kospi shed 0.6 percent to 1,391.17
Australia's benchmark fell 1.5 percent and India's Sensex dropped 1.6 percent.
Japan bucked the downward trend with the Nikkei 225 stock index gaining 87.97, or 0.9 percent, to 9,840.85.
So did Shanghai's stock measure, recovering the session's losses to close higher by 1.2 percent, as investors found encouragement in comments from President Hu Jintao. Hu said Tuesday Beijing's stimulus is showing results and China is determined to take the lead in emerging from the global economic crisis.
Investors were wary after the Chinese government last week reported conflicting data showing exports falling but consumer spending and investment higher.
"Investors have opposite interpretations on the data, but the president's speech made it clear to those fence-sitters and it's a boost to the market," said Tang Yonggang, an analyst for Hongyuan Securities in Beijing.
Oil prices fluctuated before rising in Asia, with benchmark crude for July delivery up 17 cents to $70.65. On Tuesday, the contract fell 15 cents.
In currencies, the dollar was higher at 96.28 yen from 96.17 yen. The euro rose to $1.3887 from $1.3813.
Overnight, the Dow Jones industrial average fell 107.46, or 1.3 percent, to 8,504.67. The Standard & Poor's 500 index fell 11.75, or 1.3 percent, to 911.97, while the Nasdaq composite index fell 20.20, or 1.1 percent, to 1,796.18.
by the associated press
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