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Asian stocks flat as investors take a breather

Asian stocks flat as investors take a breather
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First Published: Wed, Aug 05 2009. 10 17 AM IST
Updated: Wed, Aug 05 2009. 10 17 AM IST
Hong Kong: Asian stocks steadied near 11-month highs on Wednesday, as investors paused for breath before more earnings reports, but rising dairy prices pushed the New Zealand dollar to a 10-month peak.
Sentiment in Seoul got a slight early lift after former US President Bill Clinton secured the release of two US journalists jailed by North Korea. But the market later shrugged off the news as analysts said it would not ease tension between South Korea and its neighbour.
“The market is confined in a very tight range after such a big rally, though positive news like US housing data continues to come out,” said Soichiro Monji, chief strategist at Daiwa SB Investments.
The MSCI index of Asia-Pacific stocks outside Japan edged up 0.3% by midmorning, slowing down after rallying 40% since late April.
Japan’s Nikkei index slipped 0.08% and Toyota Motor Corp faced light profit taking, falling 1%, after the world’s biggest automaker cut its annual loss forecast but announced a third straight quarterly loss on Tuesday. Camera maker Nikon was down 1.2% ahead of quarterly results later in the day.
Investors were also reluctant to push the Korean market much higher after gains for 15 straight sessions and the benchmark KOSPI index was up just 0.3% by midmorning.
Surprisingly strong US housing data pushed the Dow Jones index up 0.4% on Tuesday although a sharp drop in US personal income suggested economic recovery would be slow.
US Treasuries fell on the housing report and put pressure on South Korean treasury bond futures, with Korean September futures dipping 2 ticks in early trade. Japanese government bonds bounced back though as Japanese stocks retreated and 10-year September JGB futures edged slightly higher.
US economic data supported improving risk appetite and kept the US dollar close to 2009 lows against the euro.
Economic recovery hopes meanwhile boosted Hong Kong’s Hang Seng Index, which was up 1% and shares in Cathay Pacific, which were up 2.5% ahead of interim results later on Wednesday.
Previously one of the world’s most profitable airlines, the carrier’s fortunes took a turn for the worse last year amid volatile oil prices and the global economic downturn
Oil prices edged higher again on Wednesday after Tuesday’s retreat, with US crude futures heading towards $72 a barrel after a surprise drawdown in US crude inventories last week.
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First Published: Wed, Aug 05 2009. 10 17 AM IST
More Topics: Markets | Global | Asia | Nikkei | Hang Seng |