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Asia stocks fall, dollar rises as risky positions cut

Asia stocks fall, dollar rises as risky positions cut
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First Published: Wed, May 04 2011. 09 45 AM IST
Updated: Wed, May 04 2011. 09 45 AM IST
Singapore: Asian shares fell and the US dollar rose on Wednesday, with falling commodity prices spooking investors and causing a broader pullback in risk taking.
The main Wall Street indices closed between flat and 0.8% lower, with energy stocks knocked by lower oil prices and overall sentiment hurt by fears that corporate earnings would not live up to expectations.
In Australia, the benchmark S&P/ASX 200 index was down 41 points or 0.9% at 4,742.5 as of 7:02am, adding to a 0.8% fall on Tuesday.
Markets in Korea and New Zealand also fell. Japan’s financial markets were closed for the Golden Week holiday.
MSCI’s broadest index of Asia-Pacific shares excluding Japan fell more than 1%.
Silver suffered its biggest two-day loss since October 2008, dragging down gold and other commodities. After hitting an all-time high within a whisker of $50 an ounce last Thursday, spot prices were at $41.25 on Wednesday. Gold was also down about 0.4%.
Oil prices were dragged down as an interest rate increase by India added to concerns about demand and gains in the dollar helped spark a technical sell-off.
Brent crude for June fell 0.5% on the day to around $121.90 a barrel.
The dollar was up 0.9% against a basket of currencies while euro/sterling edged up 0.1% to 0.89965 , within striking distance of a 13-mth high of 0.90065 hit on Tuesday. The pair climbed one% on Tuesday after disappointing UK PMI data signalled that a rate hike may be further away than expected.
In contrast, the European Central Bank is expected to signal its readiness to raise interest rates after its policy meeting on Thursday, and may prepare the market for a June hike.
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First Published: Wed, May 04 2011. 09 45 AM IST
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