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Asia stocks dip; dollar weakens on US data,

Asia stocks dip; dollar weakens on US data,
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First Published: Fri, Jul 16 2010. 10 59 AM IST
Updated: Fri, Jul 16 2010. 10 59 AM IST
Hong Kong: The dollar fell and Asian stocks dipped on Friday as the US economy showed further signs of slowing, while the euro appeared poised for further gains after breaching key resistance levels.
The dollar weakened broadly after reports that growth in industrial production had slowed sharply, offsetting a bright start to the US earnings season earlier this week which had briefly boosted markets.
In Asian trade, the dollar index slipped 0.1% against a basket of major currencies to 82.46, near a 2-month low. Near-term support was seen at 82.24, the daily high on April 25.
The euro rose to $1.2910, from around $1.2813 late in New York on Thursday when it gained 1.4% and surged above the 50% retracement of its April-June slide. Traders said the single currency will test $1.30 again, but noted there would be many sellers around that level.
The dollar is likely to come under increasing pressure as the US economic recovery loses momentum and as other countries in the world raise interest rates to fend off inflation, making their currencies more attractive, HSBC Global Research said in a note.
Asian stocks outside Japan dipped 0.2%, but the MSCI Asia ex-Japan index was on track for a small gain for the week. It has rebounded around 11% from its May lows as worries about Europe’s debt crisis slowly ease but is still down more than 2% for the year to date.
Japan’s Nikkei fell 2.2% as souring near-term technicals and concern about the US economy prompted investors to take profits from recent market gains.
“The micro base for the US, including things such as the Intel results earlier this week, is pretty good, but the macro base really isn’t, and this is raising a lot of concern about the US economy,” said Yutaka Miura, senior technical analyst at Mizuho Securities. “Nothing’s certain, but it looks as if we could be in for a bit of a correction.”
US stocks recouped early losses to end the day flat, led by a sudden turnaround in Goldman Sachs and BP
Goldman said it would pay a record $550 million to settle SEC charges that it misled investors in a subprime mortgage product, while BP said it had finally stopped the flow of oil from a deep-sea well which has caused an economic and environmental disaster in the Gulf of Mexico.
In Hong Kong, Agricultural Bank of China made a tepid debut as concerns about valuations, a waning appetite for new shares amid a glut of bank fundraisings and tough markets kept a lid on gains. The stock gained 3%, a day after a similarly weak debut in Shanghai
Crude prices was little changed around $76.55 a barrel on Friday, shedding early gains on concerns about weak US economic data.
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First Published: Fri, Jul 16 2010. 10 59 AM IST
More Topics: Markets | Asia | Stocks | Earnings | Nikkei |