Wednesday, February 18, 2009

Asia is shaking again....non stop rate!

It's been a very long time since I last write about financial news or updates. Not that I do not look into it anymore, but simple because there's nothing much interesting to shout about. It's all the same this few months, market very volatile and very unstable. Yesterday US Dow Jones went down almost 300 points, so it will be very interesting to see how KLSE reacts later today. My bet will be 'sea of red' today. Even yesterday itself KLSE went down 8+ points when US didnt trade. Below are the market updates across Asia as of yesterday:

Asian stocks fell on Feb 17, with Japan's Nikkei sinking to a near 4-month closing low, while the US dollar surged as investors scrambled for safety from deteriorating global economic conditions and volatile banks.
European stocks fell more than a percent in early trade after Moody's Investors Service warned severe recessions in emerging Europe will pressure financial strength ratings of some Western European banks.

Fiscal strains across Portugal, Ireland, Greece and Spain gave dealers more incentive to push the euro to a two-month low against the dollar and scoop up US Treasuries and gold -- both viewed by investors as places of refuge during market turmoil.
"The risk aversion trades are likely to keep making money -- albeit amid volatility -- until new measures are unveiled by governments and central banks in key economies," said Dariusz Kowalczyk, chief investment strategist with SJS Markets in Hong Kong, in a note.
"Judging by the insufficient policy response so far, the near-term market outlook remains negative."
Countless economic stimulus packages and open promises to take more action by policymakers have so far all been met with disappointment by investors, with not even the US$787 billion (RM2.83 trillion) rescue bill passed this week in Washington helping sentiment.
Exports across Asia have collapsed and the latest Reuters Tankan poll of Japanese manufacturers shows confidence remains mired near record lows.
Japan's Nikkei fell 1.35%, closing at the lowest since October 2008, as financial shares such as banks and property firms slid on continued credit worries.
Japanese Finance Minister Shoichi Nakagawa resigned after being forced to deny he was drunk at a G7 news conference, dealing a fresh blow to unpopular Prime Minister Taro Aso in an election year. The yen slipped on the news, but it did not faze stocks.
Bank shares, led by Mitsubishi UFJ Financial Group, slid in the wake of falls by global peers after Friday's profit warning by Lloyds.
Losses in the energy, technology and financial sectors dragged the MSCI index of Asia-Pacific stocks excluding Japan down more than 3.5%.
Hong Kong shares slid 3.8% after the mainland market snapped its long-running rally, but Bank of East Asia finished higher despite a worse-than-expected second-half loss.
Australian's main stock index fell 1.5% on worries about European banks and poor results, though debt-laden companies Oz Minerals Ltd and Paperlinx Ltd gained on deals to ease their woes.
South Korea shares shed 4.1% as worries about the banking sector's outlook deepened amid the won's weakness. KB Financial Group and Hana Financial Group fell 4.8% and 9.7%, respectively.
Losses in China, Taiwan, Singapore and India ranged from 2% to 3%.
US stock futures fell 2.1%, indicating a weak open on Wall Street after a holiday on Monday, ahead of results from the world's largest retailer Wal-Mart Stores Inc.
Investors were awaiting news from General Motors Corp and Chrysler LLC, which were expected to hand in their restructuring plans by a Tuesday deadline, a requirement after receiving US$13.4 billion in US government aid.
"Investors are selling stocks not only in Japan but in other Asian markets as they wait for restructuring plans from GM and Chrysler. There's a view in the market that they might not be able to submit it on time," said Soichiro Monji, chief strategist at Daiwa SB Investments in Tokyo.
The dollar shot higher as investors cut down risks and held on to liquidity amid volatile global markets. It rose about a percent against a basket of major currencies.
The yen briefly weakened to its lowest in more than a month, at 92.75 per dollar, after Japanese Finance Minister Shoichi Nakagawa said he would resign. The Japanese currency later rose to trade under 92 yen.
The euro hit a two-month low against the dollar after credit rating agency Moody's said the recession in the emerging economies of Europe was likely to be more severe than elsewhere. Emerging Asian currencies broadly weakened against the dollar.
"We believe there is more to come as the schizophrenic gap between rather resilient Asian currencies recently and ugly economic data closes," said Sebastien Barbe, currency strategist with Calyon in Hong Kong, in a note.
The renewed focus on safety funnelled investors into US government debt, pushing yields lower across maturities. The benchmark 10-year yield tumbled to 2.76% from about 2.89% late on Friday.
The 2-year yield fell to 0.87% from 0.97% on Friday.
Japanese government bonds also rose on the back of the rally in Treasuries, with the March 10-year future up by 0.38 point to 139.38.
US oil prices hung below $37 a barrel in Asian trade as bleak economic indicators in Asia returned focus to the worldwide oil demand slump.
The sharp declines in equity markets and rush to safety sparked strong demand for gold. The spot market price climbed to a seven-month high of around $962 an ounce. -- Reuters

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