Asian Markets, Fundamentals

Asian Stocks Slip Lower for Second Day Amid Weakening Commodity Prices, Further Global Growth Concerns

Asia Session Key Developments

• Commodity Prices Fall the Most Since August
• Australian Stocks Tumble to Three-Month Low
• Hang Seng Slips Below 20,000 for First Time in Five-Months

Stocks in Asia/Pacific weakened on Friday for a second straight day amid accelerating European debt, along with a rise in the U.S. unemployment claims, adding fears of a double dip global recession.. The concern is largely centered on the indebtedness of Greece, Spain, and Portugal, and their ability to borrow money. Looking at the economic docket, Australia’s AiG performance of construction index climbed to 57.7 in January from 49.3 in the previous month to mark the fastest pace of growth in two years, while the region’s foreign reserves pushed to the highest level since October 2009. Meanwhile, Japan’s leading index rose for the tenth straight month, with the gauge increasing to 94.0 to top forecasts for a rise to 93.5.

Nikkei 225                          10,057.09

The Japanese equity markets slumped for a second straight day on Friday, leading the Nikkei 225 to push 298.89 points lower (2.89%) and close at 10,057.09 as all ten components tumbled on the day. Shares of Sanyo Electric weakened 5.30% after lowering its full-year net income forecast to 36B yen from 42B yen, while Nippon Sheet Glass shed 4.60% as net income slipped 32.1B yen during the nine-months through December. Moreover, Nikon Corp lost 2.77% after Barclays lowered its rating on the stock to “equalweight” from “overweight,” while Hitachi advanced 3.28% after posting a net profit of 21.8B yen during the three-months through December.

Hang Seng                        20,341.64

Hong Kong shares slumped on Friday, leading the benchmark equity index to plunge 676.56 points (3.33%) and close at 19,665.08, with all nine components trading lower on the day. Shares of Sino Land gave back 4.74% as Hong Kong rents and prices in December surged 9.6% and 27.6% respectively, while Aluminum Corporation of China retreated 5.97% on the back of lower commodity prices. Meanwhile, Esprit Holdings lost 4.51%, marking its largest decline in seven weeks as former Chairman Michael Ying sold his holdings of 86 million shares, while the Bank of Communications dropped 4.81% amid a newspaper report speculating that the lender may raise more than 200 billion Yuan in a rights offer.

S&P/ASX 200 Index           4,514.10

Stocks in Australia traded to the downside on Friday for a second successive day on the back of lower commodity prices, leading the S&P/ASX 200 to retreat 107.50 points (2.33%) and close at 4,514.10. Nine out of the ten components traded lower on the day, with oil & gas leading the way, shedding 4.09%, while health care added 0.78% to taper the decline. Shares of Santos dived 4.07% as copper prices slid to its lowest price since October, while Newcrest Mining, Australia’s biggest gold producer slumped 2.56% amid gold losing 4.4% on the day. At the same time, Macquarie Group tumbled 5.60% after agreeing to buy the equity trading and research operations of Sal. Oppenheim Jr & Cie. KGaA, while Sims Metal Management dropped 2.99% due to Credit Suisse cutting the company’s stock rating from “neutral” to “underperform.

Notable Asian Session Event Risk / Economic Releases