Stocks experienced losses throughout Asia as investors exhibited concern about the prospects of the global economy. Investor apprehension stemmed from news coming from the United States and Japan. In the United States, the Dow, NASDAQ and S&P 500 finished down on Thursday. Even though several companies reported profits that exceeded expectations, it was not enough to spur investors’ waning optimism. Jobless claims also fell in the U.S.; however, this did not stop the slide for U.S. equities. (See Critical Issue: U.S. Market Snapshot: Stocks Fall on Fading Optimism About Economic Health).
In Japan, unemployment numbers surpassed economists’ estimates; the median estimate for unemployment was 5.2%, based on data from a Bloomberg survey. The report from Japan’s statistics bureau stated that Japan’s unemployment rate had increased to 5.3% in June, up from 5.2% in May. Japan’s 5.3% unemployment rate is a seven-month high for the country.
The MSCI Asia Pacific Index closed at 119.76 after gaining 0.28%.
The MSCI Asia Apex 50 lost 3.42 points, or 0.45%, to close at 750.86.
In Japan, the NIKKEI 225 fell 1.64% to 9537.30.
Hong Kong’s Hang Seng Index slid 0.3% to 21029.81.
In China, the Shanghai Composite decreased by 0.4%, or 10.61 points, to close at 2637.50. According to a Reuters report, a Chinese senior official stated that China had surpassed Japan to become the world’s second largest economy. China’s economy grew 11.1% in the first six months of 2010 from the same period one year earlier. While growth has been significant, China’s income per capita continues to be well behind that of the U.S. and Japan. (See RGE Critical Issue: Chinese Growth Decelerates in Q2: How Much Will it Slow in 2010?) India’s BSE SENSEX 30 lost 0.69%, falling to 17868.29.
In Australia, the S&P/ASX 200 dropped 30.6 points, or 0.68%, to close at 4493.50.
South Korea’s KRX 100 was down 0.86%, closing at 3702.42.
On currencies, the yen, Aussie dollar, kiwi, renminbi, rupee and rupiah strengthened against the dollar.
The yields for 10-year sovereign bonds fell throughout the region except in India, where yields rose 0.3 bps.
Click Table to Enlarge
All rights reserved, Roubini GlobalEconomics, LLC