Asian markets sink but euro holds up

0

HONG KONG: Asian markets fell on Tuesday, with Shanghai and Hong Kong hit by another weak batch of indicators, but the euro was supported by upbeat German trade data.

Advertisements

Wall Street provided a negative lead as last week’s strong jobs report fanned expectations that the Federal Reserve will increase borrowing rates soon.

Shanghai closed down 0.36 percent, or 18.35 points, at 5,113.53 and Hong Kong lost 1.20 percent, or 326.76 points, to 26,989.52.

Tokyo tumbled 1.76 percent, or 360.89 points, to end at 20,096.30 due partly to a pick-up in the yen, and Sydney dropped 0.49 percent, or 27.16 points, to 5,471.3.
Seoul was marginally lower, giving up 1.16 points to 2,064.03.

China’s National Bureau of Statistics said the consumer price index came in at 1.2 percent in May, down from April’s 1.5 percent.

The figure is the latest showing signs of weakness in the world’s second biggest economy and reignites worries about the country slipping into a painful spiral of deflation, which could further drag on any recovery.

Tuesday’s data came a day after a report showing a bigger than expected fall in imports, a seventh-straight drop, as Beijing struggles to get growth back on track.

In foreign exchange markets the dollar was at 124.55 yen Tuesday, slightly up from 124.47 yen in US trade late Monday but well below 125.52 yen in Tokyo earlier Monday.

‘US, Greece concerns remain’

The greenback was dragged down in US trade after media reports that US President Barack Obama had told Group of Seven leaders in Germany that its recent strength “posed a problem.”

The White House quickly denied the remark. Obama told reporters: “I did not say that. And I make a practice of not commenting on the daily fluctuations of the dollar or any other currency.”

The euro was at $1.1288 and 140.60 yen Tuesday from $1.1293 and 140.57 yen on Monday in New York.

The single currency recovered most of its recent losses after data showed a widening of Germany’s trade surplus in April, as exports grew 1.9 percent and imports fell 1.3 percent.

However, it remains fragile as traders watch stalled debt reform talks between Greece and its creditors, with the two unable to reach an agreement that will unlock much-needed funds for Athens to avert a default and possible eurozone exit.

In New York Monday the Dow lost 0.46 percent, the S&P 500 shed 0.65 percent and the Nasdaq fell 0.92 percent.

Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo, told Bloomberg News: “We still have concerns over US monetary policy and Greece hanging over our heads.

“If the US moves towards raising rates, bonds will be sold, and if that turns into a big move, there’ll also be consequences for stocks.”

In Hong Kong banking giant HSBC closed 0.41 percent lower after announcing up to 50,000 job cuts and cost savings of $5 billion in the next two years.

Oil prices were higher. US benchmark West Texas Intermediate for July delivery rose 19 cents to $58.33 while Brent crude for July gained 16 cents to $62.85 in afternoon trade.

Gold fetched $1,176.15 compared with $1,174.47 late Monday.

AFP

Share.
loading...
Loading...

Please follow our commenting guidelines.

Comments are closed.