Asian shares ease on signs of weak US consumer
Tuesday, 19 January 2010
HONG KONG, Jan 18 (Reuters): Most Asian stocks fell Monday following No 2 US bank JPMorgan's heavy losses on mortgage and credit card loans which cast doubt on consumer demand in the region's largest export market.
But European shares are seen recouping Friday's losses, with the DJ Euro Stoxx futures rising 0.5 per cent.
The US dollar and the yen fell after strengthening initially when investors unwound riskier trades. The euro remained under pressure, hurt by concerns about fiscal problems buffeting Greece, which has seen its budget deficit balloon and its credit ratings cut.
Eurozone finance ministers had little patience left for Greece after it misled them about the size of its deficit and would be ready to impose sanctions on Athens if needed, euro zone sources said.
Sentiment in Asia remained cautious.
"We are quite cautious still considering the environment we are in -- some companies are doing better but the reality is it is a tough environment," said Alex Boggis, fund manager at Aberdeen Asset Management, which oversees about $240 billion.
"The hard work is still to be done in terms of exporters not really kicking in and Asia still being geared to exports. It takes a long time to convert exports into consumption."
The MSCI index of Asia Pacific stocks traded outside Japan, which fell as much as 0.8 per cent, was down 0.1 per cent.
The index of regional shares was down 0.23 per cent.
US stocks fell around one per cent Friday as JPMorgan's results raised concerns about profits at banks and on data showing American consumer sentiment was weaker than expected, which followed a poor retail sales report earlier in the week. US markets will be closed Monday for the Martin Luther King day holiday.
Japan's Nikkei average fell 1.2 per cent, coming off a 15-month high struck last week, with bank shares leading declines over fears the market's recent rally was over done.
Hong Kong shares were under pressure as the property and banking sector lead the decline. Although Chinese banking shares were weak in the mainland market, the Shanghai benchmark ended up 0.4 per cent on gains in airline stocks.
Fears that Beijing is moving to curb credit growth to avoid inflation and economic overheating rattled shares in China and the rest of Asia last week.
Traders say a raft of Chinese data this week, ranging from fourth-quarter gross domestic product to December retail sales and industrial production could give clues on whether domestic consumption in China is helping offset persistent weakness in US demand and if monetary policy tightening is around the corner.
"It will be important to see if China is beginning to experience inflation and whether there will be any tightening," said Andrew Sullivan, a sales trader with broker MainFirst Securities in Hong Kong.
"If there isn't then obviously it is happy days. If there is -- it will put further strain on market valuations."
The euro slid to a four-month low against sterling as the British currency gained ground on the dollar and the yen following a rise in UK house prices and as the euro continued to be weighed down by concerns about Greece's fiscal woes.
But European shares are seen recouping Friday's losses, with the DJ Euro Stoxx futures rising 0.5 per cent.
The US dollar and the yen fell after strengthening initially when investors unwound riskier trades. The euro remained under pressure, hurt by concerns about fiscal problems buffeting Greece, which has seen its budget deficit balloon and its credit ratings cut.
Eurozone finance ministers had little patience left for Greece after it misled them about the size of its deficit and would be ready to impose sanctions on Athens if needed, euro zone sources said.
Sentiment in Asia remained cautious.
"We are quite cautious still considering the environment we are in -- some companies are doing better but the reality is it is a tough environment," said Alex Boggis, fund manager at Aberdeen Asset Management, which oversees about $240 billion.
"The hard work is still to be done in terms of exporters not really kicking in and Asia still being geared to exports. It takes a long time to convert exports into consumption."
The MSCI index of Asia Pacific stocks traded outside Japan, which fell as much as 0.8 per cent, was down 0.1 per cent.
The index of regional shares was down 0.23 per cent.
US stocks fell around one per cent Friday as JPMorgan's results raised concerns about profits at banks and on data showing American consumer sentiment was weaker than expected, which followed a poor retail sales report earlier in the week. US markets will be closed Monday for the Martin Luther King day holiday.
Japan's Nikkei average fell 1.2 per cent, coming off a 15-month high struck last week, with bank shares leading declines over fears the market's recent rally was over done.
Hong Kong shares were under pressure as the property and banking sector lead the decline. Although Chinese banking shares were weak in the mainland market, the Shanghai benchmark ended up 0.4 per cent on gains in airline stocks.
Fears that Beijing is moving to curb credit growth to avoid inflation and economic overheating rattled shares in China and the rest of Asia last week.
Traders say a raft of Chinese data this week, ranging from fourth-quarter gross domestic product to December retail sales and industrial production could give clues on whether domestic consumption in China is helping offset persistent weakness in US demand and if monetary policy tightening is around the corner.
"It will be important to see if China is beginning to experience inflation and whether there will be any tightening," said Andrew Sullivan, a sales trader with broker MainFirst Securities in Hong Kong.
"If there isn't then obviously it is happy days. If there is -- it will put further strain on market valuations."
The euro slid to a four-month low against sterling as the British currency gained ground on the dollar and the yen following a rise in UK house prices and as the euro continued to be weighed down by concerns about Greece's fiscal woes.