Asian stock markets had its ups and downs Monday as Japan’s weaker-than-expected growth was attributed to the global economy’s losing momentum along with the news of the global growth facing headwinds.
Hong Kong’s Hang Seng closed at 21,066.40. The downturn also happened in Indonesia, Singapore, Australia and Thailand. In Australia, S&P/ASX 200 was 0.8% lower. In Sydney, financial stocks were paring losses with Commonwealth Bank of Australia down only 0.1%. Other major banks were off lows, losing 0.8% to 1.8%.
In Korea, blue chip stocks were lower. The Pohang Iron and Steel Company, Posco (KRX: 005490) was off 1.9% and Samsung Electronics, the world’s largest electronics company with a 2009 revenue of $117.4 billion lost 1.2%.
On the contrary, China\'s Shanghai Composite Index advanced 1.3 percent at 2,640.84; India\'s Sensex was up 0.1 percent to 18,183.70. Other gainers were Malaysia, Taiwan, and the Philippines.
Chinese banks paced gained after Agricultural Bank of China exercised its overalllotment option in Shanghai.
Japanese shares performed sluggishly. Japan\'s Nikkei 225 stock average lost 78.64 points, or 0.9 percent, to close at 9,174.82. The index had pared some early losses which saw it touch its lowest level since July 6.
Sony (TYO: 6758, NYSE: SNE), the world\'s fifth largest media conglomerate with revenue exceeding ¥ 7.730.0 trillion, was down 2.9%. Advantest (NYSE: ATE, TSE: 6857), leading manufacturer of automatic test equipment (ATE) for the semiconductor industry, dropped 2.4%. Honda Motor (TYO: 7267; NYSE: HMC) shed 1.6%.
The Japanese government released data which showed 0.4 growth in real terms in the April-June quarter, lower than this year’s first quarter, 0.5%. The figures suggested that its economic recovery does not meet expectation. Consumer spending was flat in the latest quarter. According to analysts, there is an uncertainty in the economic outlook for the following three months because the global economy which is losing momentum has impacts on its production and exports.
Credit Agricole Corporate and Investment Bank in a note said that the Japan data weighed on sentiment across the region, stoking concerns that both Japan and U.S were slowing materially.
Uwe Parpart, chief Asia strategist at Cantor Fitzgerald said that Japan’s growth remained at the mercy of external demand. External demand in the second quarter was expected to contribute more points to GDP than in the previous quarter. However, the figure was only 0.3 points. The chief Asia strategist added Japan has joined “the list of double-dip candidate economies.”
Nevertheless, followed by the data released, Japan’s economy minister said that it was so early that new move would not be given out until revised figures due next month examined.
In foreign exchange markets, the yen strengthened against the U.S dollar and the euro. The dollar was at Y85.85 while the euro was at Y109.64. The U.S. dollar will continue to weaken against the yen, possibly falling below its all-time-low of Y79.75 in the near term, according to Jun Kato, a senior manager of investment at Shinkin Asset Management.