Asian Markets Continue Downside Momentum

Asian markets are trading in the red, following the negative sentiment seen during the U.S. session. Consequently, most Asian based indexes moved lower on Wednesday.

Asian markets were struck by a number of negative events tonight. The first and probably the most important was the Japanese Tankan manufacturing report, which failed to reach market expectations. The quarterly report showed that the manufacturing side of the economy is still in a strong contraction phase, something that would ultimately prolong Japan’s recovery.

Among the worst performing shares in the Nikkei 225 index were Nippon Airways, Fukuoka Financial and Mizuho, each declining more than 3.50%. The three companies declined as they announced that they are planning to issue new shares to raise money, something that would reduce the stake of the current shareholder.

Moreover, Toyota Motors (TM) declined 1% on Wednesday, after Fitch downgraded them to A+ the company’s debt rating. Some time ago, Toyota was among one of the only company’s in the world that held a triple-A rating, but currently the carmaker is fully experiencing the aftermaths of the credit crisis.

The number of members that declined in the Nikkei index was roughly the same with the number of companies that gained on Wednesday. However, this was not the case in the S&P/Asx 200 index, where only a hand-full of companies traded above the break-even line. The downturn in the S&P/Asx index was heightened by the decline in the commodity market, as an important number of companies listed in the Australian market are from the primary sector.

Overnight, the Japanese Nikkei gained 8.88 points (0.09%) to 9,967.32. The Australian S&P/Asx fell 81.10 points (2.05%) to 3,873.80

Crude oil for July delivery was recently trading at $70.50 per barrel, higher by $0.60.

Gold for July delivery was recently trading up by $2.50 to $929.90.

Disclosure: No positions

Comments

[MarvinMBA:]

I think investing in Taiwan can be profitable and might be better than investing in China. Politically as far as USA investors are concerned Taiwan is much to be preferred and as the China-Taiwan trade and financial interactions increase it will certainly help all investors and mitigate a USA downdraft

Jul 01 10:27 AM

[HaavBline:]

These days, the Japanese market hardly represents 'Asian Markets'. Japan's market fundamentals are near the bottom of all Asian Markets.

Jul 01 01:33 PM

[one eye:]

Asian Markets? having left out China, Taiwan, S. Korea, Hong Kong, Shanghai, Thailand, Vietnam, etc., your version of Asian leaves a lot to be desired.

Jul 02 04:23 AM