The Asian markets were largely stagnate Thursday despite stimulus measures being unveiled in Beijing. Mining and Metal stocks were down as were major Japanese camera manufactures. The Chinese railway sector posted small gains.
Jul. 26, 2013 - CHUO-KU, Japan -- Asian Markets faltered slightly Thursday; South Korea´s Kospi stock average dropped 0.1%, Japan´s Nikkei lost 1.1%, while Australia´s S&P/ASX 200 had a negligible gain. The situation in China and Hong Kong was not much different, with the Shanghai Composite and Hang Seng Index falling 0.6% and 0.3% respectively.
Beijing revealed new stimulus measures on Wednesday, which included increased investment in railway infrastructure and tax cuts for small businesses. These new measures will have limited effects in the short term, but will help to boost confidence by showing the market that the current government shows concerns about growth by enacting practical measures. It is our opinion that these measures are not meant to boost growth, but instead to stabilize it in order to meet their 7.5% growth target.
Railway Industry related shares were up in both Hong Kong and Shanghai. China Railway Construction Corp. gain 2.5% on both the Shanghai Composite and the Hang Seng. CSR Corp. was also up 2.9% in Hong Kong and 3.1% in Shanghai.
Two of Japan´s major camera manufactures Cannon and Nikon suffered substantial loses yesterday, with Cannon sliding 5.4% and Nikon dropping 4.7%. Cannon cut its forecast for the fiscal year, even though it beat its forecasted profits for the second quarter.
Metal and Mining stocks were also down across the region because gold futures fell 1.1% in the United States. Australia´s Newcrest Mining Ltd. lost 1.3% even though it announced that both copper and gold output was up more than 20% for the first quarter. The company has reduced forecasts for the upcoming quarter