Market Update
Asian shares traded lower Thursday, weighed down by data released this week beginning with China through to the U.S. that raised questions about the health of a global economic recovery.
The Nikkei fell 1.7% and the S&P/ASX 200 dropped 2.2%. The Hang Seng ended down 1.6% while on the mainland, the Shanghai Composite closed 1.4% lower. The Sensex lost 0.6%.
The Japanese market was also dragged lower by looming political uncertainty even as Prime Minister Kan survived a no-confidence motion after he said he would voluntarily step down from his post after bringing the country's nuclear crisis under control.
Stocks on the Move
Auto makers Toyota and Nissan skidded 3.2% each and Honda lost 2.4%. All three companies saw their sales decline in the U.S. after overall car sales also declined in the world's biggest economy. Toyota was dealt a twin blow as data showed a sharp drop in its May car sales in China.
Exporters were hit by uncertainties about their target markets and consumer electronics giant Sony declined 1.7%. Mazda Motor was down almost 2% while Toshiba and Fanuc Corp. fell 2.6% each. Tokyo Electron plunged 3.4%.
Power companies were among the few gainers as shares of Tokyo Electric Power closed up 2%. The stock gained momentum in noon trade after Prime Minister Kan said he would step down after the tsunami-related crisis is under control. Tohoku Electric Power Co gained 1.4% and Kyushu Electric Power Co closed higher marginally by 0.8%.
Banks led losses in China over rumours of a possible interest rate increase over the coming weekend.
Hua Xia Bank Co plummeted 5.2%. China Construction bank dropped 3.2% and Agricultural Bank of China lost 2.46%. Industrial & Commercial Bank of China gave up 1%.
Commodities firm Glencore that debuted earlier last month, dropped 4% in Hong Kong on news the European Investment Bank, or EIB, was freezing loans to the firm on corporate governance issues.
The Sensex had just five winners with Hindustan Unilever closing up 3.7%.
Major losers included Reliance Infrastructure, down 4.7% and Reliance Communications, down 4%. Tata Motors, ICICI Bank, Sterlite Industries and Mahindra & Mahindra lost between 2% and 2.9% each, respectively.
The broader market saw the Maran family controlled Sun TV plunge 28% on reports that the Central Bureau of Investigation, or CBI, will question former Telecom Minister Dayanidhi Maran over his alleged role in the 2G spectrum allocation scam. Low cost airline SpiceJet, another company owned by the Maran family, finished 16% lower.
Financials dragged the Australian benchmark as the country's top four banks closed lower. NAB plummeted 6.2% after it went ex-dividend and investors worried about the bank's European exposures. Commonwealth Bank closed 1.9% lower while ANZ ended down 2.5%. Westpac lost 2.3%.
Retail stocks were unable to shake off the market mood and closed in the red, even though fresh data showed retail sales were better than expectations. Trade balance numbers were lower than the market estimates.
Miners BHP Billiton and Rio Tinto were off 2.2% and 1.8% each, respectively.