Asian shares down as US faces shutdown

Asian markets have slumped as the US government edged towards a shutdown over a budget battle.

The face-off in Washington also sent the US dollar lower, while the euro suffered selling pressure from a crisis in Italy that has left the country's five-month-old government on the brink of collapse.

Tokyo on Monday fell 2.06 per cent, or 304.27 points, to 14,455.80, Sydney shed 1.66 per cent, or 88.2 points, to end at 5,218.9 and Seoul eased 0.74 per cent, or 14.84 points, to 1,996.96. Hong Kong shed 1.50 per cent, or 347.18 points, to close at 22,859.86.

But Shanghai rose 0.68 per cent, or 14.64 points, to close at 2,174.67 after a survey by banking giant HSBC showed Chinese manufacturing expanded further in September.

Traders have been spooked by the latest row on Capitol Hill, with the US government on the brink of shutting down after the House of Representatives approved a Republican bill seeking to delay President Barack Obama's health care law.

Legislators now have until midnight on Monday to reach an agreement to keep the government open, but analysts say the chances of a breakthrough are slim.

Obama has threatened to veto any bill that undercuts his sweeping health overhaul, while Democratic Senate Majority Leader Harry Reid says his chamber will reject the bill.

Adding to the crisis is a deadline to raise the country's borrowing limit, which comes up in mid-October. With Republicans determined not to raise the debt ceiling unless Obama gives way on the health bill, there are fears that Washington will run out of cash and default on its repayments.

'Things are far from the 'panic stage', but they don't have to be for investors to be spooked by the apparent intractability of the US political deadlock,' said Tachibana Securities market analyst Kenichi Hirano.

The impasse weighed on the US dollar on Monday, with the unit weakening to Y97.87 from Y98.24 in New York on Friday.

The euro fell to $US1.3500 and Y132.16 compared with $US1.3519 and Y132.88.

The single currency suffered selling pressure after Italian Prime Minister Enrico Letta called a vote of confidence in his left-right government, as former premier Silvio Berlusconi pulled his party's ministers out of the coalition.

President Giorgio Napolitano will have to mediate to find a way out of the latest political impasse, and has said he would dissolve parliament, triggering new elections, only 'if there are no other solutions'.

On oil markets New York's main contract, West Texas Intermediate for delivery in November, fell $US1.35 to $US101.52 in afternoon trade. Brent North Sea crude for November was down 95 US cents to $US107.68.

Gold cost $US1,340.86 at 1805 AEST, compared with $US1,324.60 on Friday.

In other markets:

- Taipei fell 0.69 per cent, or 56.81 points, to 8,173.87.

Taiwan Semiconductor Manufacturing Co shed 2.43 per cent to $Tw100.5 while Hon Hai Precision was 0.52 per cent lower at $Tw75.9.

- Wellington eased 0.97 per cent, or 46.29 points, to 4,736.39.

Telecom fell 1.9 per cent to $NZ2.33 and Warehouse Group was off 2.92 per cent at $NZ3.66, while Air New Zealand rose 0.33 per cent to $NZ1.52.

- Manila slipped 2.95 per cent, or 188.01 points, to 6,191.80.

Alliance Global Group fell six per cent to 23.50 pesos while SM Investments dropped 4.41 per cent to 7.80 pesos.

source: bigpondnews.com

Asian stocks mostly higher on US rally

Asian markets have mostly edged up, with a rally on Wall Street and an upbeat global economic outlook helped by receding fears of a US-led strike on Syria.

However, profit-taking on Wednesday capped gains after the previous two days' advances, while firms linked to Apple dipped in a lacklustre response to its latest range of iPhones.

Tokyo ended flat owing to a late sell-off as dealers cashed in after a four per cent gain since the weekend that was fuelled by Japan's successful bid to host the 2020 Olympics and stronger than expected growth data.

The Nikkei ended 1.71 points higher at 14,425.07, while Sydney added 0.64 per cent, or 33.2 points, to 5,234.4 -- a 2013 high. Seoul closed 0.49 per cent higher, advancing 9.79 points to 2,003.85.

Shanghai rose 0.15 per cent, adding 3.28 points to end at 2,241.27, after another round of Chinese indicators that suggest the world's number two economy is picking up after a slowdown this year. However, Hong Kong was 0.32 per cent down in the afternoon following four straight sessions of gains.

US President Barack Obama vowed in a national address in Washington on Tuesday to give diplomacy a chance before launching a military attack on Syria for using chemical weapons on its own people last month.

The Assad regime earlier in the day agreed to a proposal by Russia to 'place the chemical weapons under international control and then have them destroyed'.

The news soothed tensions on global markets, which slumped last month as traders bet on an attack by the US and its allies, which they feared could spark a wider conflict in the Middle East.

Improving confidence among investors helped the dollar up against the yen, which is considered a safer bet in times of uncertainty.

In the afternoon the greenback bought 100.43 yen, compared with 100.40 yen late New York and well up from the 99.60 yen in Asia on Tuesday.

The euro fetched 132.91 yen and $US1.3253 against 132.48 yen and $US1.3251.

Regional markets were given a positive lead by Wall Street on the back of the Syria developments and the economic data out of China and Japan that suggest a healthy pick-up in the global economy. The Dow rose 0.85 per cent, the SP 500 added 0.73 per cent and the Nasdaq advanced 0.62 per cent.

Oil prices were mixed as easing Syria woes reduced concern about supply from the Middle East. New York's main contract, West Texas Intermediate for delivery in October, eased 30 cents to $US107.09 a barrel in afternoon trade, while Brent North Sea crude for October gained 18 cents at $US111.43.

Both contracts had hit multi-month peaks in August, at the height of the Syrian crisis.

Apple-linked firms were broadly lower, with investors less than enthusiastic about the US firm's latest iPhones, which it unveiled on Tuesday. There was also disappointment that a trumpeted low-cost phone was not as cheap as had been hoped for.

Taiwanese assembler Hon Hai fell 1.3 per cent to Tw$76.00 and camera-lens supplier Largan shed 6.4 per cent to Tw$945.00, while in Tokyo parts supplier Murata Manufacturing Co. fell 2.6 per cent.

Gold cost $US1,367.60 an ounce at 0705 GMT compared with $US1,372.04 late Tuesday.

source: bigpondnews.com

Australian share market closes higher

Australian shares are close to their highest point for the year as investor confidence is boosted by a decisive federal election result and encouraging Chinese economic data.

Stocks are also being boosted by the need for major construction projects in Japan - Australia's second largest trading partner - ahead of the 2020 Olympics.

Easing anxiety over Syria after Russia suggested that Syria place its chemical weapons under international control has also influence trade.

Major resources companies, the big banks and other blue-chip stocks had led the Australian market higher, Lonsec senior client adviser Michael Heffernan said.

'The result of the election has injected a bit of confidence and positive sentiment. That's flowed over yesterday and today,' he said.

Recent economic data from China indicated that the Chinese economy was performing quite well, providing a boost for Australian resources stocks.

BHP Billiton rose 26 cents to $35.90, Rio Tinto added 93 cents to $62.88 and Fortescue Metals was six cents higher at $4.51.

Among the major banks, Westpac was 48 cents richer at at $32.41, National Australia Bank gained 26 cents to $33.44, ANZ firmed 23 cents to $30.17 and Commonwealth Bank jumped 27 cents to $73.90.

Elders rose one cent to 10.5 cents after the rural services provider announced that it had nearly completed refinancing the group and would slash about 10 per cent of its staff.

source: bigpondnews.com

US stocks rise despite Syria

Strong car sales, revived merger and acquisition activity and an expected product launch from Apple have helped propel stocks higher in a week that also featured some major headwinds.

Despite uncertainty over Syria and a disappointing jobs report at the week's close, all three leading indices posted gains for the holiday-shortened week.

The Dow Jones Industrial Average rose 112.19 (0.76 per cent) to 14,922.50. The broad-based SP 500 advanced 22.20 (1.36 per cent) to 1,655.17, while the tech-rich Nasdaq Composite Index tacked on 70.14 (1.95 per cent) at 3,660.01.

Markets were closed on Monday for the Labor Day holiday.

The week's gains were a big improvement over August, which saw the steepest monthly declines for the Dow and SP 500 since May 2012.

Perhaps the week's biggest bright spot was US August auto sales, with the industry selling 17 per cent more cars than a year ago. General Motors, Ford and Chrysler all posted double-digit gains.

The robust auto sales lifted stocks on Wednesday and 'spilled over into better sentiment in general,' said Michael James, managing director of equity trading at Wedbush Securities.

Markets also digested Monday's news that Verizon would buy out Vodafone's 45-per cent stake in their Verizon Wireless joint venture for $US130 billion ($A143.16 billion). Verizon plans a record $US25 billion debt offering associated with the deal in the next week or two, a person close to the situation said.

On Tuesday, Microsoft turned heads when it announced a $7.2 billion acquisition of Nokia's handset business in a bid to become a bigger player in the smartphone business.

Some analysts see increased merger and acquisition activity as a sign of rising confidence in the economy.

Analysts were also cheered by an invitation from Apple announcing a September 10 event in California. The gathering is widely expected to launch two new versions of the iPhone, including a less expensive model expected to appeal to China and other emerging markets.

On Friday, The Wall Street Journal reported that Apple was preparing to ship iPhones to China Mobile in a long-anticipated deal. Apple closed the week 2.3 per cent higher at $498.22.

The news on autos, telecommunications and Apple helped offset Friday's disappointing jobs report. The Labor Department reported a gain of 169,000 jobs in August, below the 177,000 projected by analysts. The report also slashed the jobs estimates for June and July.

The report, while 'not a disaster,' was weak enough to suggest that the Federal Reserve will either delay its plans to taper its bond-buying program, or reduce the program even more gradually than previously thought, said William Lynch, director of investment at Hinsdale Associates.

'I don't think the economy, as sluggish as it is, can take too much in the way of tapering,' Lynch said.

Investors are also skittish over the Obama administration's efforts to launch a military strike on Syria in response to Syria's purported use of chemical weapons.

Crude oil prices Friday pushed to a 28-month high of $US110.53 in New York amid US-Russian tensions over Syria. But equity markets have reacted inconsistently to Syria news, sometimes dropping in recent weeks on Syria headlines, and sometimes not.

'Of all the risks out there, the one that has the highest probability to hurt the market in the near term is the Middle East situation,' said Scott Wren, senior equity strategist at Wells Fargo Advisors.

'The market's not as focused on it as I think it probably ought to be.'

Congressional debate on Syria is expected to dominate next week's news. The economic calendar is relatively light, with August retail sales and inflation data due on Friday.

The calendar also includes a September 12 meeting with Securities and Exchange Commission Chair Mary Jo White and leading exchanges in the wake of the August 22 outage at Nasdaq Stock Market caused by a tech glitch.

Anthony Conroy, a trader at BNY Convergex Group, predicted the market would trade in a 'tight range until we get more clarity on the Fed and more clarity on Syria.'

source: bigpondnews.com

Listless trading seen this week

Local stocks are expected to remain listless once trading resumes Wednesday as investors scramble for leads in an abbreviated trading week.

Markets were closed Monday due to the holiday ending the Muslim holy month and remain closed Tuesday, which has been declared Ninoy Aquino Day.

In a research note to its clients, AB Capital Securities said sentiment this week would likely be driven by developments abroad, given that the local earnings season has already ended.

“One important event [this] week will be the Federal Reserve’s release of Federal Open Market Committee meeting minutes, which will give insights into the US financial and economic conditions for the month,” AB Capital’s Gregg Adrian Ilag said.

He noted, however, that stocks on the Philippine Stock Exchange were now trading at an average of 16 times their earnings on a per-share basis, which he said was a premium to historical valuations.—Daxim L. Lucas

source: http://business.inquirer.net/77878/listless-trading-seen-this-week