November 30, 2010, MarketWatch
Most Asian stock markets moved lower Tuesday as fears about further monetary-tightening measures in China helped fuel a drop in the Shanghai Composite index to its weakest closing level in seven weeks.
China’s Shanghai Composite index slid 1.6% to finish at 2,820.18, the benchmark’s lowest closing level since Oct. 11.
The Japanese market also fell, with the Nikkei Stock Average ending near a two-week low after data showed a rise in unemployment and a drop in industrial wwwuction in October.
Japan’s Nikkei Stock Average NI225 fell 1.9% to 9,937.04, its weakest close since Nov. 17.
However, the Seoul market climbed after posting losses in the past two sessions, buoyed by an uneasy calm on the Korean Peninsula.
“Lingering concerns about the tensions in Korea as well as about the euro-zone crisis are holding back markets globally, including in Asia,” said Martin Hennecke, associate director at Tyche Group.
South Korea’s Kospi Composite $SEU ended 0.5% higher.
Elsewhere in the region, Hong Kong’s Hang Seng index HANGSENG closed down 0.7% and Australia’s S&P/ASX 200 XAT closed off 0.7%.
European news was continuing to hit the Asia region.
Despite Sunday’s announcement of an 85 billion euro ($113 billion) bailout package for Ireland, worries remained as to whether Portugal or Spain will also need help refinancing their debt. Read more about the Ireland bailout.
“The Irish rescue has backfired and the real question now is how to rescue the rescue and some of the rescuers,” said Uwe Parpart, chief Asia economist at Cantor Fitzgerald, in a note to clients.
In China, investors continued to fret over the possibility of further monetary-tightening measures from Beijing.
“Investors are expecting a rate hike soon, and the index was further weighed by policy uncertainty regarding curbs on inflation and liquidity measures,” said Liu Jun, an analyst from Orient Securities.
China last month surprised markets by raising its policy interest rate, and in recent weeks policy makers have ramped up separate tightening measures to cool inflation.
In Tokyo, stocks slid on concerns about the domestic economy as well as on Monday’s sharp drop in the euro against the yen.
Japan’s seasonally-adjusted unemployment rate rose to 5.1% in October, from 5% in September, while month-on-month industrial output decreased 1.8%, government data Tuesday showed.
Exporters were mostly lower as Canon Inc. 7751 CAJ lost 2.4%, Nikon Corp. 7731 NINOF fell 2.1% and Elpida Memory Inc. 6665 ELPDF closed off 4%.
Toyota Motor Corp. TM 7203 turned lower to close down 2.4% after the Japanese automobile giant said it will recall 650,000 Prius cars worldwide to repair a coolant pump defect. Toyota came under fire earlier this year for its slowness in recalling more than 8.5 million vehicles to fix problems with gas pedals, floor mats and braking systems.
Nintendo Co. 7974 NTDOF bucked the market, rising 4.2% after saying it sold 900,000 DS portable-games devices and 600,000 Wii consoles in the U.S. during the Black Friday shopping week.
In Seoul, the market outperformed the region.
“Negative sentiment seems to have somewhat eased among institutions as North Korea has stayed relatively quiet so far,” said Solomon Securities analyst Kang Hyun-gie.
Hynix Semiconductor Inc. dropped 5.2% on concerns that the fall in DRAM chip prices will continue to weigh on its fourth-quarter earnings after Gartner Inc. IT on Monday cut its forecast for worldwide personal-computer shipments for this year.
Taiwan’s Taiex rose 0.1%, Philippine shares ended 2.5% lower and New Zealand’s NZX-50 was off 0.2% at the close.
In late trading, India’s Sensex SENSEX was up 1%.
Singapore’s Straits Times Index was down 0.4%, Indonesia shares were 1.4% lower and shares in Thailand slipped 0.1%.
In foreign-exchange markets, the euro remained under selling pressure after it fell below $1.31 for the first time since Sept. 21 on Monday, as the Ireland bailout package failed to ease concerns that debt problems could spread to other European nations.
The euro EURUSD was fetching $1.3116 against the dollar, from $1.3120 late Monday in New York, and EURYEN at 110.14 against the yen, from ¥110.53.
The dollar USDYEN was buying ¥83.97, compared with ¥84.25.
Lead December Japanese government bond futures closed up 0.02 at 140.87 points.
The 10-year cash JGB was up 1 basis point at 1.185%.
Spot gold was at $1,367.40 per troy ounce, up 10 cents from its New York close on Monday.
January crude-oil futures CLF11 were down 15 cents at $85.58 per barrel on Globex.