Tuesday, March 18, 2008

Asian indices end mixed after yesterday`s mayhem

The Asian markets mostly ended mixed today, after an across the board carnage yesterday, though, barring Japan, most of the other indices ended mixed. The Japanese indices recouped in the end while The Shanghai-listed stocks extended losses into the fifth straight day on worries of continued monetary tightening by the central bank, and forcing a retreat for China-related shares in Hong Kong.

Japanese shares bucked the trend to end the higher on bargain buying in beaten-down financial stocks such as Mitsubishi UFJ Financial Group. Australian and South Korean stocks were also unsettled by losses for resource stocks after a pullback in crude oil and metal prices.

China`s Shanghai Composite fell 3.9% to 3,668.89, on worries the central bank may announce measures to rein in inflation at the end of the National Party Congress meeting Tuesday. China`s Premier Wen Jiabao promised to take forceful steps to damp inflation at an 11-year high, a sign that overheating remains the government`s main concern even as financial-market turmoil threatens global growth.

In Hong Kong, the Hang Seng Index recovered from its day`s lows and closed with a loss of 1.4% to 21,384.61, after dropping below the 21,000-point level for the first time since August. The Hang Seng China Enterprises Index dropped 4.1% to 10,580.18, as the weakness in Shanghai spread.

In Tokyo, the Nikkei 225 Average ended 1.5% higher at 11,964.16, after sinking 3.7% in the previous session. The broader Topix index added 1% at 1,160.67.

Australia`s S&P/ASX 200 slipped 0.2% to 5,163.80. According to the minutes of the Reserve Bank of Australia`s March 4 meeting the higher setting of the cash rate would leave adequate flexibility to respond as necessary over the months ahead to new information about prospects for economic activity and inflation, indicating that the bank hold off any further rate hike and even leaves the door open to monetary easing.

South Korea`s Kospi wavered between positive and negative zones gaining 0.9% to 1,588.75.

Elsewhere, New Zealand`s NZX 50 index slipped 0.3% to 3,418.63 Singapore`s Straits Times Index gained 1.4% to 2,831.58 and Taiwan`s weighted index scale up 0.4% to 8,057.82.

Meanwhile, the European shares bounced back on Tuesday morning behind gains for the financial sector as investors temporarily shrugged off fears about asset write-downs to focus on an expected sharp cut in U.S. interest rates.

Of national indexes, the U.K. FTSE 100 index rose 1.7% to 5,505.40, the German DAX 30 index climbed 1.6% to 6,280.60 and the French CAC-40 index jumped 1.3% to 4,487.88.

The gold prices stayed just under $1,000 an ounce while crude prices tracked a bit higher in the early European session, up 36 cents to $106.04 a barrel.

Looking at the economic data releases today, we have the consumer price index from United Kingdom accompanied with Retail Price Index. The Bank of Canada will also declare its core consumer price index for February. The evening is schedule to release some of the most awaited data for the month from the United States. It includes Building permits and National housing starts. However the focus of the markets will be on the wholesale inflation i.e. the producer price index followed by the Fed interest rate decision.

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