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Asian Shares Fall Despite Positive Wall Street Lead

by June 9, 2016 General
CANBERA (dpa-AFX) – Asian stocks fell across the board on Thursday despite gains on Wall Street overnight and steadier oil and metal prices. Mining and energy stocks finished mostly higher as the dollar index remained under pressure on increasing uncertainty over the timing of the next U.S. rate hike. Markets in China, Hong Kong and Taiwan were closed for the Dragon Boat Festival.

China’s consumer price inflation rose an annual 2.0 percent in May, the National Bureau of Statistics said today, coming in below forecasts for a 2.3 percent rise and heading further below the government’s target zone.

Also, deflationary pressures in the country eased further in the month, giving policymakers more room to keep fiscal and monetary policies supportive in coming months. The producer price index declined 2.8 percent in May from a year earlier, compared with a 3.4 percent fall in April.

Japanese shares fell, weighed down by a stronger yen and worse-than-expected machinery orders data. Japan’s core machinery orders tumbled 11 percent in April from the previous month, the most in two years, owing to earthquakes that hit the southern manufacturing hub, a government report showed.

The Nikkei average dropped 162.51 points or 0.97 percent to 16,668.41 and the broader Topix index closed 1.0 percent lower at 1,337.41. Banks Mizuho Financial Group, Mitsubishi UFJ Financial and Sumitomo Mitsui Financial fell 2-3 percent after bond yields hit a record low in the developed world on concerns over the health of the global economy and uncertainty ahead of the European Union referendum on the U.K.’s membership.

Toshiba rallied 5 percent after its U.S. unit Westinghouse Electric clinched a deal to build nuclear plants in India. Suzuki Motor rose half a percent on news Osamu Suzuki is stepping down as chief executive of the company. Inpex climbed 2.6 percent and JX Holdings rose 0.9 percent after U.S. crude futures settled above $51 for the first time in almost a year on Wednesday.

Australian shares fell after losses in the banking sector and profit downgrades at Surfstitch and Amcor. The benchmark S&P/ASX200 index dropped 8.10 points or 0.15 percent to 5,361.90 and the broader All Ordinaries index ended down 3.70 points or 0.07 percent at 5,437.40.

National Australia Bank eased 0.2 percent while the other three banks fell about 0.9 percent each. Mining giants BHP Billiton and Rio Tinto eked out modest gains, but smaller rival Fortescue Metals Group rose as much as 3.5 percent. Santos rallied 1.5 percent and Origin Energy gained 0.8 percent after oil prices extended gains for a third day on Wednesday to close at new 2016 highs.

Gold miner Newcrest Mining advanced 1.9 percent, Northern Star Resources added 2.1 percent and Evolution Mining jumped 3.6 percent as gold hit a three-week high. Insurance Australia Group rose 1.2 percent after the general insurer issued an update on its cost estimates for the recent storms on Australia’s east coast.

Global packaging giant Amcor slumped 8 percent after saying it would take a US$350 write down on its operations related to Venezuela. Online surf wear retailer SurfStitch Group plunged 21 percent after lowering its earnings outlook.

Seoul shares fell slightly even as the Bank of Korea took markets by surprise by cutting the benchmark interest rate for the first time in a year to a new record low of 1.25 percent in the wake of low inflation and diminished expectations of a U.S. rate increase over the summer.

The benchmark Kospi reversed earlier gains to end the session down 2.91 points or 0.14 percent at 2,024.17 amid selling by individuals and institutional investors. However, market heavyweight Samsung Electronics rose 1.7 percent to extend gains for the seventh consecutive session.

New Zealand’s benchmark index NZX-50 slid 20.96 points or 0.30 percent to 6,970.55 after the Reserve Bank of New Zealand kept its official cash rate on hold, but indicated it would not hesitate to ease policy if needed.

Shares of Sky Network Television soared 17.5 percent after the pay television operator said it has reached an agreement with Vodafone Group to merge and create New Zealand’s leading entertainment company. Spark New Zealand tumbled 5 percent to hit a three-month low.

Elsewhere, benchmark indexes in India, Indonesia, Malaysia and Singapore were down between 0.3 percent and 0.8 percent.

On Wall Street, stocks eked out modest gains overnight as oil prices continued their rise and shares of consumer goods companies edged higher on a weaker dollar. The Dow rose 0.4 percent and the tech-heavy Nasdaq gained 0.3 percent while the S&P 500 added 0.3 percent to reach its highest level in well over ten months.

Copyright RTT News/dpa-AFX