Asian markets slip Wall St. losses, profit-taking

Wednesday, 19 September 2012 01:23 - - {{hitsCtrl.values.hits}}

HONG KONG (AFP): Asian markets mostly fell on Tuesday following losses on Wall Street and as profit-takers moved in after last week’s huge gains sparked by the US Federal Reserve stimulus plan.

Anti-Japan protests across China also weighed on shares in both countries, with three of Japan’s biggest car makers saying they had closed their factories or cut production in China as a result.

Tokyo closed 0.39 per cent, or 35.62 points, lower at 9,123.77 and Sydney fell 0.18 per cent, or 7.8 points, to 4,394.7 while Seoul edged up 0.13 per cent, or 2.61 points, to close at 2,004.96.

In afternoon trade Hong Kong was down 0.15 per cent while Shanghai gave up 0.76 per cent

Investors were taking a step back after the Fed on Thursday said it would start a third round of bond-buying, known as quantitative easing (QE3), in a bid to jumpstart the US economy.

The announcement, which followed a European Central Bank plan to buy the debt of under-pressure eurozone nations, had injected global markets with some much-needed risk appetite on Friday.

But profit-taking on Wall Street Monday was fuelled by data showing the Fed’s Empire State manufacturing index for the New York region fell for a second straight month in September.

The Dow fell 0.30 per cent, the S&P 500 slid 0.31 per cent and the Nasdaq shed 0.17 per cent.

“The big question was how long the exuberance of QE3 was going to last. Not very long it seems,” Tim Waterer, senior trader at CMC Markets in Sydney, told Dow Jones Newswires.

On currency markets the dollar was changing hands at 78.64 yen in afternoon Asian trade, compared with 78.70 yen in New York late Monday.

The euro fetched $1.3086 and 102.90 yen, down from $1.3114 and 103.22 yen.

With the Fed and ECB action unveiled, eyes are now on a two-day policy meeting of the central Bank of Japan that starts Tuesday, while China is due to release manufacturing activity figures for September on Thursday.

Tokyo and Beijing are locked in a political stand-off over a disputed group of islands in the East China Sea that have seen violent protests across China which have hit shares.

Honda Motor said it had temporarily closed all five of its China plants, while Nissan shut two of three factories and Toyota said it had scaled back some production without elaborating.

The decisions came after Panasonic said it suspended operations at some of its facilities in China and Fast Retailing temporarily closed seven of its 145 Uniqlo stores in the country.

Kenichi Hirano, market analyst at Tachibana Securities, said the islands are like “clouds hanging low in the sky”, adding some retailers who had outlets in China could be negatively affected.

Oil prices rose, with New York’s main contract, light sweet crude for delivery in October, adding 15 cents to $96.76 a barrel and Brent North Sea crude for November delivery gaining 18 cents to $113.97.

Gold was at $1,754.60 at 0620 GMT compared with $1,770.20 on Monday.

In other markets Taipei dropped 0.36 per cent, or 27.96 points, to 7,734.26.Taiwan Semiconductor Manufacturing Co shed 0.92 per cent to Tw$85.7 while Hon Hai Precision was 1.44 per cent lower at Tw$96.1. Wellington fell 0.33 per cent, or 12.76 points, to 3,804.48. Fletcher Building fell 0.9 per cent to NZ$6.88 and Telecom was down 0.6 per cent at NZ$2.49.