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SINGAPORE (Dow Jones)--Asian markets mostly fell Wednesday after a drop in U.S. existing home sales hurt sentiment, with softer commodity prices dragging on material stocks while Chinese steelmakers were hurt by Beijing's decision to scrap an export tax rebate.
Japan's Nikkei Stock Average fell 1.9% and Australia's S&P/ASX 200 lost 1.6%, China's Shanghai Composite gave up 0.7%, Hong Kong's Hang Seng Index rose 0.2%, South Korea's Kospi lost 0.3% and Taiwan's Taiex slid 0.4%. India's Sensex and Singapore's Straits Times index were both flat by afternoon.
Dow Jones Industrial Average futures gained 55 points in screen trade. The Dow Jones fell 149 points overnight, after U.S. May home sales unexpectedly fell 2.2% as high joblessness in the U.S. offset the fading benefits of a tax credit for buyers.
"The optimism we saw a few days ago has been snuffed by that weak U.S. home sales data," said BBY senior institutional trader Peter Copeland in Sydney. "But if you believe the container volumes data coming out of China, they suggest the global consumer is back. I think we will be in a holding pattern before tonight's [Federal Open Market Committee] decision and policy statement."
Energy stocks declined, weighed down by weaker crude oil prices and losses for their U.S. counterparts. U.S. energy stocks led Wall Street lower on expectations of legal wrangling between the industry and the Obama administration over the deepwater drilling moratorium. A federal judge in Louisiana Tuesday ruled against the ban, but the White House responded by saying it would immediately appeal the injunction.
Oil Search fell 2.2% and Santos gave up 3.0% in Sydney, Inpex Corp. lost 2.9% in Tokyo, PetroChina Co. slid 0.7% in Hong Kong and Energy Development Corp. dropped 1.1% in Manila.
Woodside Petroleum fell 1.4% after the company flagged a possible timetable delay and cost increases at its A$13 billion ($11.3 billion) Pluto liquefied natural gas development in Western Australia. A dozen crane and forklift workers have been on strike over pay and conditions since April 28 and Woodside said in late March that its first LNG target could be missed if the action continued.
Weaker base metal prices also hurt mining and metal companies, with BHP Billiton dropping 1.3% and Rio Tinto losing 2.2% in Sydney and Sterlite Industries dropping 1.7% in Mumbai trading. But gold miners advanced on firmer spot prices, with Newcrest Mining adding 0.8% in Sydney and Zhaojin Mining Industry Co. gaining 1.4% in Hong Kong.
Chinese steelmakers came under selling pressure after the Ministry of Finance said Tuesday it would scrap an export tax rebate on a variety of commodities, including steel and non-ferrous goods.
"The cancellation of the export tax rebate effectively raises the export tax on these products, hurting the prospects of the metal firms, but the impact would be capped as companies start to limit volume growth," said Wang Junqing, an analyst from Guosen Securities.
Baoshan Iron & Steel Co. dropped 2.7% in Shanghai, while Angang Steel Co. shares fell 2.4% in Shenzhen and 3.3% in Hong Kong.
In Seoul, "the market is returning some of the recent gains after it overreacted on Monday to China's calls for greater yuan flexibility," said Min Sang-il, an analyst at E*Trade Securities.
Most technology and auto stocks were weaker with Samsung Electronics down 1.4% and Hyundai Motor Co. shedding 3.1%, while Korean Air Lines rose 1.1%, extending Tuesday's gains on hopes for strong overseas travel demand in the summer.
Japanese exporters also dropped after the decline on Wall Street, with Honda Motor Co. dropping 1.5%, Nissan Motor Co. off 1.8% and Fanuc 1.9% lower.
Elsewhere, New Zealand's NZX 50 ended flat and Philippine shares declined 0.3%, while Indonesian shares lost 1.1% and Thailand's SET Index inched up 0.1% by late afternoon.
In foreign exchange markets, the euro was at $1.2296, compared with $1.2277 in late New York trade Tuesday, and at 111.26 yen from 110.98 yen. The dollar was at 90.50 yen from 90.39 yen.
The greenback was caught in a "sideways shuffle," said Bank of New Zealand Strategist Mike Jones. He said that the initial euphoria surrounding China's decision to relax the yuan's exchange rate has "faded noticeably" and a "wealth of worrying credit news rekindled fears over the European banking sector, weighing on the euro."
Earlier Wednesday, the People's Bank of China set the dollar central parity rate at 6.8102 yuan from 6.7980 yuan Tuesday, suggesting that Beijing's weekend decision to allow greater exchange rate flexibility didn't mean it's a one-way bet on the yuan. The dollar was at 6.8033 yuan from 6.8136 yuan late Tuesday in Shanghai.
Mr. Jones added that the markets were firmly focused on the upcoming Fed rate decision. "We suspect a downbeat statement from the Fed would actually support the U.S. dollar, owing to its safe-haven status."
Japanese government bonds were higher, lifted by the Tokyo stock market's losses as well as U.S. Treasurys' gains Tuesday. The yield on the cash 10-year JGB was down 1.5 basis points at 1.170%. Lead September JGB futures were up 0.10 at 140.92 points.
August Nymex crude-oil futures were down 36 cents at $77.49 per barrel on Globex, after losing 76 cents Tuesday. Spot gold was at $1,242.80 per troy ounce, up $4.20 from late New York trade.
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Japan's Nikkei Stock Average fell 1.9% and Australia's S&P/ASX 200 lost 1.6%, China's Shanghai Composite gave up 0.7%, Hong Kong's Hang Seng Index rose 0.2%, South Korea's Kospi lost 0.3% and Taiwan's Taiex slid 0.4%. India's Sensex and Singapore's Straits Times index were both flat by afternoon.
Dow Jones Industrial Average futures gained 55 points in screen trade. The Dow Jones fell 149 points overnight, after U.S. May home sales unexpectedly fell 2.2% as high joblessness in the U.S. offset the fading benefits of a tax credit for buyers.
"The optimism we saw a few days ago has been snuffed by that weak U.S. home sales data," said BBY senior institutional trader Peter Copeland in Sydney. "But if you believe the container volumes data coming out of China, they suggest the global consumer is back. I think we will be in a holding pattern before tonight's [Federal Open Market Committee] decision and policy statement."
Energy stocks declined, weighed down by weaker crude oil prices and losses for their U.S. counterparts. U.S. energy stocks led Wall Street lower on expectations of legal wrangling between the industry and the Obama administration over the deepwater drilling moratorium. A federal judge in Louisiana Tuesday ruled against the ban, but the White House responded by saying it would immediately appeal the injunction.
Oil Search fell 2.2% and Santos gave up 3.0% in Sydney, Inpex Corp. lost 2.9% in Tokyo, PetroChina Co. slid 0.7% in Hong Kong and Energy Development Corp. dropped 1.1% in Manila.
Woodside Petroleum fell 1.4% after the company flagged a possible timetable delay and cost increases at its A$13 billion ($11.3 billion) Pluto liquefied natural gas development in Western Australia. A dozen crane and forklift workers have been on strike over pay and conditions since April 28 and Woodside said in late March that its first LNG target could be missed if the action continued.
Weaker base metal prices also hurt mining and metal companies, with BHP Billiton dropping 1.3% and Rio Tinto losing 2.2% in Sydney and Sterlite Industries dropping 1.7% in Mumbai trading. But gold miners advanced on firmer spot prices, with Newcrest Mining adding 0.8% in Sydney and Zhaojin Mining Industry Co. gaining 1.4% in Hong Kong.
Chinese steelmakers came under selling pressure after the Ministry of Finance said Tuesday it would scrap an export tax rebate on a variety of commodities, including steel and non-ferrous goods.
"The cancellation of the export tax rebate effectively raises the export tax on these products, hurting the prospects of the metal firms, but the impact would be capped as companies start to limit volume growth," said Wang Junqing, an analyst from Guosen Securities.
Baoshan Iron & Steel Co. dropped 2.7% in Shanghai, while Angang Steel Co. shares fell 2.4% in Shenzhen and 3.3% in Hong Kong.
In Seoul, "the market is returning some of the recent gains after it overreacted on Monday to China's calls for greater yuan flexibility," said Min Sang-il, an analyst at E*Trade Securities.
Most technology and auto stocks were weaker with Samsung Electronics down 1.4% and Hyundai Motor Co. shedding 3.1%, while Korean Air Lines rose 1.1%, extending Tuesday's gains on hopes for strong overseas travel demand in the summer.
Japanese exporters also dropped after the decline on Wall Street, with Honda Motor Co. dropping 1.5%, Nissan Motor Co. off 1.8% and Fanuc 1.9% lower.
Elsewhere, New Zealand's NZX 50 ended flat and Philippine shares declined 0.3%, while Indonesian shares lost 1.1% and Thailand's SET Index inched up 0.1% by late afternoon.
In foreign exchange markets, the euro was at $1.2296, compared with $1.2277 in late New York trade Tuesday, and at 111.26 yen from 110.98 yen. The dollar was at 90.50 yen from 90.39 yen.
The greenback was caught in a "sideways shuffle," said Bank of New Zealand Strategist Mike Jones. He said that the initial euphoria surrounding China's decision to relax the yuan's exchange rate has "faded noticeably" and a "wealth of worrying credit news rekindled fears over the European banking sector, weighing on the euro."
Earlier Wednesday, the People's Bank of China set the dollar central parity rate at 6.8102 yuan from 6.7980 yuan Tuesday, suggesting that Beijing's weekend decision to allow greater exchange rate flexibility didn't mean it's a one-way bet on the yuan. The dollar was at 6.8033 yuan from 6.8136 yuan late Tuesday in Shanghai.
Mr. Jones added that the markets were firmly focused on the upcoming Fed rate decision. "We suspect a downbeat statement from the Fed would actually support the U.S. dollar, owing to its safe-haven status."
Japanese government bonds were higher, lifted by the Tokyo stock market's losses as well as U.S. Treasurys' gains Tuesday. The yield on the cash 10-year JGB was down 1.5 basis points at 1.170%. Lead September JGB futures were up 0.10 at 140.92 points.
August Nymex crude-oil futures were down 36 cents at $77.49 per barrel on Globex, after losing 76 cents Tuesday. Spot gold was at $1,242.80 per troy ounce, up $4.20 from late New York trade.
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