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Market Update

Asian Markets Retreat; Nikkei Bounces back

Asian markets were trading mostly lower Tuesday as investors turned bearish after credit rating agency Moody’s Investor Service late Monday downgraded debt ratings of six European countries including Italy, Spain and Portugal, even as Japanese stocks reversed losses after the central bank announced a 10 trillion yen hike in its asset purchase program to beat deflation and kept its key interest rate unchanged at a 0%-0.1% range.

The Nikkei pared early losses and gained 0.4% as of 1:08 pm. The Shanghai Composite was down 0.6%  while the Hang Seng was flat.  The Sensex was also up 0.3%. The S&P/ASX All Ordinaries declined 0.9%.

Moody’s slashed ratings on Italy, Portugal, Slovakia, Slovenia and Malta by one notch and downgraded Spain’s sovereign rating by two notches. Ratings for U.K. and France were retained at triple-A, but outlook on these countries was lowered to “negative”, which once again brings to the fore the depth of Europe's financial crisis.

Stocks on the move

In Japan, exporters were hit as the yen firmed against all major currencies as a response to the ratings cut.

Consumer-electronics giant Sony Corp. was down 2.7%. Europe accounts for nearly 21% of the company’s sales. Sharp Corp. also gave up 1.1%.

Manufacturer of solar panels and liquid-crystal displays, Ulvac Inc slumped 10.4% after the company forecast a full-year loss.

Olympus Corp. also declined 2.8% after the company reported losses late Monday.

In Hong Kong, Cosco Pacific erased 2.1%. The company operates container facilities at Piraeus port in Greece.

Resources were also hit; Anhui Conch Cement declined 3% while Angang Steel gave up 2.6%. China Coal Energy slid 1.4%.

Property shares, however, firmed up with Sun Hung Kai Properties adding 2.7%. New World Development climbed 3.1%.

Cathay Pacific airways shed 0.4% after the airlines reported 1.9% year-on-year increase in number of passengers for January.

Among banks, ICBC gained 0.6% while Bank of China slipped 0.6%.

In Mumbai, SAIL gained 0.4% despite posting a more than expected 43 per cent slide in quarterly profit.

Banks were trading in the positive. SBI, the country’s biggest lender gained 3.7% while ICICI Bank added 1%.

Among other gainers Tata Motors drove up 1.7%, DLF added 1.3%, while L&T was up 1.4%.

In Sydney, miners lost ground with BHP Billiton down 1.3% and Rio Tinto erasing 1.9%.

Alumina Ltd. gave up 2.7% while BlueScope Steel declined 1.9%. Woodside Petroleum slipped 1.7%

Among banks, Westpac shed 1.4% and NAB was down 1.3%, while ANZ gained 3.3%