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US recovery fears weigh on Asian markets (AFP)

Thu, 29 Jul 2010 10:14:51 GMT

A concerned investor looks at a sea of red (indicating falling share prices) on a display at the Australian Stock Exchange in Sydney on May. Concerns about the strength of economic recovery in the United States weighed on Asian stocks Thursday, with traders cashing in profits from recent gains in banks.(AFP/File/Torsten Blackwood)

HONG KONG (AFP) – Concerns about the strength of economic recovery in the United States weighed on Asian stocks Thursday, with traders cashing in profits from recent gains in banks.

Eyes were on the world's biggest economy after the Federal Reserve said on Wednesday that while conditions were improving, the gains were "modest".

The tepid assessment pushed most Asian markets lower, with Tokyo's Nikkei closing down 0.59 percent, or 57.25 points, at 9,696.02.

Sydney ended down 0.13 percent, or 5.8 points, at 4,524.1, while Hong Kong was flat at 21,093.82.

The losses came after four days of broad gains, which had been led by buying in banks after upbeat news from European stress tests last week and reports that planned tighter regulation of the global banking industry had been watered down.

Markets on Thursday were following a 0.38 percent drop on the Dow, which came after an anticipated Beige Book report turned out more pessimistic than the previous survey. That came on top of concerns about high unemployment and weak business confidence.

The book said that "economic activity has continued to increase, on balance, since the previous survey" in early June, but noted significant headwinds.

"Among those districts reporting improvements in economic activity, a number of them noted that the increases were modest, and two districts... said that the pace of economic activity had slowed recently."

It also pointed to sluggishness in the housing market and retail sales, a key driver of the US economy.

The downbeat assessment was compounded by news that orders for big-ticket items suffered the biggest drop in almost a year in June.

New orders for "manufactured durable goods" -- such as planes, cars, refrigerators and computers -- fell by two billion dollars, or one percent, from the previous month, the Commerce Department said.

Analysts had expected a rise of 1.1 percent.

But Shanghai remained positive, with the composite index ending 0.55 percent, or 14.46 points, higher at 2,648.12 as dealers hoped a recent rally, which has seen the market jump nine percent in July, will attract more investment.

Confidence was also boosted by speculation that the government will refrain from introducing any further tightening measures in the near term.

Concerns about the US economy weighed on the greenback, with the dollar slipping against the yen, which in turn hurt Japanese exporters.

However, Sanyo surged 26 percent on a report that Panasonic plans to turn majority-owned subsidiary Sanyo Electric into a wholly-owned unit. Panasonic fell 7.71 percent on fears it would have to raise money for the move.

NEC lost 3.68 percent after posting a wider April-June net loss compared with the same period in 2009.

The dollar slipped to 87.20 yen from 87.78 yen in New York Wednesday afternoon amid heightened safe-haven demand.

The euro stood at 1.3017 dollars, slightly up from 1.2997 dollars in New York. The single currency fetched 113.47 yen compared with 113.63.

Oil prices turned higher on bargain-hunting and helped by the fall in the dollar, but analysts said sentiment suffered from slower US energy demand and weaker stocks markets.

New York's main contract, light sweet crude for September delivery, was up 20 cents at 77.19 dollars a barrel in afternoon trade.

London's Brent North Sea crude for September rose 12 cents to 76.18 dollars.

Gold closed at 1,165.80-1,166.80, from Wednesday's close of 1,162.50-1,163.50 US dollars.

This new is the courtesy of yahoo news.

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US recovery fears weigh on Asian markets (AFP)

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