Equities in the Asia/Pacific region traded lower on Monday, led by a 2.44% drop in the Nikkei however, the Hang Seng reversed early morning losses to advance for the second day on speculation for higher home prices in the region.
Asia Session Key Developments
Asia/Pacific Stocks Fall Lower – Hang Seng Bucks Trend, Reversing Losses in Early Trade
Equities in the Asia/Pacific region traded lower on Monday, led by a 2.44% drop in the Nikkei however, the Hang Seng reversed early morning losses to advance for the second day on speculation for higher home prices in the region. Meanwhile, the economic calendar showed consumer confidence in Japan rose to a 10-month high as the index surged to 32.4 from 28.9 in March to mark its biggest increase since April 2007, and the data suggests households are turning less pessimistic towards the economy as the government continues to take unprecedented steps to shore up the region. Meanwhile, the ASX pushed lower despite the 18% advance in Gloucester Coal Ltd, after the firm agreed to Nobel Group’s takeover bid.
NKY 225 9038.69
The Nikkei 225 plunged 226.33 points (2.44%) to close at 9,038.69 in Tokyo, with all 10 sectors falling lower as investors weighed the outlook for future earnings. Shares of Panasonic, the largest plasma TV maker in the world, slumped 7.63% after the firm said it anticipates a loss of JPY 195B this year, while Nomura Holding and Citigroup lowered their ratings on the stock to ‘sell’ following the dour outlook held by the company. Moreover, Sony Corp. slumped 5.8%, which was followed by a 5.47% drop in Pioneer Corp., while Canon Inc, which gets nearly a third of its annual sales from Europe, fell 4.83% following dismal Euro-Zone 1Q GDP reading last week. At the same time, Unitaka and Toyobo Co., the suppliers of materials used in medical masks, advanced more than 7% after the government confirmed 125 cases of the swine flu.
The Hang Seng index advanced 232.21 points (1.38%) to 17,022.91 after falling as much as 2.7% during the early trade, led by industrials and basic materials. Speculation for higher home prices in the region push shares of Hang Lund Properties Ltd, Hong Kong’s fifth-largest developer, 2.7% higher, while China Shenhua Holdings Ltd., the nation’s leading coal producer, advanced 3.2% after the firm said China’s consumption of coal may increase. Meanwhile, consumer services and goods dropped nearly 1%, led by Esprit Holdings, which gets nearly 80% of its sales from Europe, as shares of the firm fell 2.5% following the bigger-than-expected drop in the Euro-Zone growth rate.
ASX 200 3735.60
The ASX 200 fell 37.60 points (1.0%) to end the session at 3,735.60, led by a 2.00% drop in consumer services. A breakdown of the index showed oil & gas slipped 1.50%, which was followed by a 1.30% drop in financials while health care advanced 1.09%, led by gains in pharmaceuticals and biotechnology. Meanwhile, shares of Gloucester Coal Ltd. jumped 17.83% after the firm agreed to Noble Group Ltd. bid to take over the Australian mining company for A$ 572M ($427M).
Notable Asian Session Event Risk / Economic Releases