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Asian markets mostly slip after Bernanke comments

July 18, 2012

HONG KONG: Asian markets mostly fell today after US Federal Reserve chief Ben Bernanke warned of a further slowdown in the US economy and a “frustratingly slow” rise in employment.

Tokyo fell 0.32%, or 28.26 points, to 8,726.74, Sydney shed 0.42%, or 17.20 points, to 4,123.6, while Seoul gave up 1.48%, or 27.05 points, to 1,794.91.

Hong Kong was down 1.11%, or 215.45 points, at 19,239.88 but Shanghai rose 0.37%, or 7.91 points, to 2,169.10.

In testimony to Congress Bernanke offered a gloomy outlook for the United States, warning that after growth of around just two percent in January-March, “available indicators point to a still-smaller gain in the second quarter”.

“Given that growth is projected to be not much above the rate needed to absorb new entrants into the labour force, the reduction in the unemployment rate seems likely to be frustratingly slow,” he added.

The comments weighed on already nervous traders, who have also been hit by ongoing concerns over the eurozone and weakness in the Chinese economy.

Despite Bernanke’s comments there was a positive close on Wall Street, where investors seemed to focus on the prospects for further stimulus measures from the Fed.

The Dow gained 0.62%, the S&P 500 advanced 0.74% and the Nasdaq added 0.45%.

The Nikkei was also given support by minutes from the Bank of Japan, which showed some board members at the latest policy board meeting said it “should not dismiss any policy options” to mitigate risks caused by Europe’s debt crisis.

That could be taken to indicate further monetary easing in Japan.

In Hong Kong, the Hang Seng index was hit by a 2.06% fall in HSBC, its single largest constituent, after the top executive in charge of the bank’s anti-money laundering programmes resigned following a Senate probe into risky practices.

On currency markets the euro fetched US$1.2291 in Asian trade, compared with US$1.2292 in New York late yesterday. The European currency fell to 97.16 yen from 97.23 yen.

The dollar was quoted at 79.07 yen, from 79.10 yen.

Oil slipped, with New York’s main contract, light sweet crude for delivery in August, down 57 US cents to US$88.65 a barrel while Brent North Sea crude for September delivery fell 64 US cents to US$103.36.

Gold was at US$1,582.40 an ounce at 0820 GMT, from US$1,595.60 yesterday.

In other markets:

  • Taipei fell 1.09 percent, or 77.95 points, to 7,049.05. Hon Hai Precision lost 1.69% to end at Tw$87.0 while leading smartphone maker HTC eased 1.68% to Tw$293.0.
  • Manila closed 1.22% lower, giving up 64.57 points to 5,220.55. Ayala Corp was down 5.02% at 435 pesos while Philippine Long Distance Telephone Co slipped 0.44% to 2,722 pesos.
  • Wellington closed 0.15%, or 5.19 points, higher at 3,474.06.



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