Asian shares dip on US woes, Sydney bounces

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GMT - 3 Hours Asian shares dip on US woes, Sydney bounces

Post by εﺓз• » ιη∂αġι яσ¢χ « • on Wed Sep 14, 2011 4:39 pm

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HONG KONG: Asian shares were mostly lower on Thursday following another weak display on Wall Street and a tepid report on the US economy from the Federal Reserve.

A small upward revision for Japan's growth in the January-March period eased concerns on the Nikkei slightly but the strong yen and a sell-off of Tokyo Electric Power Co. continued to hurt sentiment.

Tokyo was 0.29 percent lower by the break, Hong Kong fell 0.32 percent in early trade and Shanghai lost 0.32 percent, while Seoul slipped 0.29 percent.

However, Sydney gained 0.20 percent, rebounding slightly from a two-and-a-half-month low on Wednesday that came after a six-session sell-off.

In the United States on Wednesday the Fed's latest survey on economic conditions in all its districts showed overall activity "generally continued to expand" since April.

But its Beige Book report warned there were trouble spots in the east and midwest of the country, where industrial growth and business optimism flagged.

The report came after Tuesday's downbeat assessment of the economy by Fed chairman Ben Bernanke, who said there was a "loss of momentum" in the already weak jobs market.

Adding to the woes, Fitch warned it could remove the United States' top credit rating if it fails to raise its debt ceiling to avoid a default.

The Dow ended 0.18 percent lower, its sixth straight loss, while the broader S&P 500 dropped 0.42 percent and the tech-rich Nasdaq fell 0.97 percent.

Japan's Nikkei finished the morning in negative territory after the government said the economy contracted less than first forecast in the first quarter, when the March 11 quake-tsunami disaster sent it into recession.

Tokyo said the economy suffered an annualised 3.5 percent contraction in the past quarter, instead of the 3.7 percent shrinkage first stated, although the change was smaller than economist forecasts of minus 3.0 percent.

The news did little to ease investor concerns, while yen strength weighed on exporters as traders seek out the safer haven currency.

And a 20 percent loss of TEPCO, the operator of the Fukushima nuclear plant that was battered by the quake, was also a huge weight as it hit a fresh low of 160 yen.

Selling by short-term speculators has continued on ongoing concerns the utility may be forced into a court-backed restructuring process that will entail the delisting of its shares, analysts say.

"Even if the firm survives, it will not be able to generate shareholder returns so the share price will just steadily trend towards zero," a fund manager of a Japanese asset management told Dow Jones Newswires.

Kenichi Hirano, operating officer at Tachibana Securities, told Dow Jones "the Nikkei may be supported by a lack of better investment options elsewhere, amid a US economic slowdown, ongoing debt concerns in the eurozone and prospects of more rate hikes in emerging markets."

On forex markets the dollar edged up slightly in morning Tokyo trade to 80.11 yen from 79.88 yen late Wednesday in New York, while the euro picked up to 117.12 yen from 116.51. The single currency was at $1.4621 against $1.4582.

Oil rose after oil cartel OPEC was unable to agree to hike output to ease the price burden on the global economy and make up for lost capacity caused by unrest in Libya.

New York's main contract, light sweet crude for July delivery, gained 66 cents to $101.40 a barrel and Brent North Sea crude for July delivery was up 16 cents to $118.01.

Gold opened at $1,537.00-$1,538.00 an ounce in Hong Kong, unchanged from the previous day's close. (AFP)
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