Wall Street shares fell for a second session as the 10 year Treasury yield dropped below 2.5% to a fresh six-month low and after reports showed an unexpected drop in U.S. industrial production. Both the Dow Jones Industrial Average and the S&P 500 lost 1% each while the Nasdaq closed down 0.8%.
Meanwhile, German and French benchmark indices lost over 1% each while Spain's Ibex dropped over 2% after data showed the euro zone economy grew less-than-forecast in the first three months of the year.
The economic picture from the U.S. was underwhelming. One report showed factory output fell, while another suggested hiring would continue. In Europe, the signs were more disappointing, with a report that first quarter economic output in the 18 country eurozone rose a less-than-expected 0.2%.
Among Asian bourses, Japanese share market declined for third consecutive session, dragged lower by tracking a sell-off on Wall Street overnight, the yen's gains against the dollar, and weaker than expected profit forecast from Japan Display. The benchmark Nikkei 225 index lost 1.41% to finish at 14096.59, while the Topix index of all first-section shares was down 1.63% to 1159.07. For the week, the index slipped 0.7% and is now down over 13% this year.
The yen's strength against the dollar was a major factor behind today's decline, as it makes exporters less competitive abroad and erodes repatriated profits. In currency markets, the dollar was changing hands at Y101.51 as of the close of TSE trading, off a two-month low of 101.31 yen hit Thursday on the back of a continued decline in U.S. Treasury yields. The dollar is poised to end the week about 0.25% lower versus the Japanese currency.
Benchmark U.S. Treasuries yields fell to six-month lows on Thursday after Greek government bonds weakened and sparked a safety-bid for U.S. debt, even though U.S. economic data pointed to a firming economy.
Japan Display declined 12.1% to 518 yen after the world's biggest maker of smartphone and tablet screens set its current fiscal-year operating profit guidance at 40 billion yen, well below the market forecast of 56.4 billion yen. It was the second downward revision for the company in the last few weeks.
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Sony Corp declined 2.9% to 1646 yen, extending 6% losses in the previous session, after the company said its net loss will probably be 50 billion yen ($491 million) in the year ending March, compared with a 128.4 billion-yen net loss the year earlier.
Defense-related shares were in focus after Prime Minister Abe called for a reinterpretation of the country's pacifist constitution to allow the use of collective self defense. Mitsubishi Heavy and Kawasaki Heavy Industries lost nearly 2 and 1.6%, respectively.
The Ministry of Economy, Trade and Industry reported that Japan's industrial production was up by 7.40% annually during the month of March this year, up from 7% reported in the previous month of 2014. On monthly basis, industrial production gained 0.70%, up from 2.30% negative growth in the last month.
In Australia, Australian share market finished lower today, on sustained selling pressure across the board, with mining and banking stocks leading declines. The benchmark S&P/ASX200 and the broader All Ordinaries each declined by 0.6% to 5479 and 5458.90, respectively.
The Sydney market had again struggled to hold above 5500 points after closing higher on Thursday. Weak European economic growth figures for the March quarter, a decline in US manufacturing activity and weak financial results from retail giant Walmart prompted a move to safe haven assets.
Almost all sectors dived into the red territory, exception being the utilities and property sectors which were end higher albeit by the smallest of margins. Mining stocks were amongst the hardest hit after commodity prices fell in the last day. Meanwhile, banks & financials, consumer discretionary and industrial stocks declined on following sell-offs overseas.
Financial adviser IOOF was a standout performer after revealing a takeover deal with smaller rival SFG Australia, with its shares adding 12 cents to A$8.25.
GPT Group shares rose 0.26% to A$3.85 after the group announced that its GPT Wholesale Office Fund had purchased a 50% interest in Number 2 Southbank Boulevard in Melbourne for A$196.7 million. The transaction is the third in a number of acquisitions from the Commonwealth Property Office Fund that has totalled A$548.4 million.
Santos (STO) shares rose 0.2% to A$9.20. after the gas producer said today that the first cargo of liquefied natural gas (LNG) from the $20.5 billion Papua Guinea LNG project will soon leave for Japan. LNG production has started early on the large-scale project in which Australian companies Oil Search and Santos are partners alongside project operator Exxon Mobil. Additionally, Chief executive David Knox said GLNG in Queensland was now 80% complete and on track and on budget to deliver first gas in 2015.
Leightons Holdings ended the session down by 1.7 % to A$20.55 despite announcing that its subsidiary John Holland has won a A$100 million contract to build mine infrastructure for Rio Tinto in Western Australias Pilbara region. The group said that the year-long project is planned to start later in May and will employ 200 workers at the peak of the contract. At the same time Leighton said that it had agreed to pay A$69.45 million to settle a shareholders dispute. Notwithstanding the settlement, LEI maintains it did not mislead investors. The money will compensate investors who claim Leighton failed to disclose problems on some of its key infrastructure projects.
In China, Mainland China share market finished marginally higher after clawing back intraday losses late afternoon, as investors chased for value buying following selloff in previous three sessions. However, the market gains were limited as investors were anxious about the anticipated restart of initial public offerings (IPOs) and the possibility a slowdown in the Chinese economy will linger. The benchmark Shanghai Composite finished 1.53 points higher at 2026.50, after touching intraday low of 2014.69.
Property developers stocks were up amid optimism the government will take further steps to support the property market. The People's Bank of China on May 13 told the nation's biggest lenders to expedite mortgages. China Vanke Co rose 1.6% to 7.70 yuan, Poly Real Estate Group Co 1.6% to 7.49 yuan and Gemdale Corp 0.9% to 7.67 yuan.
In Hong Kong, shares in city's market closed marginally lower, halting a six-day advance, as investors elected to withdraw some profit off the table, following strong recent gains.
The benchmark Hang Seng Index declined 17.95 points to 22712.91 on turnover of HK$48.38 billion. The benchmark index fell 175 points at one point but recovered most of its losses by market close. Among the HK 50 blue chips, 24 fell and 19 rose, while remaining 7 stocks closed steady.
Tencent Holdings declined 1.9% to HK$106.50 on talks that funds tried to shore up the share price and then disposed of their holdings. The stock prices surged 5.8% yesterday after the company started its 1-for-5 share split.
China developers were also lower on profit taking selling. China Resources Land declined 1.8% to HK$15.30 and China Overseas Land & Investment softened 1.7% to HK$19.24. Agile (03383), Country Garden (02007) and Shimao Property (00813) fell between 2% and 2.8%.
Sunac China (01918) said it is in discussion with Greentown China's (03900) chairman Song Weiping, and CEO Shou Bainian regarding the acquisition of a 30% stake in Greentown. Sunac plunged 6.5% to HK$3.86, but Greentown jumped 2.8% to HK$8.03.
Cheung Kong (00001) and Whampoa (00013) was up 0.5% and 0.7% respectively after its chairman Li Ka-shing committed a consideration to shareholder's query regarding a stock split proposal.
The Census and Economic Department of the Hong Kong said on Friday that Hong Kong economic growth remained moderate in the first quarter of 2014, at 2.5% year-on-year in real terms, somewhat slower than that of 2.9% in the preceding quarter. On a seasonally adjusted quarter-to-quarter comparison, real GDP grew slightly by 0.2% in the first quarter of 2014, after the 0.9% growth in the preceding quarter (revised downward from the earlier estimate of 1.1%).
In India, Indian stocks soared to record highs and the rupee strengthened against the dollar as it became clear that the country was set to get for a new, stable government headed by the opposition Bharatiya Janata Party (BJP) on Friday.
The 30-share index, which had a solid run in the past few days, surged 1,470 points to hit a new life-time high of 25,375.63 in early trade fuelled by hopes that BJP government would fast-track reforms and accelerate economic activity. However, the index started losing momentum later and briefly slipped into negative territory to touch low of 23,873.16. Frittering away significant portion of its gain on profit booking, the Sensex nevertheless concluded at a new closing peak of 24,121.74, a gain of 216.14 points or 0.90%. This surpasses its closing of 23,905.60 on Thursday.
The 50-share NSE Nifty crossed the key 7,500-mark to hit an all-time intra-day high of 7,563.50. However, profit-booking at record levels wiped off most of early gains to close at 7,203 79.85 points, or 1.12% higher.
In the forex market, the rupee climbed to 11-month high of 58.62 against the US dollar amid continued foreign fund inflows into the stock markets. It was last trading at 58.93.
A trend of Lok Sabha elections showed that Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) is all set to form the next government at the Centre. The NDA was leading in 271 seats and was declared winner in 63 seats out of the total of 543 Lok Sabha seats. The Congress-led United Progressive Alliance (UPA) was leading in 49 seats and was declared winner in 10 seats. A party or a pre-poll alliance will need 272 MPs to form government at the Centre, which is a simple majority in 543-member Lok Sabha. Investors are hoping that the BJP-led government will be better at getting things done and more business-friendly than the Congress-party-led coalition government which was in power during the past ten years.
Bank shares were among the top gainers in Indian market as investors shifted into stocks more geared to recovery. Domestic-focused shares such as ICICI Bank and Ambuja Cements soared, while power companies surged on bets improved infrastructure will boost electricity use. Adani Enterprises, one of the biggest companies in Gujarat, climbed 11% to the highest level since 2011.
Elsewhere in the Asia Pacific region, Taiwan's Taiex index rose 0.09%. South Korea's KOSPI index was up 0.16%. New Zealand's NZX50 fell 0.2%. Singapore's Straits Times index fell 0.3%. Indonesia's Jakarta Composite Index added 0.8%. Malaysia's KLSE Composite added 0.2%.
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