Headline indices of the Asia Pacific market declined for second straight day on Wednesday, June 12, 2013, as investors continued to move out their money off the table on growing reluctance by central banks to add more stimulus. The MSCI Asia Pacific Index fell 0.5%.
The Bank of Japan left its lending program unaltered yesterday, joining the European Central Bank, which last week kept its main refinancing rate unchanged.
Speculation over when the Fed might start to pare back its bond buying has roiled financial markets recently. Asia Pacific market declined lost nearly 9% since May 22, when Federal Reserve Chairman Ben S. Bernanke said policy makers could reduce the pace of bond buying should there be sustained improvement in the U.S. economy.
Many of the market pundits expects the US Federal Reserve to scale back the size of its bond purchases, intended to prop up the economy, by the end of the year, while some expects reduced buying as early as September. The Fed is currently buying $US85 billion per month of Treasuries and mortgage-backed securities in an effort to hold interest rates at very low levels and spur employment growth.
In the Asia Pacific region, Tokyo stocks ended with a modest loss after a volatile session triggered by the dollar's sharp overnight fall, which hurt car makers and financial shares. The Nikkei Stock Average slipped 28.30 points, or 0.2%, to 13,289.32 after stumbling 1.5% in the prior session. The bourse is now down 16 per cent on its year to date high, as strength in the Yen weighed on equities.
The dollar and the euro were falling sharply against the yen Wednesday as bearish global market sentiment was making investors more risk-averse and guiding them to the relative safety of the yen.
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Japanese core machinery orders fell larger than expected 8.8% m-o-m in April. Unadjusted core orders also fell 1.1% from the year-earlier month. Machinery orders are widely regarded as a leading indicator of corporate capital investment. Core orders exclude those from electric power companies and those for ships, which are often a source of volatility in the overall data due to their large sizes.
In Australia, the Australian share market fell to a five month low today, with selling virtually across the board. The only sector to finish firmer was the telecom service sector, support by defensive buying in Telstra (TLS). The benchmark S&P/ASX200 index was 32.6 points, or 0.69 per cent, lower at 4,724.5, its lowest closing level since mid-January. The ASX closed lower for the 12th day in 16 trading sessions, representing a fall in value of about 10 per cent in the past three weeks.
Newcrest Mining (NCM) shares fell 0.8% to A$11.93, as the gold miner was forced to reply to a series of questions from the ASX in response to a 15% fall in its share price which preceded Friday's announcement to a restructure.
Shares of Wesfarmers declined 1.7% to A$37.23 after its subsidiary, discount retailer Target, have confirmed 260 workers at its Geelong headquarters have been made redundant
In South Korea, shares in Seoul market declined. The benchmark Korea Composite Stock Price Index ended 0.6 percent down. A fall in the Seoul bourse led by foreigners' heavy selling with offshore investors dumping a net 403.7 billion won ($356.23 million) worth of South Korean stocks on Wednesday.
In India, the Indian benchmark indices edged lower in choppy trade as data showing a muted 2% growth in industrial production in April 2013 weighed on sentiment. The S&P BSE Sensex provisionally settled above the psychological 19,000 mark after alternately moving above and below that mark during the trading session. The Sensex was provisionally down 87.75 points or 0.46%, up about 85 points from the day's low and off close to 90 points from the day's high.
The market sentiment in India was affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Tuesday, 11 June 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 885.85 crore on Tuesday, 11 June 2013, as per provisional data from the stock exchanges.
Elsewhere, New Zealand's NAX50 dropped 0.48%.Malaysia's KLSE dropped 0.25%. Singapore's STI fell 0.53%. Taiwan's Taiex shed 0.54%. Indonesia's Jakarta Composite rose 1.91%. Markets in China including those in Hong Kong and Shanghai were closed for the Dragon Boat Festival.
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