Asian stocks fall despite Europe, China rate cuts

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Asian stocks fall despite Europe, China rate cuts

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It seems such policies are having a muted effect on investor sentiment, analyst said.

06 July,2012 11:48 am

Asian markets fell Friday as apparently coordinated action by Europe and China to stimulate the global economy failed to reassure wary investors ahead of US jobs data due later in the day.Tokyo closed down 0.65 percent, or 59.05 points, at 9,0120.75 and Seoul ended 0.92 percent, or 17.29 points, lower at 1,858.20, with Samsung Electronics falling despite posting a record quarterly operating profit guidance figure.Sydney closed down 0.27 percent, or 11.40 points, at 4,157.8.In afternoon trade, Hong Kong retreated 0.18 percent to 19,773.75 and Shanghai was off 0.57 percent at 2,188.76.Despite a wave of stimulus measures announced overnight by various central banks, it seems such policies are having a muted effect on investor sentiment, IG Markets analyst Cameron Peacock said in Sydney.The European Central Bank Thursday trimmed eurozone borrowing costs by a quarter of a percentage point to 0.75 percent, in a widely anticipated move, and Denmark followed suit, cutting its key rate by 0.25 percent.Shortly beforehand, the Bank of England announced it was keeping its main interest rate at a record low 0.50 percent and said it would increase its quantitative easing stimulus policy by 50 billion ($78 billion) to boost Britains recession-hit economy.Chinas central bank also trimmed rates for the second time in a month, a surprise move that analysts said may indicate the worlds second-biggest economy is slowing more quickly than expected.International Monetary Fund chief Christine Lagarde Friday hailed the ECB move and other recent significant steps to contain the eurozone crisis but warned that more needs to be done.Markets were disappointed that the widely expected ECB move was not accompanied by additional stimulus measures to tackle the eurozone crisis.Cautious investors were also awaiting the June US labour report for signs about the state of the worlds largest economy, and whether it would prompt the US Federal Reserve to step in with fresh easing measures.Investors are in a wait-and-see mood now, with important US jobs data due later Friday, Investrust CEO Hiroyuki Fukunaga told Dow Jones Newswires.On Wall Street, traders shrugged off the rate moves in Europe and China to focus on US data showing weakness in consumer spending.The Dow Jones Industrial Average ended down 0.36 percent, or 47.15 points, at 12,896.67 on Thursday.The S&P 500-stock index lost 0.47 percent, or 6.44 points, to 1,367.58, while the tech-rich Nasdaq added a bare 0.04 points to 2,976.12.Concern was spurred by the ICSC June sales report showing same-store sales for big retailers excluding Walmart were only up 0.2 percent from a year ago -- a third straight month of weak growth.On currency markets the euro lost more ground in Asian trade Friday.The common currency was changing hands at $1.2380 in Tokyo afternoon trade, down from $1.2391 in New York late Thursday.Against the safe-haven Japanese currency, the euro dipped further to 98.89 yen, from 99.00 yen in US trade.The dollar, meanwhile, was stable at 79.90 yen, up slightly from 79.88 yen in New York trade, after data Thursday showed US unemployment benefits tumbled last week, suggesting an easing in layoffs and beating analyst expectations.Oil was lower in afternoon Asian trade, with New Yorks main contract, light sweet crude for August delivery, shedding $1.13 to $86.09 a barrel and Brent North Sea crude for delivery in August sliding $1.22 to $99.48.Gold was worth $1,603.80 an ounce at 0615 GMT, compared with $1,618.30 late Thursday.