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Asian chipmakers see firm growth; Samsung capex eyed

admin — Mon, 19 Apr 2010 11:48:07 +0000

SEOUL (Reuters) – Asian chipmakers are set to deliver another set of strong results and cement growing views that the global technology sector’s recovery is accelerating as an economic recovery boosts corporate and consumer spending.

Better-than-expected demand for personal computers and limited output by smaller players have boosted prices of dynamic random access memory (DRAM) and NAND memory chips, benefiting sector leaders such as Samsung Electronics (005930.KS), Hynix Semiconductor (000660.KS) and Toshiba (6502.T).

“Demand growth will be stronger than in the previous upcycle as smartphone and tablet PC markets are added as a new customer segment on top of reviving personal computer sales,” said Greg Noh, an analyst at HMC Investment & Securities.

The sector’s history is marked with volatile cycles of shortages and oversupply and some analysts have warned the industry could be setting itself up for a supply glut.

Memory chipmakers have returned to profit since late last year after several quarters of losses, as prices rebound and PC demand grows, aided by strong growth from China.

Samsung’s chip business, which reported 670 billion won operating loss a year ago, is expected to swing to a profit of more than 2 trillion won, making up half of the firm’s entire profit, which it estimated at a record 4.3 trillion won.

Consolidated chip operating profit margin at Samsung, the world’s biggest maker of both DRAM and NAND, may have also improved to around 23 percent from the previous quarter’s 21 percent and 13 percent loss a year ago.

Japan’s Elpida may report record quarterly operating profit, while bigger rival Hynix of South Korea is set to show an 8 percent quarterly gain in profit from the preceding quarter.

But smaller rival Nanya Technology Corp (2408.TW), Taiwan’s No.2 computer memory chipmaker, remained in the red in January-March, although its net loss narrowed sharply from a year ago.

Samsung shares have gained 3.5 percent so far this year while Hynix is up 17 percent, beating a 2 percent gain in the wider market . Toshiba shares added 0.8 percent and Elpida jumped 35 percent against a 4 percent rise in the Nikkei .N225 this year.

SOME CAUTION

On Tuesday, investors will get clues on the outlook of NAND chips, used in mobile phones, digital cameras and other hand-held gadgets, as Apple (AAPL.O), the maker of iPhone and iPad, may offer sales forecast for its key products.

After well over a year of depressed spending on technology purchases, businesses are widely expected to open their wallets, as they upgrade aging IT hardware, but a growing list of chip makers with new investment plans threatens to push the sector back into volatile oversupply cycle.

“We must watch carefully if this (strong trading) trend continues into the second half, and if corporate replacement demand for servers and PCs will materialize as people are expecting,” said Deutsche Securities analyst Takeo Miyamoto.

Sector leader Samsung is widely expected to raise this year’s capital spending on memory chips by around $2.5 billion, joining Elpida, Powerchip and Nanya, which have already announced big investment plans.

Elpida plans to double its capital spending to $1 billion in the current financial year, while Powerchip Semiconductor Corp (5346.TWO), Taiwan’s top PC memory chipmaker, and Nanya are planning spending increase of between 16 and 18 percent.

Company Jan-March profit Year ago (loss) Prior quarter Date *Samsung 4.1 trln won 470 bln won 3.7 trln won April 30

Hynix 767 bln won (515 bln won) 708 bln won April 22 *Toshiba 91.55 bln yen (74.02 bln yen) 10.22 bln yen May 7

Elpida 30.79 bln yen (49.39 bln yen) 30.45 bln yen May 12

NOTE: Estimates are based on data from Thomson Reuters I/B/E/S.

* Figures are operating profit/loss and numbers for Samsung and Toshiba are for the entire company, not just for the chips business.

($1=1118.1 Won)

(Additional reporting by Kiyoshi Takenaka in TOKYO; Editing by Anshuman Daga)

feeds.reuters.com

Singapore revalues, Asian currencies jump

admin — Thu, 15 Apr 2010 05:00:34 +0000

The positive tone to risk appetite is keeping the USD on the back foot and for once FX attention has turned away from events in Greece. Before elaborating further and staying with Greece, it’s worth highlighting that the outcome of Greece’s note auction was reasonably solid, with more debt than anticipated being sold. However, the cost of borrowing for Greece rose compared to the previous auction in January, which means that the Greece will still suffer higher funding costs to roll over debt.

The positive reception to the debt offering was not particularly surprising given that it followed so closely after the EU/IMF loan package announcement but it is difficult to see sentiment for Greece and the EUR for that matter, getting much of a lift. The main positive for the EUR is the fact that market positioning remains very short but EUR/USD is likely to struggle to make much headway above technical resistance around 1.3653.

More interestingly Asian central banks are continuing on the track towards fighting rising inflation pressure and Asian currencies, in particular the SGD, were boosted by the Monetary Authority of Singapore (MAS) decision to revalue its currency. Singapore has moved back to a policy of a “modest and gradual appreciation” of the SGD from a policy of zero appreciation, which obviously implies openness to further FX appreciation in the weeks and months ahead.

The rationale for the decision was clear and as revealed in the strong first quarter Singapore GDP data which revealed a 13.1% annual rise. Stronger growth is fuelling growing inflationary concern and to combat this Singapore’s MAS will allow greater SGD appreciation. The reaction in other Asian currencies was also positive, with markets (quite rightly in my view) that other Asian central banks will be more tolerant of currency strength in their respective currencies.

Moreover, Singapore’s move was pre-emptive, perhaps with one eye on an imminent revaluation in China. The recent easing in tensions between the US and China has if anything increased the likelihood that China revalues its currency, the CNY, sooner rather than later, and most likely before the end of Q2 2010. Whatever the rationale, strengthening inflation pressure across the region, will mean a less FX interventionist stance in Asia, and likely stronger currencies over coming months.

Published on Wed, Apr 14 2010, 07:59 GMT

fxstreet.com

Why Buy Asian FX (Part 1)

admin — Wed, 31 Mar 2010 13:35:11 +0000

Given all the attention on Greece and European fiscal/debt woes over recent weeks it’s been easy to forget about the success story of Asian economies. Of course, there has been a lot of attention on China and the international pressure to revalue its currency. However, the stability and resilience of Asian economies has been impressive throughout the financial crisis and recent Greek saga, helping to boost the attraction of Asian currencies.

Asia has managed to avoid the fiscal/debt problems associated with many developed economies, due to much better fiscal management over recent years. There are a couple of exceptions however, including the Philippines and India, but the fiscal positions in these countries have seen an improvement and are unlikely to lead to anywhere near the same sort of problems associated with Greece and other European countries.

So far this year capital inflows into Asian equity markets have much been stronger than 2009, albeit after a rocky start to the year when flows dried up due to rising risk aversion. Since then inflows have resumed strongly. The comparison to 2008 is even more dramatic as much of Asia registered significant capital outflows that year. South Korea, India and Taiwan, respectively, have led the way in term of inflows into equity markets in 2010, with inflows of $4.3 billion, $3.7 billion and $3.3 billion, respectively.

It is no coincidence that Asian currencies are most sensitive to the performance of Asian equity markets, with strong capital inflows and rising equities leading to stronger currency performance. Asia is set to continue to be a strong destination for equity flows over coming months, which given the high Asian equity correlation with local currencies, will lead to further appreciation in most Asian FX. A likely CNY revaluation in China will also help to fuel further Asian FX upside.

Published on Wed, Mar 31 2010, 09:09 GMT

fxstreet.com

Asian stocks lower amid spike in China inflation (AP)

admin — Wed, 10 Mar 2010 19:10:55 +0000

’s weaker growth tempered confidence in the regional economic rebound.
Most markets were modestly higher in the first two hours of trading but reversed course as the latest figures raised doubts about the outlook for major economies.
fell below $82 a barrel amid signs of tepid U.S. crude demand and the dollar lost ground against the yen while rising slightly versus the euro.
China’s inflation rate jumped to 2.7 percent in February over a year earlier from 1.5 percent in January, adding to pressure on Beijing to prevent overheating without derailing recovery.
Japan, meanwhile, cut its reading of fourth quarter growth to an annualized 3.8 percent from the initial estimate of 4.6 percent. That underscored the patchy recovery in the world’s No. 2 economy.
In Australia too, there was a break in the recent slew of positive economic news. The
edged up slightly to 5.3 percent in February, the first rise since peaking at 5.8 percent last October.
stock average was up 88.91 points, or 0.9 percent, to 10,653.70 while
lost 74.07, or 0.4 percent, to 21,134.22.
South Korea’s Kospi was off 0.2 percent at 1,659.35 and China’s Shanghai benchmark slipped 0.1 percent to 3,047.92.
Elsewhere, Australia’s index fell 0.1 percent and Singapore’s market also shed 0.1 percent. India’s Sensex added 0.1 percent.
Oil prices were lower in Asia. Benchmark crude for April delivery was down 51 cents to $81.58 a barrel in
. The contract rose 60 cents to settle at $82.09 on Wednesday.
In currencies, the dollar fell to 90.37 yen from 90.49 yen. The euro fell to $1.3646 from $1.3654.

us.rd.yahoo.com

The euro gained in the Asian session

admin — Sun, 07 Mar 2010 22:47:59 +0000

Mon, Mar 8 2010, 06:16 GMT
Major currencies starting trading this week gaining against the dollar extending its correctional move started by the end of last week. The USDIX that tracks the dollar’s strength against a basket of major currencies fell in today’s Asian session to record a low of 80.13 and a high of 80.45, while it is currently trading around 80.25.
The euro dollar pair inclined slightly to record a high of 1.3690 and a low of 1.3636, having the union currency trading around 1.3675. The pair is currently in an attempt to breach the resistance level of 1.3675, and momentum indicators on the four hour charts saying the pair is trading in the overbought area, that makes us expect the pair to decline slightly later today. The 3720 level remains a resistance, while the support could be found at 1.3585. However, the German industrial production will be released today that may affect the pair.
Regarding the pound dollar pair, it is trading between a high of 1.5186 and a low of 1.5128, having the royal currency trading around 1.5170. The pair is having a resistance at 1.5230 along with a support at 1.5005, while the stochastic oscillator on the daily scale is supporting the upside, which makes us expect further gains today. Moreover, if the pair breached the 1.5230 level, it will target 1.5270.
Finally, the dollar fell slightly against the Japanese yen and the pair recorded a low of 90.33 and a high of 90.64, while it is currently trading around 90.45. Today’s resistance could be found at 91.40, while the support could be found at 88.60, and the pair is trading in the overbought area according to the four hour momentum indicators.

fxstreet.com

A number of fundamentals from Asian economies drive the revival of equity markets

admin — Sun, 14 Feb 2010 15:03:24 +0000

Sat, Feb 13 2010, 10:36 GMT
by ecPulse.com analysis team
Last week witnessed a number of major fundamentals from Asian economies pushing equity markets up after fluctuations witnessed in the beginning of the week. Easing inflation in China and declining unemployment in Australia were enough to increase investors’ appetite for risk, helping Asian indices to rise, but still fears regarding the situation in Greece ignited concern in financial markets that makes us expect sharp moves next week.
There is no doubt that investors are still worried about the strength of the global recovery, despite that the EU Economic Summit in Brussels carried good news concerning the deficit crisis in Greece. Finance Ministers agreed to aid Greece to narrow its deficit that rose to 12.7% of last year’s GDP, while the union’s limit is 3.0%.
Inflation in China eased to 1.5% in January compared with a previous 1.9%, and it came less than the forecasted 2.1%. Producer prices rose 4.3% in January from a year earlier, compared with 1.7% in the previous month, while the purchasing price index came at 5.5% from 3.0%.
However, inflationary pressures eased after the People’s Bank of China decided last month to force banks to raise their deposits by 0.5%, which is helping to control lending growth to avoid an asset bubble formation, which threatens growth in the world’s fastest growing economy. On the other hand, the Chinese Banking Regulator Commission said China will control credit growth to reach 7.5 trillion yuan ($1.1 trillion) during this year.
Monetary policy makers are still monitoring credit markets since the Chinese GDP grew 8.7% in 2009 more than the government’s target of 8.00%, raising concerns about a bubble in the properties and stocks market. Thus, the central bank may raise interest rates and loosen controls on the yuan in the upcoming period in order to keep inflation rate under control.
Moreover, a report showed Chinese exports climbed 21% in January from a year earlier recording $109 billion, while imports jumped 85.5% to record $95.43 billion. China’s trade balance surplus narrowed to $14.17 billion in January compared with a previous surplus of $18.43 billion, and it was anticipated to show a surplus of $20.00 billion.
Nevertheless, unemployment in Australia unexpectedly declined for the third straight month to 5.3% in January from 5.5% in December, while it was expected to incline to 5.6%. Employment change rose for the fifth straight month and it came at 52.7 thousand in January compared with a prior revised 37.5 thousand from 35.2 thousand, while forecasts referred to 15.0 thousand.
Such improvements in the labor market are proving that the business sector is much stronger and demand for workers is increasing alongside better sales and advancing exports. Demand from China for resources is inclining especially with the nation’s manufacturing sector rebounding, while commodities prices are recovering from last year’s low records adding to exports value.
Better conditions in the labor market are adding pressures on the Reserve Bank to raise interest rates next month, after they were kept at 3.75% in February to give more chance for earlier changes to show its effect on markets. The RBA raised borrowing costs by 25 basis points in December following two similar decisions in October and November to become the first central bank in the world to raise its benchmark three times in 2009.
As for Japan, the current account surplus narrowed to 900.8 billion in December compared with a previous surplus of 1103.0 billion yen in November, while the adjusted current account surplus came at 1100.5 billion yen following a surplus of 1304.8 billion yen.
The nation’s trade balance surplus widened to 631.2 billion yen from 490.6 billion yen, and it came less than market projections of 669.4 billion yen. The report showed Japanese exports gained on the year for the first time 15 months that makes us believe the world’s second largest economy will gain back the support of the exports sector after a long absence. Overseas shipments rose 11.7% in December from a year earlier giving hope for Japanese manufacturers after a prolonged drop.
Yet, The Bank of Korea decided to keep interest rates steady at the low record of 2.00% for the 12th straight month, inline with market expectations. Policy makers aim at giving the economy more time to benefit from low borrowing costs to support recovery in Asia’s fourth largest economy.
Mixed fundamentals seen recently in South Korea besides the government’s pressures, forced Governor Lee to keep rates steady. The Korean Finance Minister said “it is premature for South Korea to pursue an aggressive exit strategy such as an interest rate increase”, which makes us expect interest rates not to be raised in the first half of this year.
The MSCI Asia Pacific Index ended Friday’s trading by climbing 0.6% to 116.70. As for Nikkei 225 it ended Friday’s trading by rising 1.29% to close at 10,092.20 points. Meanwhile the S&P/ASX 200 closed on Friday at 4562.10 after rising 0.17%. Hang Seng ended Friday’s trading by falling 0.11% to close at 20268.69 points.
Dear reader, our tour in Asian economies this came to an end, and we are waiting for more fundamentals to be released this week that may help us figure out where the Asian region is heading, towards recovery or still held by the recession?

fxstreet.com

Asian Session: China Raises Reserve Ratio & Scares Risk Takers

admin — Wed, 27 Jan 2010 01:43:17 +0000

Tue, Jan 26 2010, 09:07 GMT
USD rallied back in the Asian session, as news that China was againraising its reserve requirements on select banks and S&Ps loweringof Japans outlook spooked investors. Yesterday, Wall Street was able toclose on a postive note, but news from China and Japan clouded thesentiment.The Nikkei closed down -1.78%, while Shanghai was down-2.42%. After an encouraging start, the EURUSD traded higher to 1.4180and pushing JPY cross higher as well, but around midday sentimentshifted and risk correlated trades tumbled. With Australia on holiday,Tokyo were the main players in AUD, selling the pair down to 0.8960 ashigh beta trades came under the knife. Outside Asia, political issuesin the US continued to also weigh on risk taking, particularlyBernanke’s potential confirmation of a second term. While the WhiteHouse sounds confident that the Senate will confirm the currentchairman, and positive comment have helped ease concerns, Obama publicmandate is currently being questioned, a rogue senators effecting thevote should be priced in.
In Japan, the BoJ voted unanimouslyto keep the policy rate unchanged at 0.1%. The meeting went widely asexpected with no new policies or adjustments to existingschemes/operations being announced. Core CPI forecast was revisedhigher for fiscal 2010 to -0.5% y/y from -0.8% y/y previously, whichwas followed up by FM Kan stating that Japan could be clearly out of adeflationary environment in 2-3 years with the BoJ help. While hedidn’t elaborate on what monetary policy tools the BoJ has to achievethis feat, they could include increasing the central banks monthlypurchases of JGB. Later in the day the S&P inexpertly loweredJapan’s sovereign rating outlook from ‘stable‘ to ‘negative’. Japan’srating remains at AA, fiscal outlook is unlikely to improve as the newgovernment spending plans restrict any positive adjustment to surgedebt and we would expect other rating agencies to also lower in thenear term.
UK GDP just sqeeked out recession with today q/qprint of 0.1% vs. 0.4% exp , -0.2% prior read (y/y -3.2% vs. -3.0%exp). Perhaps Chancellor Darling comments on today’s GDP data that heremains ‘cautious’ was more than just easing the markets optimism(however, historically UK GDP are revised upwards). The economic datawas very close to the bone and can easily be revised down. Thedisappointing report causedthe GBPUSD to collapse to 1.6150 from 1.6230.
R 2: 0.9148
R 1: 0.9090
CURRENT: 0.8973
S 1: 0.8940
S 2: 0.8905
R 2: 1.0635
R 1: 1.0610
CURRENT: 1.0612
S 1: 1.0530
S 2: 1.0465
R 2: 129.45
R 1: 128.35
CURRENT: 126.95
S 1: 124.40
S 2: 122.15
R 2: 13.015
R 1: 12.975
CURRENT: 12.911
S 1: 12.795
S 2: 12.685
S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot

fxstreet.com

Asian stocks slide but recover from lows

admin — Sun, 24 Jan 2010 11:42:37 +0000

SINGAPORE (Reuters) – Asian stocks fell on Monday after Wall Street’s worst three-day slide in 10 months, but moved off intra-day lows as a gain in U.S. futures signaled New York markets could recover some of last week’s losses.
European stocks, however, were seen likely to extend last week’s falls, hit by the White House’s plan to curb risk taking by financial institutions, weaker-than-expected corporate earnings and fears that the global recovery may be losing steam.
The U.S. dollar fell and high-yielding currencies edged up on signals that Federal Reserve Chairman Ben Bernanke was moving closer to being appointed for a second term, which re-awakened some investor appetite for riskier assets.
The Nikkei ended down 0.74 percent at a four-week closing low as a stronger yen weighed on shares of exporters such as Toyota Motor Corp, but the index pared early losses of up to 1.2 percent.
The MSCI index for Asia ex-Japan shares was down 0.8 percent but also off the day’s lows.
“Gains in U.S. stock futures prompted investors to expect a rebound on Wall Street after sharp falls, while buying on dips appeared as the Nikkei has fallen below its 25-day moving average,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
U.S. stock futures rose 0.5 percent, pointing to a firmer open later in the day.
Wall Street stocks fell as much as 2.7 percent on Friday on
worries over President Barack Obama’s plan to curb banks and after Google Inc posted strong revenue growth that nevertheless disappointed some investors, hitting tech shares.
With the sudden loss of leadership from the financial and tech sectors, which have led a global rally in recent months, analysts are unsure if equities will continue to sink. Some investors fear the global economic recovery may be slowing, which would further impede corporate profit growth, and a number of technical indicators point to more market weakness.
But some key Asian stocks rebounded on perceptions they had been oversold, including Hong Kong’s Henderson Land and Korea’s Samsung Electronics. Henderson Land rose 1.6 percent while Samsung Electronics added 2 percent.
Other markets also showed signs that investor risk appetite may be recovering after global markets recoiled last week on a host of unsettling factors.
Fitch upgraded Indonesia’s sovereign credit rating to one notch below investment grade on Monday, giving a vote of confidence to one of Asia’s strongest economies that has become a big favorite to investors across the world.
The upgrade of Indonesia’s long-term foreign and local currency ratings tightened spreads on credit default swaps and pulled the rupiah off intraday lows. Analysts said an investment grade rating was likely in the next few years.
In foreign exchange markets, high-yielding currencies like the Aussie and the kiwi rose, inching up to $0.9060 and $0.7145 respectively, from $0.9003 and $0.7110 late on Friday.
Investors were also spooked last week after several key senators announced their opposition to Bernanke’s reappointment, but the top Senate Republican on Sunday predicted confirmation, providing support to high-yielding assets.
The U.S. dollar edged up against the yen to 90.20 yen, from 89.87 yen late on Friday in New York but fell about 0.1 percent against a basket of six currencies.
The yen had struck a five-week high against the dollar and a nine-month high on the euro on Friday as investors rushed toward safe-haven assets.
Still, demand for riskier assets and higher-yielding currencies is likely to remain subdued amid rising concerns over Greece’s fiscal problems; worries that China’s efforts to curb its surging economy may impair global growth and fears that the populist turn at the White House might impact U.S. bank earnings.
Traders are awaiting investors’ response to Greece’s proposed issue of a 5-year benchmark bond issue later on Monday as a test of investor appetite, analysts said.
In other markets, crude oil steadied near its four-week low of below $75 a barrel, while spot gold trekked upward to $1,100.80 per ounce from the New York close of $1,091.65 as the dollar edged down and investors bet that the fall in bullion prices last week was overdone.

feeds.reuters.com

Asian stocks slide but recover from lows (Reuters)

admin — Sun, 24 Jan 2010 11:34:28 +0000

's worst three-day slide in 10 months, but moved off intra-day lows as a gain in U.S. futures signaled
could recover some of last week's losses.
European stocks (.FTEU3), however, were seen likely to extend last week's falls, hit by the White House's plan to curb risk taking by
, weaker-than-expected corporate earnings and fears that the global recovery may be losing steam.
The U.S. dollar fell and high-yielding currencies edged up on signals that
was moving closer to being appointed for a second term, which re-awakened some investor appetite for riskier assets.
(.N225) ended down 0.74 percent at a four-week closing low as a stronger yen weighed on shares of exporters such as
(7203.T), but the index pared early losses of up to 1.2 percent. (.T)
for Asia ex-Japan shares (.MIAPJ0000PUS) was down 0.8 percent but also off the day's lows.
U.S. stock futures
prompted investors to expect a rebound on Wall Street after sharp falls, while buying on dips appeared as the Nikkei has fallen below its 25-day moving average,” said Mitsushige Akino, chief
.
U.S. stock futures rose 0.5 percent, pointing to a firmer open later in the day.
fell as much as 2.7 percent on Friday on
.O) posted strong revenue growth that nevertheless disappointed some investors, hitting tech shares. (.N)
With the sudden loss of leadership from the financial and tech sectors, which have led a global rally in recent months, analysts are unsure if equities will continue to sink. Some investors fear the global economic recovery may be slowing, which would further impede
, and a number of
to more market weakness.
But some key Asian stocks rebounded on perceptions they had been oversold, including
0012.HK
(005930.KS). Henderson Land rose 1.6 percent while Samsung Electronics added 2 percent.
Other markets also showed signs that investor risk appetite may be recovering after global markets recoiled last week on a host of unsettling factors.
's sovereign credit rating to one notch below investment grade on Monday, giving a vote of confidence to one of Asia's strongest economies that has become a big favorite to investors across the world.
and pulled the rupiah off intraday lows. Analysts said an investment grade rating was likely in the next few years.
In foreign exchange markets, high-yielding currencies like the Aussie and the kiwi rose, inching up to $0.9060 and $0.7145 respectively, from $0.9003 and $0.7110 late on Friday.
Investors were also spooked last week after several key senators announced their opposition to Bernanke's reappointment, but the top Senate Republican on Sunday predicted confirmation, providing support to high-yielding assets.
The U.S. dollar edged up against the yen to 90.20 yen, from 89.87 yen late on Friday in
but fell about 0.1 percent against a basket of six currencies (.DXY).
The yen had struck a five-week high against the dollar and a nine-month high on the euro on Friday as investors rushed toward safe-haven assets.
Still, demand for riskier assets and higher-yielding currencies is likely to remain subdued amid rising concerns over Greece's fiscal problems; worries that China's efforts to curb its surging economy may impair global growth and fears that the populist turn at the White House might impact U.S. bank earnings.
Traders are awaiting investors' response to Greece's proposed issue of a 5-year benchmark bond issue later on Monday as a test of investor appetite, analysts said.
In other markets,
steadied near its four-week low of below $75 a barrel, while spot gold trekked upward to $1,100.80 per ounce from the New York close of $1,091.65 as the dollar edged down and investors bet that the fall in
last week was overdone.

us.rd.yahoo.com

Asian stocks lower after China’s economy surges (AP)

admin — Wed, 20 Jan 2010 16:08:00 +0000

dropped Thursday after China’s economy surged last quarter, adding to worries about Beijing’s ability to prevent overheating without derailing the recovery.
Major markets were down by less than 1 percent, following sharp losses on
.
rose while the dollar gained against the yen and euro.
, declaring itself the first country to recover from the global crisis, said its economy grew 10.7 percent in the fourth quarter and 8.7 percent for all of 2009, blowing away forecasts.
The dizzying growth, along with government figures showing inflation on the rise, means China is likely to take additional measures rein in bank lending and remove extra money from the system to help cool the economy.
Analysts said uncertainties about what precise steps China will take and when to keep its economy from overheating weighed on investors. Beijing’s policymakers have yet to telegraph clear plans for handling key challenges like asset bubbles, inflation and the country’s currency, analysts said.
“Investors are concerned about how China is going to deal with the situation. The bottom line is they don’t know what to expect and what the effects will be on the economy and the region,” said Thomas Lam, group chief economist at financial services firm OSK-DMG in Singapore.
fell 122.91 points, or 0.6 percent, to 21,163.26 and China’s Shanghai benchmark was off 14.71, or 0.5 percent, to 3,137.14.
Elsewhere, Taiwan’s index lost 1.3 percent and Australia’s stock measure was down 0.8 percent. Singapore’s market retreated 0.6 percent.
Bucking the region’s declines was Japan, where the
stock average rose 130.64, or 1.2 percent, to 10,868.16. South Korea’s Kospi was up 0.1 percent,
Disappointing corporate results in the U.S. contributed to a steep fall on
overnight.
The Dow fell 122.28, or 1.1 percent, to 10,603.15, its biggest point loss since Dec. 17 and its biggest percentage drop since Dec. 31. The Dow had been down as much as 208 points.
fell 12.19, or 1.1 percent, to 1,138.04, and the
fell 29.15, or 1.3 percent, to 2,291.25.
rose in Asia, with benchmark crude for March delivery adding 16 cents to $77.90 a barrel. The contract fell $1.58 to settle at $77.74 on Wednesday.
The February contract expired Wednesday, ending down $1.40 at $77.62.
The dollar strengthened to 91.64 yen from 92.22 yen. The euro was lower at $1.4088 from $1.4104.

us.rd.yahoo.com