Hong Kong: Asian markets edged lower with Chinese stocks falling after the country posted a wider trade surplus on weak imports, while fresh worries resurfaced over Europe's debt situation.
The Nikkei fell 0.2 percent to 9027.36, after earlier dropping below the 9000 level, the first time since February. Korea's KOSPI fell 0.3 percent. Australia's S&P ASX 200 traded flat as the Australian dollar touched its lowest level for five months as risk aversion spurs investors to move away from higher-yielding currencies. Singapore's Straits Times Index was down 0.3 percent.
Hong Kong's Hang Seng Index was down 1 percent and the China Shanghai SE Composite fell 0.2 percent.
Markets across the region were initially struggling to find direction in early trade, but declined in unison after the latest China economic data showed weak growth in April's imports, reflecting sluggish performance in the world's second biggest economy. A 4.9 percent increase in exports and 0.3 percent increase in imports both failed to meet economist expectations.
The Dow Jones Industrial Average dropped by 0.8 percent, its sixth consecutive session down. The euro was at USD 1.2941, hitting the lowest level since January overnight, while the yen strengthened 0.4 percent against the dollar to 79.620, signaling investors are moving into safe-haven assets. The price of oil slipped 0.5 percent to USD 96.34.
In addition to the ongoing coalition talks Greece, investors were concerned that the Mediterranean country may not receive all of its next installment of bailout money. The eurozone governments agreed they will provide Greece with EUR4.2 billion in financing, but will hold back a further EUR1 billion (USD 1.3 billion), that will be handed over in June depending on Greece's funding needs. Meanwhile, Spain's 10-year borrowing rate rose above 6 percent for the first time this year.
The Nikkei is now down 12.2 percent from the index's highest point this year in late March. The decline in the market coincides with a strengthening of the yen against the dollar, making Japanese exports less competitive.
Today's decline was slowed by a surge in power companies. Tokyo Electric Power Company stock was up 10 percent after the government approved the utility's restructuring plan in exchange for a capital injection of JPY1 trillion (USD 12.6 billion). The state will have a 50 percent stake. Other Japanese power companies outperformed: Kansai Electric Power was up 6.5 percent and Chubu Electric Power was up 2.6 percent.
Continuing the trend of Japanese companies offering healthy forecasts, Toyota Motor Corp rose 1.7 percent after it released operating profit guidance of JPY1 trillion for the end of the current year ending March. The numbers met market expectations, and analysts note that carmaker tends to make conservative targets.
Dow Jones Newswires
First Published: Thursday, May 10, 2012, 11:07