Asian stock markets fall amid recovery doubts

[December 18, 2009]  BANGKOK (AP) -- Asian stock markets retreated Friday as worries -- from weak job figures in the U.S. to the prospect of more stringent capital requirements for banks -- checked appetite for riskier assets. European indexes rose.

Most Asian markets, fatigued after a massive rally since March, were down about 1 percent or less while the dollar fell from a three-month high against the euro but rose versus the yen.

Also helping to dampen sentiment was news that the Bank for International Settlements -- a global financial standards setter -- is pressing ahead with a 2012 implementation of more stringent capital requirements for banks that could force some to tap shareholders for cash.

Financial stocks, particularly in Japan, piled on big gains earlier in the week after reports the requirements would be delayed a decade or more.

"Trading has been anemic over the past two to three weeks. Globally too, stocks have struggled as the dollar has been inching up. Sovereign debt concerns have added to the pressure. The economic outlook remains murky though overall the worlds seems better placed," said brokerage India Infoline in a report.

Investors have been looking for signs that the nine-month advance in stock markets is justified by improvements in the economy. At the same time, as year-end approaches many investors are also eager to secure gains for 2009.

Developments in the U.S. on Thursday added to doubts about the strength of the recovery.

The government reported an unexpected rise in unemployment claims with the number of new jobless claims rose to 480,000 last week, up 7,000 from the previous week. On the corporate front, FedEx Corp. provided a cautious forecast for the quarter that ends in February after reporting its fiscal second-quarter earnings fell 30 percent.

As trading got underway in Europe, France's CAC-40 was up 0.4 percent, Britain's FTSE 100 rose 0.1 percent and Germany's DAX added 0.6 percent. Futures pointed to a mixed session on Wall Street. Dow futures were up 32 points, or 0.3 percent, at 10,365 and S&P futures declined 11.30, or 1 percent, to 1,099.10.

Earlier in Asia, Japan's Nikkei 225 stock average fell 21.75, or 0.2 percent, to 10,142.05 and Hong Kong's Hang Seng shed 171.75, or 0.8 percent, to 21,175.88. South Korea's Kospi eased 0.1 percent to 1,647.04.

Australia's index dropped 0.4 percent and China's Shanghai market dived 2.1 percent on worries a stronger U.S. dollar and new stock listings will further drain liquidity.

Elswhere, India's Sensex lost 0.9 percent and Singapore's market was 0.3 percent lower.

In the U.S. on Thursday, stocks were pressured by the dollar rising, the weak job figures and the Federal Reserve indicating it would start undoing some of its emergency supports next year as economic recovery gathers pace. The Fed's signal added to the debate about how quickly it would begin to raise interest rates from ultra-low levels.

The Dow fell 132.86, or 1.3 percent, to 10,308.26. The broader Standard & Poor's 500 index fell 13.10, or 1.2 percent, to 1,096.08, and the Nasdaq composite index fell 26.89, or 1.2 percent, to 2,180.05.

Oil prices rose above $73 a barrel in Asia on expectations OPEC will leave production unchanged at its meeting next week.

Benchmark crude for January delivery was up 67 cents to $72.32 in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract fell 1 cent to settle at $72.65

In currencies, the dollar rose to 90.25 yen from 89.96 yen. The euro rose to $1.4386 from $1.4337.

[Associated Press]

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