Published On: Tue, May 21st, 2013
News | By Gregory Bassett
All major asian indices down during early afternoon trading
The Nikkei, Hang Seng and S&P/ASX 200 were all down shortly after the midday break in Asia today after the Reserve Bank of Australia announced interest cuts to a record low. The knock on effect was seen throughout Asia, with regional benchmarks showing declines across the board — although the MSCI Asia Pacific was showing signs of resistance, clawing back a fall of 0.3 percent from earlier in the day.
The interest rate reduction came after the release of minutes from the RBA's meeting, which was held on May 7th. The minutes stated, "Conditions in the business sector, as assessed in surveys, generally had remained below average, possibly in part because the exchange rate had remained high". This, combined with previous data proving that housing rised with lower rates, lead Governor Glenn Stevens to back the slash of interest rates — which now sits at 2.75 percent.
The markets reacted swiftly, with banks and other financial institutions in the region steadily declining. Two of the biggest losers were Westpac Banking Corp and ICBC which had slid by 1.13 percent and 1.95 percent respectively by 1:17pm in Tokyo.
The Nikkei saw threatened to snap it's recent run of gains, which have been spurred on by the consistent decline of the Yen. The Tokyo benchmark looked positive upon opening this morning, with further gains taking place during early trading but hit a low of 15308.79 by 12:40pm before rising to 15356.71 in the following 20 minutes, leaving it little changed.
Had it not been for exporters and utilities, the Nikkei could have sunk uncontrollably. Mitsubishi Motors Corp lead the index with an advance of 22.60 percent, followed by Kobe Steel Corp and Tokuyama Corp who had made gains of 16.22 percent and 15.29 percent respectively by early afternoon trading. Sharp Corp, Pacific Metals Co Ltd and Mitsui Chemicals also saw a rise of 10 percent, emphasizing the weight that investors are putting into the Yen's movements.
At the other end of the scale, Tokyu Corp, Tokyu Dome Corp and Tokyu Land Corp occupied the top three spots for the days biggest losers in Tokyo. The group, who provide transportation and a plethora of leisure, real estate and hotel services throughout their subsidiaries, saw their prices fall across the board. Tokyu Corp topped the list with a decline of 4.04 percent, followed by Tokyu Dome Corp, who dropped by 3.82 percent and finally Tokyu Land Corp with a fall of 3.77%.
Gregory Bassett - Gregory previously worked for a leading financial news publication and is now assistant news editor of financialtrading.com.
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