Asian stocks weak on world bank growth downgrade
Asian stock markets were weak on Wednesday, dragged down by the World Bank’s lower global growth forecast.
The bank cut its forecast for global economic growth this year to 2.8 percent from the 3.2 percent it forecast in January.
The downgrade dampened enthusiasm among traders who had hoped stronger growth would fuel demand for Asian goods. But losses were contained by recent data such as solid U.S. hiring and stronger Chinese exports that suggest prospects for growth aren’t entirely pessimistic.
Hong Kong’s Hang Seng was down 0.4 percent to 23,228.47 and Australia’s S&P/ASX shed 0.3 percent to 5,454.60. Seoul’s Kopsi dropped 0.2 percent to 2,008.29 and China’s Shanghai Composite fell 0.3 percent to 2,047.09.
Japan’s Nikkei 225 was in positive territory, up 0.3 percent to 15,040.34, helped by indications that a downturn from a sales tax hike instituted in April might not be as severe as originally expected. India’s Sensex was up 0.2 percent to 25,636.41, continuing a rising trend following the election of a new pro-business government.
The World Bank’s gloomier outlook helped put the brakes on sentiment that had been on the upswing. Still, IG Group analyst Ryan Huang said the general trend for growth is positive after the European Central Bank announced additional monetary stimulus.
“Last week’s monetary policy decision by the ECB to cut rates should also set the eurozone on course for recovery and help developing countries as a market for their exports,” Hwang said in a market commentary. “That will be a further boost for China.”
A run of record highs in the U.S. stock market came to an end Tuesday as the Standard & Poor’s 500 index lost ground for just the second time this month.
The index slipped 0.48 of point, or 0.02 percent, to close at 1,950.79 on a quiet day for trading. The Dow Jones industrial average rose 2.82 points, or 0.02 percent, to 16,945.92, while the Nasdaq picked up 1.75 points, or 0.04 percent, to 4,338.
In Europe, Germany’s DAX ended Tuesday 0.2 percent higher at 10,028.80, having earlier risen to a fresh high of 10,033. Elsewhere, the CAC-40 in France rose 0.1 percent to 4,595, while the FTSE 100 index of leading British shares was unchanged at 6,873.55.
Oil prices rose ahead of OPEC’s meeting in Vienna on Wednesday to decide whether to boost production. Benchmark U.S. crude for July delivery was up 12 cents to $104.47 a barrel in electronic trading on the New York Mercantile Exchange.
In currency trading, the dollar fell to 102.28 yen from 102.33 late Tuesday. The euro slipped to $1.3543 from $1.3544.
Source: AP
