Asia Markets Face Tough Times as Beijing and Tokyo Plea for Calm

Asian stock markets started the week with no clear direction in the absence of Tokyo closed for a holiday. In Hong Kong, the Hang Seng remains close to balance (+0.1%), while the Shanghai Composite lost 1.1%, and 0.3% yield in Seoul. For its part, the Taiwan Stock Exchange advance 0.3%, 0.5% and Sydney wins Singapore at 0.2%. Only the Bombay Stock Exchange is characterized by an increase of 0.8% after the announcement by the government-shock of opening up the Indian market to foreign competition in the distribution and air transport.

After the relief provided by the Fed on Thursday night (purchase of $ 40 billion per month of mortgages securitized), investors find some caution against a still uncertain global economic situation. On the foreign exchange market, the dollar continues to erode at a $ 1.3136 Euro (0.04% for the latter) in interbank trading in Asia, while the raw materials benefit from a deferral of investors to tangible assets. Gold gained 0.25% to $ 1,774 an ounce, while the WTI oil remains near $ 100 a barrel to $ 99.10 (+0.1%). On equity markets, the values ​​related to its popular base materials, including Sydney, hence the title BHP Billiton gained 2.9% and that of its rival Rio Tinto ahead at 1.7%.

The Tokyo Stock Exchange is closed, she could not respond to violent protests that erupted this weekend in 85 cities in China against Japanese interests. The tension between Beijing and Tokyo on the sovereignty of a chain of islands in the China Sea that both countries argue … Shops and production facilities and Panasonic Toyota Motors have been especially targeted and suffered damage … Yesterday, the Premier Minister of Japan Yoshihiko Noda asked Chinese authorities to ensure the safety of its citizens and its economic interests …

In addition, Hong Kong property companies are struggling this morning after the government announced measures to calm speculation in the property market of Hong Kong, became the most expensive in the world, partly because of the influx of buyers from mainland China. Finally, in India, investors welcomed the government’s plan to allow foreign groups to intervene in retailing, while they were so far limited to wholesale. Foreigners may also acquire a minority stake of up to 49% in the capital of Indian airlines, announced Prime Minister Manmohan Singh. Among the most spectacular movements observed this morning in Bombay, the action of the distributor Pantaloon Retail India jumped by over 17% and Kingfisher Airlines, a private airline in financial trouble, jumped nearly 20%!

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Markets Look To Halt Declines In Early Wednesday Trading

The U.S. equity markets limit their decline Wednesday after the release of a higher-than-expected promises of home sales in the United States, a good sign for the housing market.

To 11:30 am (New York time), the Dow Jones is stable at 13,102.6 points and the Nasdaq was down less than 0.1% at 3075.5 points, in volumes still anemic. Investors continue to limit their initiatives to 48 hours of highly anticipated speech of the President of the Federal Reserve in Jackson Hole.

‘Nervousness is probably the key word in today’s session, “said one trader. ‘The speech of Ben Bernanke approaching and investors are increasingly tempted to do nothing,’ he adds.

‘Who can blame them? Opinions are still very divided on the action of the Fed and everyone opts for an approach of ‘wait and see,” concludes the professional.

The trend has been boosted a bit later in the morning by the publication of promises of home sales for July, which rose 2.4% in July according to figures from the National Association of Realtors (NAR ).

By comparison, economists had forecast an increase of about 1% last month. The second estimate of GDP, published earlier in the morning, stood up to 1.7% against 1.5% in the first estimate, in line with expectations.

Still discovering the Fed Beige Book will be published in the second part of the session.

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China Economy Stimulus

In Asia, new speculation circulating this morning about the stimulus of the economy in China in preparation … The ‘China Securities Journal, asserts that Beijing is preparing policies “more proactive”, notably to encourage investment in infrastructure, adjust its monetary policy (a new lower reserve requirement ratio of banks would intervene soon) and reduce taxes.

Moreover, the official agency ‘Xinhua News’ evokes for its share of financial cooperation projects further between Beijing and Hong Kong … Beijing and would promote the use of the yuan in Hong Kong and could allow the establishment in China of funds listed (or trackers ETF) linked to the Hong Kong Stock Exchange.

Among the values ​​for this Wednesday morning, casino operators in Macau after a bounce on the restriction denied visas to Macao from China. These restrictions would therefore ultimately not on the agenda, according to local press … In Hong Kong, the title of Galaxy Entertainment takes 3.5% and Sands China 4.3%.

Finally, in Seoul, the share price Samsung Electronics rebounded 2.7% in spite of the preliminary injunction issued last night by a U.S. judge, which blocks the sale in the United States of the Galaxy Tab, the bottom shelf digital Samsung

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