Most Asia-Pacific markets drop on US recession worries

Most equities markets in the Asia-Pacific region were lower on Monday as analysts and investor worried about the possibility of recession in the US. Last week, the US Labor Department issued disappointing employment data for December, and reports from the Institute for Supply Management showed that manufacturing had contracted in the month and the service sector grew at its slowest pace in nine months. Some analysts were putting chances of a recession in the US at over 50 percent. While most markets in the region saw declines, the Shanghai Composite added 0.59 percent to 5,393.34 and India’s Sensex was up 0.61 percent to 10,812.65.

In Hong Kong, the Hang Seng was 1.24 percent lower to 27,179.49. South Korea’s Kospi index dropped 1.76 percent to 1,831.14. In Australia, the Sydney Ordinaries fell 2.27 percent to 6,240.4 while the S&P/ASX200 was down 2.3 percent to 6.161.6. The Straits Times index was 2.46 percent lower to 3,353.06 in Singapore. Taiwan’s Taiex plummeted 4.11 percent to 7,883.37 on declines in the semiconductors sector.

Tokyo’s markets were also lower on the session. The Nikkei 225 was down 1.3 percent to 14,500.55 and the Topix index fell 1.36 percent to 1,392.71 while the Mother’s market dropped 1.28 percent to 737.02. The electronics sector was mixed. Sony (TYO: 6758; NYSE: SNE) was up 0.7 percent to ¥5,830 after Time Warner (NYSE: TWX) said it will use the consumer electronics giant’s Blu-ray high definition DVD technology exclusively, leaving Toshiba’s (TYO: 6502; LSE: TOS) rival technology out in the cold. Toshiba dropped 2.3 percent to ¥783. Game console maker Nintendo (TYO: 7974; NAS: NTDOY; FWB: NTO) was also lower, falling 6.1 percent to ¥59,700. In the semiconductors sector, Elpida Memory (TYO: 6665) was down 2 percent to ¥3,450 while NEC Electronics (TYO: 6701; NAS: NIPNY) fell 2.1 percent to ¥2,380. Some retailers saw gains. Fast Retailing (TYO: 9983) added 3.1 percent to ¥8,050 on better sales in December from same period the previous year.

Continental European equities markets saw small gains on the session. The FTSE Eurofirst 300 added 0.01 percent to 1,457.79. The Dax and the CAC-40 each were 1.1 percent higher, to 7,817.17 and 5,452.83 respectively, while Madrid’s IBEX gained 0.44 percent to 14,667. Utilities were higher. EDF (Euronext: EEN) added 1.38 percent to €82.94 while Gaz de France (Euronext: GAZ) was up 1.47 percent to €41.97 and Suez (Euronext: SZE; NYSE: SZE) was 1.72 percent to €48.53. Eon (FWB: EOA; LSE: EON; NYSE: EON) added 2.11 percent to €150.69 while RWE (FWB: RWE) had the best day on the Dax with a gain of 3.09 percent to €100.72. There were declines among chipmakers. Infineon (FWB: IFX; NYSE: IFX) was down 4.3 percent to €7.36. Over on the CAC-40, builder Vinci (Euronext: DG) fell 5.97 percent to €42.72 while aerospace group EADS (Euronext: EAD; FWB: EAD) dropped 7.47 percent to €19.20.

London’s markets, on the other hand, saw declines. The FTSE 100 was down 0.14 percent to 6,339.5 while the FTSE 250 dropped 1.68 percent to 10,093.1. Pharmaceuticals groups, medical device makers and the energy sector saw gains. National Grid (LSE: NG) was up 2.33 percent to 856p while British Energy (LSE: BGY) added 571p for the best day on the 100. Among pharmaceuticals manufacturers, AstraZeneca (LSE: AZN; NYSE: AZN) was 2.84 percent higher to £21.70 and GlaxoSmithKline (LSE: GSK; NYSE: GSK) gained 3.68 percent to £13.21. Medical device maker Smith & Nephew (LSE: SN) was up 3.38 percent to 596.5p. Miners were down on the session, led by Xstrata (LSE: XTA) with a decline of 5.96 percent to £33.12. House builder Taylor Wimpey (LSE: TW) led losses on the 100 as it dropped 7.32 percent to 179.8p.

Wall Street was mixed at mid-afternoon in New York. The Dow Jones Industrial Average was 0.06 percent lower to 112,792.37 and the Nasdaq Composite had dropped 0.21 percent to 2,499.27, but the S&P 500 was up 0.09 percent to 1,412.84. While investors were more sure that the Federal Reserve will cut interest rates later this month, there were concerns over an incident between Iranian and US military vessels in the Straits of Hormuz over the weekend. Time Warner (NYSE: TWX) added 11 cents to $16.04 after it announced its decision to release high definition DVDs exclusively on Sony’s Blu-ray format. In the food and beverages sector, Krispy Kreme Doughnuts (NYSE: KKD) added 31 cents to $3.14 on the news that its chief executive has resigned.