The values of Asian stocks fell sharply in Australian and New Zealand markets on Wednesday, upon getting distress signals from Wall Street. Investors got jittery as Dow Jones Industrial average fell by 2% on Tuesday, its biggest single day dip since Feb 4. The debt crisis in Greece also hurt the sentiments.
The indices in Australia and New Zealand fell by 1.5% and 1.2% respectively. Stocks in the energy sector dived 3% with Caltex dipping 6% as the news of fall in crude oil price reached markets.
“Investors are looking for cues from world markets, thinking about the Greek problem. It looks like things are going to get worse before the situation gets somewhat better,” said Greg Gibbs of RBS from Sydney.
Finance performed no better and was down 1.4%, with Westpac Banking dropping 2.2% as investors are worried about margins and revenues.
Despite performing better than expectations, News Corp, the parent company of Wall Street Journal, was reported running down 3.9%.Analysts say it has been hit by short term selling for gains by investors.
Markets in New Zealand, though running lower, performed better than Wall Street. ‘Fisher and Paykel’ is down 3% but not due to any pressure by sellers, it is just floating down.
Investors are waiting for the fiscal results from the telecom sector, and hence it is down by 1.4%
As far as Forex is concerned Euro is waging a losing battle against the greenback, as investors feel that the aid package of 110 billion Euros will not be able to solve the debt crisis that Greece is reeling under. Euro is down to $1.2989 from $1.3001 from Tuesday, which is a clear signal that the markets are not very comfortable with the aid package envisaged for Greece, feels Win Thin, a strategist, at Brown Brothers Harriman.
Markets are only confirming our worst fears that the aid package is not sufficient to lower the risk of default by Greece. The aid package is based on the premise that if market borrowing rates can be brought down, then Greece can issue new loan to the private sector and remain current on its current debt burden. But the probability of this happening is low, and this is what the markets fear.
Even Gold was down 60 cents, from its previous level and sold at $1171.60 per troy ounce. In situation like this Gold can not remain immune, said Jon Nadler, analyst at Kitco metals.
Google is seriously contemplating to start selling E-Books beginning this July, which will see it in the battle field with other major players like Amazon and Apple. Google has though about this for years now, and its service will be called Google Editions. This service will be different from its competitors as it will allow the reader to get books from many websites whereas its competitors have so far concentrated on proprietary tools.
Agricultural Bank of China is planning an IPO that could be the largest in the world so far, to the tune of $20-$30 billion, surpassing the previous highest IPO from VISA that amassed $19.7 billion in 2008. ABC is trying a listing at both the Shanghai and Hong Kong exchanges by the end of September.
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