Asian markets break winning streak, falling slightly

<p>Asian stocks broke a three day winning streak as the Yen continued to rally, pressuring Japanese exporters. Two key investment banks also lowered their forecast […]</p>

Asian stocks broke a three day winning streak as the Yen continued to rally, pressuring Japanese exporters. Two key investment banks also lowered their forecast for Chinese growth, albeit only modestly. The MSCI Asia Pacific Index lost 1.2% in early afternoon Tokyo trading while S&P500 Index futures fell 0.8%. About two shares retreated for each one that advanced on MSCI’s Asia Pacific index. Losses in the three weeks ending Aug. 12 dragged valuations on the regional index down to 12.1x consensus earnings last week, the lowest since December 2008.

South Korea’s Kospi Index and Taiwan’s Taiex Index dropped at least 2%, leading declines in the region again today as technology shares slumped. Japan’s Nikkei 225 Stock Average lost 1% with Sony down 2.1%. Nissan Motor – generating around a third of its revenue in North America – retreated 3.1%. Australian shares continued to report with conglomerate Wesfarmers and wealth manager AMP matching market expectations. Wesfarmers flat while AMP was up 2.9%.

Australian beer giant Foster’s was again the talk of M&A activity as SABMiller made its June indicative proposal to acquire Fosters official, putting the A$4.90 offer to shareholders. Melbourne-based Foster’s affirmed its rejection of SABMiller’s bid today, saying the offer “significantly undervalues” it. If successful, the deal would be the biggest takeover of an Australian company since 2008, when Westpac acquired St. George Bank for A$17.9bn.

The Yen’s appreciation continues to be the key currency news across the region. It touched a high of 76.41 against the US dollar after the stock market closed yesterday in Tokyo, approaching its post-World War II high of 76.25 Yen reached on March 17. The Australian dollar also rose today to touch a high of $1.0557 – its 120 day moving average – before falling back to settle at $1.05 in later afternoon trade.

In energy markets, crude oil for September delivery decreased as much as 0.6% to $87.02 a barrel before trading at $87.25 on the NYMEX, paring some of yesterday’s 1.1% increase. Crude supplies climbed 4.23m barrels last week, an Energy Department report showed.

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