No debt US deal hurts shares
City Index July 25, 2011 9:24 PM
<p>Stocks and oil declined across the Asian region for the first time in five days, while gold rallied to a record as U.S. President Barack […]</p>
Stocks and oil declined across the Asian region for the first time in five days, while gold rallied to a record as U.S. President Barack Obama and Congress failed to reach a deal on raising the debt limit, intensifying concern the nation could default.
The MSCI Asia Pacific Index fell 1.1% as of in afternoon Tokyo trade. Japan’s Nikkei 225 Stock Average fell 0.8%, retreating from its highest level since July 8, South Korea’s Kospi Index slumped 1.1%, and Australia’s S&P/ASX 200 Index slipped 1.5%.
The Shanghai Composite Index tumbled 2.1%, led by a plunge in railway shares after two high-speed trains collided in the eastern province of Zhejiang on July 23, killing at least 35 people and injuring 210. Secretary of State Hillary Clinton reassured China, the top holder of American treasuries, that the U.S. will resolve its impasse over the debt ceiling and improve the country’s long-term fiscal outlook.Clinton noted that balancing the global economic order will require changes from both the U.S. and in Asia. While the U.S. must save more and borrow less, she said, Asia must do more to foster domestic demand.
In other economic news, Singapore’s inflation accelerated to the fastest pace since January as food and housing costs increased, sustaining pressure on the central bank to allow the currency to appreciate and contain price gains. The consumer price index rose 5.2% last month from a year earlier, the Department of Statistics said in a statement today, mostly matching expectations.
In Australia, retail investment group Premier Investments (PMV) – whose shares fell 2.3% – announced more profit downgrades as a result of weak spending conditions. Premier also plans to close around 50 stores out of a total store base in excess of 800. The news doesn’t bode well for Australian shopping centre owners like Stockland (SGP) and Westfield Retail Trust (WRT). Stockland (SGP) plans to spend around $2.2bn through to the end of FY12 on its current commercial project pipeline.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.