Regional markets still lacking conviction

<p>Asian regional markets were again dragged lower on Europe’s failure to address the Greece issue. Europe’s shared currency weakened 0.6% to $1.4226 and retreated for […]</p>

Asian regional markets were again dragged lower on Europe’s failure to address the Greece issue. Europe’s shared currency weakened 0.6% to $1.4226 and retreated for a fourth day against the Japanese Yen in early afternoon Tokyo trading. The MSCI Asia Pacific Index slipped 0.3%, bound for the lowest close in three months. Futures on the Standard & Poor’s 500 Index decreased 0.5%. Crude declined 1.6% in New York, while copper sank 1.1% in London.

The MSCI Asia Pacific Index is extending seven consecutive weekly declines, this losing streak is the longest since 2004. Last week’s drop drove the index’s valuations to 14.2 times reported earnings, the lowest level since March 30. China’s Shanghai Composite Index fell 0.9%, bound for the lowest close in almost nine month. The news also comes as China battles raging floods in the south while parts of the north struggle to break out of a worsening drought. 

Reports also note China’s effort to cool home prices is damping the market for existing homes, with prices in May falling from the previous month in 23 of 70 cities measured. That’s more than the 16 cities that posted declines in April, data from the National Bureau of Statistics posted to its website June 18 showed. Existing home prices in Beijing fell 0.2% from April while those in Shanghai increased 0.2%. 

Japan’s Nikkei 225 Stock Average climbed 0.1%, snapping a two-day drop. Utilities rose, paced by Chubu Electric Power Co., amid signs the government may allow atomic reactors to be restarted following the worst nuclear accident in 25 years. In other corporate news, Mazda Motor jumped 3.1% after the automaker forecast it will return to profit in the year ending March 31. Olympus increased 3.9% after the optical-equipment maker forecast profit may more than double. 

In Australia, the ASX200 Index was trading 0.4% lower in late afternoon trade. Around 127 stocks were down, 58 up and 15 unchanged. Caltex Australia – the nation’s biggest oil refiner – dropped 6.6% after it forecast a drop in first-half operating profit because of plant disruptions and higher crude prices. The Australian dollar was initially up on bullish comments from Russian central bankers, noting the currency as a good buying opportunity as part of an overall diversification out of US$. The Australian dollar was however hurt by the European leads and was last trading down at A$/US$1.0562.

In commodities, Oil for July delivery slipped 1.5% to $91.59 a barrel on the New York Mercantile Exchange, retreating for a second day. Futures fell 2% on June 17, capping a 6.3% weekly slump that was the steepest since the period ended May 6. Copper for three-month delivery lost 1.2% to $8,989.50 a metric ton on the London Metal Exchange. Nickel, aluminum and lead also declined.

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