US concerns continue to drag Asian stocks down retail stocks lead Aussie stocks down

Asian markets went to negative territory today on the back of ratings agency Moody’s decision to review its credit rating on the US government. The MSCI Asia Pacific Index slid 0.5%, while futures on the Standard & Poor’s 500 Index sank 0.4%. The region was also focusing on the situation in India following deadly bombings in Mumbai. 

The US dollar declined 0.3% to $1.4212 per euro as of 1:23 p.m. in Tokyo, while the yield on 30-year Treasuries added one basis point. The cost of insuring Asian corporate and sovereign debt against default was the most since September. 

Japan’s Nikkei 225 Stock Average fell 0.7%, while South Korea’s Kospi Index declined 1.1%. The Bombay Stock Exchange Sensitive Index fell after three bombs in crowded neighborhoods of Mumbai killed at least 17 people last night. The attack was the deadliest terrorist strike since 2008, when a siege by 10 gunmen derailed peace talks with Pakistan. India’s Sensex has lost 9.8% this year, the second-worst performer among key indexes in the world’s 10 biggest markets, as the Reserve Bank of India boosted borrowing rates to tackle accelerating inflation. Companies on the measure are valued at 15 times estimated earnings, compared with 11 times for the MSCI Emerging Markets Index.

Singapore’s dollar pared gains after a trade ministry report showed the economy shrank in the second quarter. Singapore’s GDP for the three months to June 30 fell 7.8% on a seasonally adjusted and annualized basis, compared to a revised 27.2% increase in the first quarter of 2011. 

In Australia, the ASX200 was 1% lower in late afternoon trade with all eyes focused on the retail sector following an earnings downgrade by high-end department store operator David Jones yesterday. David Jones shares dropped as much as 18%, sending many other listed Australian retailers into negative territory. 

Mining giant Rio Tinto pared earlier losses after its second quarter production report. CEO Tom Albanese said “this quarter was also characterised by continued strong prices for most of our metals and minerals, but with worsening adverse exchange rates and some input cost pressures”.