Weak overseas leads may see Asian stocks flat today
City Index January 12, 2012 2:30 AM
<p>Asian stocks are expected to open flat after a similar finish overnight. In the US, the S&P500 was up slightly as around three stocks advanced […]</p>
Asian stocks are expected to open flat after a similar finish overnight.
In the US, the S&P500 was up slightly as around three stocks advanced for every two that declined. Banking and technology gains helped the market recover from an earlier slump.
The gains continue to see the US market near five month highs and consolidating around those levels. Risk assets responded favourably.
The Australian dollar was back above 1.03 against the US dollar in early morning Asian trade while copper managed to add 0.9% overnight, last at US$3.54/lb.
The Euro remains vulnerable, trading only slightly above 1.27 against the US dollar.
In regional economic news, Vietnam has signaled it may cut its policy interest rates and ease from a previously tightening bias towards levels more suitable under the current climate. The economy had been a shining light across Asia over the past few years as the rate of growth exploded from very low levels.
Vietnam is struggling to maintain its trade position, which faces a deficit, while the slowing rate of economic growth could potentially present a risk to the banking sector. Monetary policy is therefore expected to provide an offsetting stimulus in 2012 but the IMF has warned that cutting rates too much could cause a risk towards economic stability.