The stocks in Japan dropped sharply on Friday in a normally frail session for the main Asian market with the investors remaining wary prior to the speech by Ben Bernanke, the Federal Reserve Chairman.
The stock average of Nikkei, Japan (JP: 100000018 -1.60%) fell 1.1%, while that of Kospi, South Africa (KR: SEU -0.07%) dropped 0.2% and S&P/ASX 200 index, Australia (AU:XJO +0.0093%) also declined 0.1%.
Hang Seng Index, Hong Kong (HK:HSI -0.36%) drooped down 0.3% and Shanghai Composite Index (CN:000001 -0.25% CN:000001 -0.25% ) sold flat as it persisted to drift over 3 ½ year lows.
On Thursday, the US stocks stepped in with universal stock losses as investors were concerned prior to the speech by Bernanke that central banks won’t enter to offer support for the global economy.
Hong Kong and Shanghai indexes are exhibiting month-to-date losses of 1.5% and 2.4% respectively, while Nikkei Average has profited 2.2% till now this month. Kospi has gained 1.1% and S&P/ASX 200 is up 1%.
The strategists at Credit Agricole told that the investors would probably take gains Friday as they stayed cautious before Bernanke’s speech. They said that considering that good news had come in, the disappointment risks are high and the risk assets will step in under high pressure if there is any kind of under delivery on easing of policy.
Michael Gavin from Barclays Capital stated that markets had been hovering sideways in the past few weeks since they have had less chance to know about the intentions of policy makers in several vital areas, chiefly but not solely in Europe.
He said that this would probably be the situation till the announcement of high-stakes policy is made, citing the meeting of European Central Bank in the coming week as a probable source of such an announcement.
The market in Tokyo came under remarkable selling pressure the data exhibited a surprisingly negative impression on industrial production for the month of July, with the figures appearing on the heels of the downbeat retail sales stats Thursday.
The Japanese companies that were amongst the top decliners in Tokyo included Suzuki Motor Corp. (JP:7269 -3.51% SZKMY +3.83%) down 3.4%, Honda Motor Co. (JP:7267 -2.41%)lower by 2%, and Nikon Corp. (JP:7731 -3.11% NINOY -2.42%) drop by 2.8%.
The steel mill owners in Japan also lost ground following a Nikkei report stating that the entry of cheaper Chinese steel has compelled few Japanese producers to charge asset impairment fee for their mills.
