Australian and Asian Report 12th April 2011

Asian markets are trading lower this morning, after Japanese nuclear-safety authorities raised their evaluation of the emergency at the Fukushima Daiichi power plant to level 7, the same level as the 1986 Chernobyl disaster. In Japan, technology stocks and automakers came under selling pressure, amid renewed worries about the post-quake recovery to production, after the minutes of the recent Bank of Japan meeting revealed concerns about the financial systems in the immediate aftermath of the earthquake. In Hong Kong, as a bearish credit and earnings outlook affected local banks, while a sharp pullback in crude-oil prices weighed on China Shenhua Energy. In South Korea, the Kospi index traded lower, ahead of Bank of Korea’ s interest rate decision. Nikkei 225 index is trading 2.0% lower, at 9,521.3. Hang Seng index is down 1.3%, at 23,980.1, while the Kospi index is trading 1.0% lower, at 2,101.1.

US markets finished mostly lower on Monday, as investors opted for a cautious approach, ahead of the start of first-quarter earnings season. Adding to the negative sentiment, the IMF cut its growth forecast for the US economy. Automobile stocks, Ford Motor and General Motors, retreated 3.1% and 2.4%, respectively, as China Association of Automobile Manufacturers stated that 2011 car sales growth may be weaker-than-expected. Technology stocks, IBM, Cisco and Novellus Systems, dropped between 0.1% and 2.3%, as S&P’s Equity Strategy Group downgraded the sector to “Market weight” from “Overweight” citing recent trends. Energy stocks, Halliburton and Schlumberger, dropped 2.5% and 2.3%, respectively, as oil price slipped below $110 per barrel. DJIA advanced slightly to 12,381.1. NASDAQ declined 0.3% or 8.9 points to 2,771.5. S&P 500 index closed 0.3% lower, at 1,324.5.