Time to book profit as Asian rally slows
The surge on Asian bourses slowed down yesterday from a six-week high recorded on Monday. However, the indices moved in a narrow range.
Most markets ticked higher in subdued trading as investors await more clues about the health of the world economy. Market players are cautious ahead of reports on the region's two biggest economies, China and Japan, that are due today. Asian stocks drifted lower as investors paused in their recent chase for riskier assets. Investors appeared to be searching for reasons to stump up more money as a buoyant mood the previous day wore off, and some traders said this was an opportunity to take profits.
The MSCI index of Asian shares outside Japan was little changed, after having hit its highest level in over six weeks on Monday, lifted by encouraging US economic data. Japan's Nikkei-225 stock average after hitting its highest close since January 22 on Monday, fell 0.17 per cent, or 18.27 points, to close at 10587.65 points. Hong Kong's Hang Seng added 0.61 per cent, or 24.91 points, to end the day at 4127.03 points. India's Bombay Stock Exchange Sensex was also closed flat as the market bellwether shed 50.96 points, or 0.30 per cent, to close the session at 17051.64 points.
South Korea's main benchmark edged up 0.1 per cent. Shanghai's market climbed 0.52 per cent, while markets in Australia, Taiwan and Singapore rose as well.
The subdued tone looked set to carry over into Europe. Financial spread betters expected Britain's FTSE-100 to open lower, Germany's DAX to open unchanged to down seven points and France's CAC-40 to open up marginally. Fujitsu shares on Japan bourse extended losses. But makers of 3D TVs, Panasonic and Sony, gained after outlining their sales plans for their new products.
"Given a lack of reasons to really push the Nikkei higher and the fact that it rose over 200 points yesterday, this is a good level for a bit of profit-taking," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
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