The major stocks markets in Asia are trading in the negative territory on Tuesday, on concerns that rise in crude oil prices in the international markets might dampen the demand for most of the products in the region such as computers, cell phones and cars, and in turn, result in lower profits.
The stock markets in Australia, New Zealand, Japan, Singapore, Hong Kong and Indonesia are trading in the negative territory, while the markets in China, South Korea and Taiwan are trading in the positive territory with marginal gains over previous close.
The price of crude oil for June delivery rose by more than 2.5% to US$65.89 a barrel in New York.
Exporters and chemical companies led the decline in the Tokyo market, while the decision taken by Resmed, one of the leading producers of products for treatment of sleep disorders, to withdraw 300,000 of its products from the market, led the declines in the Australian market.
New Zealand market fell in the early trading on Tuesday, retreating from the near record level achieved the day before. The NZSX-50 index was down 13.15 points or 0.31% to 4188.49 at 10:20am. The NZX-50 index had closed on Monday at 4201.64, just 15 points short of the record of 4216.29 points reached on February 7.
The market leader Telecom fell 0.81% in the day's early trading. The second ranked share of the market, Fletcher Building, inched up 0.09%, while Contact Energy, another blue chip share of the market, eased 0.11%. Among the Australian companies listed in the New Zealand market Westpac Banking and ANZ Banking remained unchanged, while AMP dropped 0.74%. The brewer Lion Nathan gave up 0.10%, while the Australian telecommunication giant Telstra remained unchanged.
In the energy sector, TrustPower lost 0.61% as Vector stocks remained unchanged in the early business on Tuesday.
In the retail sector, Hellaby Holdings added 0.50%, while Hallenstein Glasson and Warehouse remained unchanged. Pumpkin Patch lost 0.70% as the jewellery retailer Michael Hill International remained unchanged.
Among other notable stocks, Fisher & Paykel Appliances slipped 1.11% as Fisher & Paykel Healthcare dropped 1.66%. In the building sector, Steel & Tube fell 2.27% as Nuplex remained unchanged.
New Zealand Oil & Gas dropped 2.02% as New Zealand Refining Company eased 0.15%. New Zealand Exchange Limited fell 0.81%. Ryman Healthcare dipped 0.84% as Rakon remained unchanged. Rubicon dropped 2.04% as PGG Wrightson gave up 1.78%.
Sky Network Television climbed 1.23% as Tourism Holdings dropped 1.87%. Calan Healthcare Properties remained unchanged as Cavalier Corporation lost 1.21%. Port of Tauranga and Skellerup Holdings remained unchanged, while Tower lost 0.88%. Air New Zealand fell 1.84% as Auckland International Airport lost 0.43%. Ebos, BIL International and ING Property Trust remained unchanged as Freightways dropped 1.18%. Sanford slipped 1.08%.
Infratil gave up 0.17%, while Kiwi Income Property Trust remained unchanged. Macquarie Goodman Property lost 0.65% as Mainfreight dropped 0.53%. Goodman Fielder and Property For Industry remained unchanged.
The stock market in Sydney, Australia is trading in the negative territory on Tuesday morning, led by ResMed after the company announced that it is planning to recall 300,000 of its devices used in sleep apnea treatment.
The share price of Bendigo Bank, one of the leading banks, also declined, after the Board rejected a takeover offer from Bank of Queensland for A$ 2.7 billion, stating that the price offered is too low.
The All Ordinaries Index is presently trading at 6,175.30, down 16.90 points, or 0.27%, while the S&P/ASX 200 Index is trading at 6,190.40, down 18.80 points, or 0.30%.
Resmed Inc., the second biggest producer of products for treating sleep disorders such as sleep apnea, has announced that plans to recall 300,000 of its products, on concerns that its products, mostly S8 flow generators, which provide steady oxygen supply to patients with the sleeping disorder, may short circuit. Following the news, the share price of Resmed declined sharply by as much as 13% to A$ 5.14 a share.
One of the leading banks in the country, Bendigo Bank, announced that its Board of Directors had rejected the takeover proposal from Bank of Queensland, which had offered to pay 0.748 shares of Bank of Queensland and A$ 5.50 cash for each share of Bank of Bendigo to the shareholders, stating that the offer was not in the best interests of its shareholders and did not provide sufficient value and certainty to the shareholders.
Following the rejection of the offer, the share price of Bank of Bendigo declined more than 4.5%.
Economic data released in the morning revealed that inflation increased less than expected, damping the prospect of a boost to interest rates next week. Following the economic data, banking stocks, which were trading in the negative territory prior to release of the economic data, rebounded and are trading in the positive territory.
While the share price of Commonwealth Bank rose by 59 cents to A$ 53.72, the share prices of ANZ Bank and National Australia Bank rose by 37 cents each to A$ 31.45 and A$ 44.11 respectively. The share price of Westpac rose by 32 cents to A$ 27.47.
Resource related stocks were also trading in the positive territory with marginal gains. The share price of BHP Billiton, the largest mining company in the world in terms of market value and production, rose by 34 cents to A$ 30.34, while the share price of rival company, Rio Tinto, rose by 54 cents to A$ 84.50.
The stock market in Tokyo, Japan is trading in the negative territory on Tuesday, led by chemical companies such as Sumitomo Chemical Co., on concerns that profit margins might squeeze since the rising material prices outpace the increase in product prices.
Many chemical companies find it difficult to increase their product prices while they have to shell out more for the raw materials.
Exporters also declined on concerns that recent surge in crude oil price in the international markets might dampen the demand in the world's largest economy and biggest overseas market for Japan, the US.
The benchmark Nikkei 225 Index is presently trading at 17,315.19, down 140.18 points, or 0.80%, while the broader TOPIX Index is trading at 1,692.41, down 13.22 points.
The US dollar is presently quoted at 118.40/44 yen, compared to previous closing in the range of 118.32/34 yen in Tokyo on Monday evening.
Chemical companies led the declined on concerns that the price of raw materials have been rising more with little or no increase in the corresponding product prices, resulting in shrinkage of profit margins.
The share price of Sumitomo Chemical, the third biggest producer of ethylene in Japan, declined more than 2.5%. The share price of Mitsui Chemicals, the third largest chemical company in the country, declined by more than 3%.
The price of crude oil for June delivery increased more than 2.5% to US$65.89 a barrel in overnight US market. Following the rise on crude oil prices, the share prices of Oil explorers gained on expectations that higher oil prices will boost their earnings. The share price of Inpex, the biggest oil explorer in the country, advanced more than 2% while the share price of Japan Petroleum Exploration Co. rose about 1.5%.
Exporters declined on concerns that rise in crude oil prices might dampen the demand in the world's largest economy and biggest overseas destination for export of products and services.
The share price of Sony, the world's largest producer of video-game players, declined by 0.5%, while the share price of Toyota Motor Corp. the second largest producer of automobiles in the world, declined by more than 1%. The share price of Honda Motor Co., the second largest carmaker in the country, declined more than 2%.
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