Tuesday July 15, 06:06 PM
Asian markets turn lower amid inflation worries - UPDATE
SINGAPORE (Thomson Financial) - (Updates with closing levels throughout)
Asian markets gave up early gains to trade mostly lower on Monday afternoon on renewed concerns about inflation after oil prices rose to a fresh record near
$143 a barrel on Friday.
Oil prices retreated from record levels but were still trading above $141 a barrel in Asian hours on Monday, bolstered by a weak dollar and continuing tension between Israel and Iran over Tehran's nuclear programme.
'The most acute problem now for the global economy and the stock market are oil prices and inflation. The turning point will be the interest rate decision by the European Central Bank this week,' said Kim Se-jung, an analyst at Shinyoung Securities in Seoul.
The South Korean KOSPI index closed lower by 0.6 percent at 1,674.92.
In Australia, the S&P/ASX index shed 0.4 percent at 5,213.1, off a high of 5,305.9.
The index fell 16.9 percent in the year to June 30, its worst financial year since 1982 when the then-benchmark index fell 32.4 percent, according to Oliver.
Analysts said the Australian market is on track to post its worst financial year performance in 26 years and is expected to struggle in the months ahead as investors fret about the impact of record oil prices on company profits and global growth.
'High oil prices are really cramping sentiment in a market that is fear-driven. The likelihood of sustained high prices will have an impact on earnings,' said Savanth Sebastian, equities economist at CommSec.
The Japanese market also reversed early gains, with the Nikkei 225 (news) index down 0.5 percent at 13,472.75.
'Investors appear hesitant to open fresh positions due to mixed cues and while U.S. stocks tumbled, the downside is supported by expectations for the establishment of mutual funds today and firm interest in Japanese stocks by foreign investors,' said Mitsushige Akino, chief fund manger at Ichiyoshi Management in Tokyo.
In Hong Kong, the Hang Seng (news) was down 0.3 percent at 22,102.01.
'Even though end-quarter window-dressing activity may help boost the market on the last trading day of the first half, the local market will inevitably end June on a downbeat note,' said Wilson Wong, analyst at Tai Fook in Hong Kong.
Elsewhere, the Kuala Lumpur Composite Index closed 0.3 percent lower at 1,186.57, while the Philippine Composite Index was off 0.3 percent at 2,459.98.
The Shanghai Composite Index closed 0.45 percent down at 2,736.10, while the Taiwan weighted index eased 0.3 pesingrcent to 7,523.54.
The Singapore Straits Times index was up 0.3 percent at 2,947.54, off a high 2,986.53, while the Jakarta Composite index gained 0.7 percent to close at 2,349.11.
India's benchmark Sensex provisionally closed down 2.87 percent at 13,405.54 points.
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