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Asian equities extend declining momentum on Wednesday

14 Dec 2011 Evaluate

Asian markets extended the declining momentum in Wednesday trades as investors continued to lack conviction to take larger bets amid absolutely no significant upside trigger to take the markets higher. Sentiments in the region was pessimistic following the overnight Wall Street which suffered huge losses after the US Fed policymakers left interest rates unchanged, reiterating its pledge to keep rates at low levels through the middle of 2013 and also made no change to its policy of selling short term holdings and reinvesting them into longer term securities. Investors also took to risk aversion on reports that German Chancellor Angela Merkel rejected the idea of raising the upper limit of the European Stability Mechanism (ESM), which is currently at 500 billion euro.

Though all the indices in Asia traded in the negative territory, the losses across the indices were less pronounced. The Japanese benchmark remained the top laggard in the space with cuts of around half a percent followed by the index in South Korea that shunned less than half a percentage points. Rest of the market in the region too trade on a dull note amid persistent uncertainty in Europe and the Fed not indicating any new measures to boost the world’s largest economy.

Shanghai Composite eased 2.80 points or 0.12% to 2,245.79, Hang Seng shed 13.51 points or 0.07% to 18,433.66, Jakarta Composite declined 10.44 points or 0.28% to 3,753.14, Nikkei 225 slipped 47.55 points or 0.56% to 8,505.26, Straits Times fell 5.22 points or 0.19% to 2,680.52, Seoul Composite dropped 7.24 points or 0.39% to 1,856.82 and Taiwan Weighted inched down 2.22 points or 0.03% to 6,894.09.

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