More losses for Asian stocks

Losses continued across Asian markets after the US debt rating was revised down by S&P over the weekend. The MSCI Asia Pacific Index slid 3.3% in early afternoon Tokyo trading. S&P 500 Index futures lost 2.5%, following a two-week rout that dragged the gauge down 11% and erased its 2011 gain. Oil sank 3.6% in New York, while gold topped $1,700 an ounce, setting a new record. About 45 shares fell for each one that increased on MSCI’s Asia Pacific Index, which declined 7.8% last week, the steepest loss since October 2008.

The MSCI All-Country World Index fell 0.6% today, following an eight-day, 11% slump. Japan’s Nikkei 225 Stock Average decreased 2.1%, adding to last week’s 5.4% slump, the worst since the aftermath of the March 11 earthquake. Australia’s S&P/ASX 200 Index slid 2.9% at its close, South Korea’s Kospi Index dropped 5.1% and Hong Kong’s Hang Seng Index tumbled 4%.

Fears of contagion are obvious on local markets. The cost of insuring Asia Pacific corporate and sovereign debt from default surged to the highest in more than a year, according to one of several measures. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan firmed three basis points to 136 basis points. The benchmark is headed for its highest close since July 7, 2010.

In Australia, listed entertainment retailer JB Hi-Fi said net profit for the 12 months to June 30, 2011, came in at $109.70 million, down from $118.65 million for the prior corresponding period. Revenue rose 8.35 per cent to $2.96 billion.The consumer electronics retailer said the market was expected to remain challenging in the period ahead. Shares in JB Hi-Fi finished 2.4% lower.

In currency markets, the Dollar Index dropped 0.3% today, as the US currency retreated 0.5% to 78.01 Yen and fell 0.2% to $1.4314 against the Euro. G-7 members will inject liquidity as needed and act against disorderly currency moves if necessary, Japanese Finance Minister Yoshihiko Noda said.China’s Yuan rose 0.22% to 6.4263 per dollar in Shanghai, strengthening the most since April and touching a record high. Other higher-yielding currencies weakened, with the New Zealand dollar sliding 1.9% to 82.82 U.S. cents, the Australian dollar depreciating 1.2% to $1.0317 and the South Korean won dropped 1.1% to 1,078.73 per dollar.

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