Asian markets: China stocks fall despite Fed's rosy forecast
China stocks dropped Wednesday for the first time in four days, with the Shanghai Composite Index falling 1.1 percent to close at 2,999.7 -- hovering at the 3,000 mark that many technical analysts view as a key point of resistance for the recovering market.
Brokerages led the slide as the number of newly opened trading accounts in China declined for a sixth consecutive week. Citic Securities Co. dropped 2.3 percent and its rival, Haitong Securities Co., suffered a 2.1 percent loss. China Everbright Securities Co. Ltd., the latest brokerage company to list on the exchange, fell 2.2 percent.
Mining stocks were also on the rise in Australia where Rio Tinto Group saw gains of 2 percent and Newcrest Mining Ltd, the country's largest gold producer, soared 4.5 percent.
In Hong Kong, the Hang Seng rose 2.6 percent to close at 21,404. Data from the U.S. indicating that retail sales were up 1.1 percent, coupled with Ben Bernanke's announcement that the U.S. recession is "very likely over," buoyed investor sentiment. This sent shares of Li & Fung, Wal-Mart's and Target's biggest supplier of clothing and toys, up 3.1 percent. Foxconn International Holdings Ltd., which makes electronic computer components for popular consumer products including the iPod, iPhone, Wii and Amazon Kindle, rose 1 percent.
In Japan, the Nikkei ended the day at 10,270, up 0.5 percent. Sony Corp., with 23 percent of its sales coming from the U.S., benefited from the Federal Reserve's rosy economic forecast, with its shares rising 2.3 percent. Canon, Inc., the world's largest maker of office equipment, soared 4.3 percent. Most shares in Tokyo fell, however, on fears that new premier Yukio Hatoyama's policies, which include cash handouts for families with school-aged children and raising the minimum wage, will slow the nation's recovery and could send the Nikkei spiraling back to 8,000. Mitsubishi UFJ Financial Group Inc. dropped 1.7 percent and Mizuho Financial Group Inc. lost 1.5 percent.
Hopefully, Hatoyama's fiscal policies won't backfire and the Japanese will not have to endure another lost decade.