Asian markets down

Mixed US corporate earnings sent Asian stocks lower Tuesday as traders waited for the Federal Reserve's updated outlook on the world's biggest economy.

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Mixed U.S. corporate earnings sent Asian stocks lower Tuesday as traders waited for the Federal Reserve's updated outlook on the world's biggest economy.

Japan's Nikkei 225 index was down 1.1 percent to 9,568.27, with investors unloading blue chip shares ahead of what is expected to be a punishing earnings season. Nintendo Co. Ltd. announced Monday that its annual profit dropped for the second straight year as sales of its gaming devices fell.

Other major Japanese companies reporting this week include Canon Inc., Honda Motor Co., and Komatsu Ltd., the world's second-largest construction machinery maker after Caterpillar Inc. Canon shares were down 1 percent. Honda dropped 1.6 percent and Komatsu fell 1.5 percent.

Toyota Motor Corp. slumped 2.4 percent, a day after announcing its car production in Japan plummeted a staggering 62.7 percent in March due to a parts supply crunch following the earthquake and tsunami on March 11.

Toyota, the world's top-selling automaker last year, said Monday its domestic production in March was the lowest since 1976 when Toyota started keeping production figures.

The magnitude-9 earthquake and tsunami destroyed many factories in northeastern Japan, causing severe parts shortages for Toyota and other automakers.

Elsewhere, South Korea's Kospi was down 0.6 percent to 2,204.51, and Hong Kong's Hang Seng dropped 1.1 percent to 23,865.91. Mainland China's Shanghai Composite Index lost 0.9 percent to 2,937.73. Benchmarks in Taiwan, Singapore, Indonesia and the Philippines were also down.

Traders are looking to the Federal Reserve's two-day meeting that begins Tuesday, watching for any changes to the Fed's outlook on the economy. They also expect to find out if the Fed's $600 billion bond-buying effort will expire as scheduled in June.

Since late last year, the Fed has bought government bonds to keep interest rates low. Fed Chairman Ben Bernanke and his colleagues are expected to signal this week that they will allow the program to expire as scheduled.

“Bernanke is not going to tell us much new,” DBS Bank Ltd. in Singapore said in a research note. “On the growth front, he could soften his tone, but is still likely to reassure markets that the recovery is gaining hold.”

Separately, the Asian Development Bank says world food prices have surged by more than 30 percent in the first two months of 2011 _ a serious setback for a region that has rebounded rapidly from the global economic crisis.

The Manila-based lender says in a report Tuesday that food inflation in many Asian economies has averaged 10 percent early this year and is likely to continue because of the global oil hikes, production shortfalls due to bad weather and export restrictions by several food producing countries.

Weak earnings on Wall Street propelled stocks lower on Monday. The Dow Jones Industrial Average lost 0.2 percent to close at 12,479.88. The Standard & Poor's 500 index lost 0.2 percent to 1,335.25. The Nasdaq composite edged up 0.2 percent to 2,825.88.

Kimberly-Clark, the maker of Kleenex and Huggies, dropped 2.7 percent after missing earnings estimates. The company also lowered its earnings forecast for the full year. Johnson Controls fell 2.8 percent, after saying it expects revenue to drop by $500 million in the third quarter because of the earthquake in Japan.

The U.S. Commerce Department reported that sales of new homes rose more than expected in March to 300,000. That's still less than half of the 700,000-a-year pace that economists consider healthy.

Benchmark crude for June delivery was down $1.05 to $111.23 a barrel in electronic trading on the New York Mercantile Exchange. The contract settled at $112.28 per barrel on the Nymex on Monday.

In currencies, the euro fell to $1.4531 from $1.4585 late Monday. The dollar fell to 81.69 yen from 82.24 yen. - Sapa-AP

Source: http://www.iol.co.za/asian-markets-down-1.1061229

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