Interest rates in focus in Asia-Pacific region

| May 3, 2011 | 0 Comments
Interest rates in focus in Asia-Pacific region

With Tokyo markets closed for a holiday, most equities markets in the Asia-Pacific region were lower after India raised interest rates by more than had been expected.

The Reserve Bank of India raised the repurchase rate from 6.75 percent to 7.25 percent and the reverse repurchase rate went up from 5.75 percent to 6.25 percent, while the Bank also asked Indian banks to keep more cash in reserve, all of which sent India’s Sensex down 2.44 percent to 18,534.7.

Elsewhere in the region, Australia’s markets were lower as miners and oil companies saw declines and after Australia’s central bank held interest rates steady, with the S&P/ASX down 0.84 percent to 4,784.6 while the Sydney Ordinaries dropped 0.85 percent to 4,854.7, while the Hang Seng was 0.37 percent lower to 23,633.2 in Hong Kong, the Taiex fell 0.69 percent to 8,946.08, the Straits Times Index was down 0.83 percent to 3,153.57 in Singapore, and South Korea’s Kospi dropped 1.2 percent to 2,200,73.

The Shanghai Composite, however, added 0.71 percent to 2,932.19 after a report that manufacturing growth slowed down in China last month, raising hopes that the People’s Bank of China could choose to delay more interest rate increases.

Most markets in Europe were also lower, although London’s markets saw gains after a four-day weekend, with the FTSE 100 up 0.21 percent to 6,082.88 and the FTSE 250 added 0.01 percent to 12,014.8, with the real estate and house building sectors higher, while the travel and leisure sector was mixed and most miners sand the energy sector were lower.

The FTSE Eurofirst 300 was down 0.65 percent to 1,149.52, while the CAC-40 fell 0.29 percent to 4,096.84, the Dax was 0.36 percent lower to 7,500.7 and the IBEX dropped 0.48 percent to 10,825.6 with chipmakers the biggest gainers on both the Dax and the CAC-40.

Wall Street was mixed in midday trade as the Dow Jones Industrial Average managed to add 0.09 percent to 12,818.4 but the S&P 500 was down 0.28 percent to 1,357.4 and the Nasdaq Composite was 0.81 percent lower to 2,840.85.

Crude oil prices and precious metals prices were lower at midday in New York, with silver down by $2.73 per troy ounce after CME Group (NAS: CME) raised both initial margin requirements and maintenance margin requirements on the metal.

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