Tuesday, 11 March 2008

Investors ignore positive Japanese data, Malaysian stocks dive

Amid a generally negative day for markets, the data on the real economy in Japan were quite positive. Reuters reports:

Core private-sector machinery orders, a highly volatile series seen as an indicator of capital spending in the coming six to nine months, jumped 19.6 percent in January, almost seven times as much as expected...

In another positive sign, however, a government survey showed on Monday that sentiment among service sector workers, called "economy watchers" for their proximity to consumer and retail trends, improved for the first time in 11 months in February.

The improvement was partly due to firm demand for home-grown fresh food, reflecting public concern about the safety of imported food, the survey showed...

BOJ data showed on Monday that the balance of outstanding loans held by most Japanese banks rose 0.8 percent in February from a year earlier, the highest annual increase since last May.

But Japan's stock market did not benefit from the positive data, the Nikkei 225 falling 2 percent to close at its lowest level in 2½ years.

The big fall in stock markets yesterday, however, took place in Malaysia. From Bloomberg:

Malaysian stocks fell the most in a decade after the ruling coalition's worst election result in fifty years raised doubt over Prime Minister Abdullah Ahmad Badawi and his public spending program.

The Kuala Lumpur Composite Index tumbled 9.5 percent as opposition parties took control of almost half the states contested in March 8 elections. The ringgit posted its biggest drop since June and bonds slumped the most in four months. The risk of Malaysia's government defaulting on debt rose to a record.

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