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Asian Stocks Drop on China Outlook, Extending Decline

It is time to consider the initial sentiments for the week. As per early trading movements, risk aversion appears to be still swarming the markets. In particular, EUR/USD has dipped further and is now in the 1.3000 region. Next bearish target as per mentioned n the previous EUR/USD forecast is 1.280. Continue to monitor the equities market for more clues.

Asian stocks declined, led by raw-materials companies, as Goldman Sachs Group Inc. cut its growth forecast for China amid concern a cash crunch at banks in the world’s second-largest economy.

BHP Billiton Ltd., the No. 1 mining company, declined 3.1 percent, dragging Australia ’s S&P/ASX 200 Index lower. AMP Ltd. tumbled 9 percent after Australia’s largest life insurer and pension manager said it expects profit will fall as much as 16 percent. Hyundai Merchant Marine Co., a marine transport equipment maker, sank 5.2 percent in Seoul .

The MSCI Asia Pacific Index slid 0.7 percent to 126.80 as of 10:32 a.m. in Tokyo . About two shares fell for every one that advanced. The measure fell 2.3 percent last week amid concern that U.S. stimulus is nearing an end and that interbank lending in China is worsening.

“Volatility is going to be the order of the week for the markets,” Vasu Menon, head of content and research at OCBC Bank Ltd. in Singapore , told Bloomberg TV. “China has had a credit binge for way too long. The government is trying to rebalance the economy, trying to downsize the shadow banking system. All that means credit is going to remain fairly tight.”

Japan ’s Topix index climbed 0.2 percent as the yen fell 0.4 percent to 98.32 per dollar. Australia’s S&P/ASX 200 Index declined 1.5 percent and South Korea ’s Kospi index slid 0.8 percent. New Zealand ’s NZX 50 Index rose 0.1 percent. Hong Kong ’s Hang Seng Index fell 0.9 percent and China’s Shanghai Composite Index dropped 0.5 percent.

Goldman Sachs lowered its estimate for 2013 Chinese gross domestic product to 7.4 percent from 7.8 percent, citing weaker economic indicators and tightening of financial conditions, according to a report today from economist Li Cui.

The MSCI […]

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