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ASIAN MARKET UPDATE

31 May 2010 by BondSquawk 0 Comments

By Rom Badilla, CFA – Bondsquawk.com

U.S. and U.K. Markets are closed today due to the holiday.

Overnight markets were generally mixed. Nikkei finished up by 0.1 percent to 9768.70. Hong Kong’s Heng Seng Index was flat to 19765.19 while the ASX index in the land down under lost 0.6 percent to 4429.70.

Japan’s 10-Year note was unchanged for the most part and closed at a yield of 1.26 percent. The Yen is now at 91.26 from91.22 set on Friday versus the US Dollar.

China announced a state originated reform plan aimed at the country’s property tax regime. According to The Financial Times article, the “cryptic reference” is a sign that China “may further clamp down on the country’s booming real estate market, possibly by introducing an annual tax based on the value of housing.”

China’s Shanghai Composite Index declined 2.4 percent on Monday to 2592.15. As the country faces pressures of an overheating economy and a meltdown in real estate prices coupled with the European debt crisis, the Chinese stock market has fallen into bear territory for the year. The Shanghai Composite has declined 21.4 percent in 2010 after remarkable run last year of 109 percent from the lows set in October 2008 to August 2009.

Shanghai Composite Index Historical Chart

The Chinese markets led the bounce in the global markets after tumbling in 2008, almost 5 months ahead of the lows set in March 2009 in the Western economies. With the S&P 500 down 10.7 percent from recent highs set in late April, it appears that China is leading us back on the way down as well.

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BondSquawk

BondSquawk is written by a team of bond market experts whose aim is to provide an unbiased view of one of the largest (but under reported asset classes in the world) – The world of bonds.

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