(CNN) – For the first time in three years, India has cut interest rates in the face of flagging economic growth. In the year that ended on March 31, Asia’s third largest economy grew 6.9% – its slowest in three years.
India announced it would cut interest rates by 50 basis points. A 25-point cut had been widely predicted. This takes the subcontinent’s lending rate down from 8.5% to 8%. The hope is that lower interest rates will lower prices and allow more money into India’s economy – thereby encouraging growth.
Right now, signs of sluggishness are easy to spot.
Hong Kong, China (CNN) – Most Asia-Pacific markets ended Friday moderately higher, rounding out a week of wild volatility. Better-than-expected data out of the U.S. – including lower jobless claims numbers and good earnings from tech bellwether Cisco – helped boost investor confidence.
In Japan, the Nikkei 225 closed down 0.20%, failing to stay above the psychological 9,000-point mark after briefly touching it in morning trade. At 430 pm Hong Kong time, the yen was trading at 76.71 to the dollar, once again nearing its post-war high. That strength impacted exporters. Auto manufacturers Nissan and Honda were down, 2.26% and 1.25% respectively. Electronics maker Sony closed down 2.04%.
In Greater China, the Hang Seng closed up 0.13%, paring earlier gains. That was not enough to break a longer downward trend. Today marks a third week of overall losses for the index. Li & Fung soared today after beating first-half net income forecasts by about $30 million. The company supplies clothes and other consumer goods to Wal-Mart after inking a major deal in January 2010. The Shanghai Composite closed 0.45% higher, following the region’s climb on those good U.S. numbers, as well as on continued speculation the People’s Bank of China will avoid raising interest rates in its fight against inflation, which currently stands at 6.5%.
Hong Kong, China (CNN) – Oh my! In the past 24 hours, three of Asia’s dragon economies have traded in their scales and roars for shaggy fur and whimpers. That’s thanks to the shock from S&P’s unprecedented downgrade of the U.S. debt rating last Friday.
China, Hong Kong and South Korea are now officially bear market economies. They’ve lost at least 20% of their value from their previous peaks.
Today, Hong Kong’s Hang Seng crossed into bear territory after falling 22% from its November 2010 high. China’s Shanghai Composite has fallen 20% from early April. South Korea’s KOSPI Composite has tanked 20% from its recent high in May.
Hong Kong, China (CNN) – “You can’t pick your day.” That’s what Samsonite CEO Tim Parker told me in our Thursday live interview on World Business Today. Earlier that morning, the luggage maker had debuted with fanfare and champagne on the Hong Kong stock exchange. But the fizz had faded within the first hour of trade – share price had already tanked by nearly 11%. By the time Parker and I had our face-to-face, the Hang Seng had closed and Samsonite stock was still underwater – more than 7.5% off its initial IPO price of HK$14.50. Still, the CEO seemed upbeat.
“I wouldn’t say it’s stumbling. The market stumbled, we just stumbled a little less than the markets so to end up where we have done, to be honest, I feel is not a bad result considering very, very turbulent conditions.”
To be sure, those conditions are many. On Monday, Standard & Poor’s downgraded Greece’s credit rating to the worst in the world. On Tuesday, Asia’s first and third largest economies announced higher May inflation numbers – China’s 5.5% was its highest rate since July 2008. India’s May inflation sped in higher than expected at 9.06%. On Wednesday, the Dow Jones Industrial Average had plunged by 200 points in intraday trading, posting losses for six weeks in a row.
(CNN) – How much money do you make in an hour? If you’re not rich, you probably think it’s too little. And thousands of people around the world likely feel the same as you. Here in Asia yesterday - International Labor Day - financially-frustrated protesters hit the streets of Hong Kong, Seoul, Manila, Jakarta and many other capital cities. Their demands: higher pay and stronger worker protection. Their criticisms: soaring food, fuel and property prices and an ever-widening income gap between the rich and poor. And pressure from the people is starting to squeeze gains out of governments.
On May 1 for example, Hong Kong finally premiered a minimum wage for the masses: HK$28 (US$3.60) per hour. The battle for this relative financial security was hard fought. Since the idea was first floated in 1999, the territory’s business leaders have lobbied against the idea. They claim the forced minimum would cause job losses because companies might scale back their employee numbers. Unions say the new minimum is a step in the right direction but that US$3.60 is still not high enough for low-income families. Union leaders had been asking for HK$33, or about US$4.20.
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.