= Asian Shares End Lower; Hana Financial Takes Hit In Korea

SINGAPORE, Oct 05, 2009 (Dow Jones Commodities News Select via Comtex) -- HNFGF | Quote | Chart | News | PowerRating -- Asian markets ended mostly lower in volatile trading Monday, with South Korean stocks suffering a steep decline as trading resumed after a holiday and as Hana Financial Group plunged on a report it may raise capital.

Japanese stocks fell as sentiment was hurt by Friday's weak U.S. jobs report, offsetting a surge in Fast Retailing shares after the company reported strong September sales.

South Korea's Kospi dropped 2.3% to 1606.90 and Japan's Nikkei 225 Average declined 0.6% to 9674.49, with both benchmarks falling for a third straight session. In Hong Kong, the Hang Seng Index rose 0.3% to 20429.07 after Friday's sharp loss.

"The theme of the market is that the stimulus money has run out. Fundamental analysts are looking to the U.S. round of earnings to confirm that spending has slowed down, and the funds are now exhausted," said Ben Collett, head of cash equities at TFS Derivatives. "I don't hear a lot of people talking about a collapse although I hear a lot of them talking about markets coming off. That itself is enough to encourage choppy trading like this."

Taiwan's Taiex rose 0.4%, New Zealand's NZX 50 slipped 0.3% and the Philippines' PSE Composite ended flat. India's Sensex fell 1.6% and Singapore's Straits Times Index lost 0.8%.

Australia's S&P/ASX 200 slipped 0.6% to take losses into a fourth successive session, a day before the central bank decides on interest rates. Although most economists expect the Reserve Bank of Australia to stand pat on its key policy rate Tuesday, some were factoring in a rate increase later this year.

"Investors in global equity markets will likely spend some time adjusting expectations for the economic recovery," said Oh Tae-dong at Taurus Investment & Securities in Seoul. "But as long as policy makers refrain from a premature exit from their stimulus programs, the uptrend for global stock markets will likely continue."

The Dow Jones Industrial Average futures contract was up 38 points in screen trade recently.

Investor sentiment in Asia was weakened by data Friday showing U.S. employers cut a larger-than-expected 263,000 jobs in September, while the unemployment rate rose to 9.8%, matching economists' forecasts, from 9.7% in August.

In Japan, Fast Retailing shares climbed 14.9% after the company said late Friday that September same-store sales at its Uniqlo casual clothing chain soared 31.6% from the year-earlier period.

Morgan Stanley lifted the stock's rating to "overweight" from "equal-weight," saying: "We take this as proof that last year's strength was not a one-off, but rather that the firm's constant efforts to brush up its merchandise and highly sensitive marketing approach are enabling it to appeal continually to consumers with new value."

Consumer-finance stocks were also supporting the market after skidding recently. Aiful rose 8.2% and Takefuji jumped 12.8%.

But exporters extended their decline on the yen's strength, as the currency continued to hover around the 90 yen to the dollar level. Shares of Sony fell 2% and Honda Motor lost 2.8%, while Toshiba shed 1.8%.

Shares in Seoul were sharply lower as investors priced in the sharp weakness in global markets Friday, when the South Korean market was shut for a holiday. Financial and technology stocks were lower, with Shinhan Financial down 3.8% and Samsung Electronics tumbling 5.7%. Hyundai Motor rose 0.5% after reporting a 27% year-to-year rise in its American sales for September.

Hana Financial Group tumbled 14.4% on a Yonhap report that the firm was considering a rights offering to pursue mergers and acquisitions. A spokesman for Hana Financial said that a decision on the rights offering had not been made.

In Mumbai, shares of diversified Grasim Industries sank 7.1% after the company's board Saturday approved a spin off of its cement business to a subsidiary in the first step toward a proposed integration with group cement major UltraTech Cement.

Shares of UltraTech, whose board will meet Tuesday to approve the merger, fell 5.2%, but an analyst said the stock, which currently trades at a discount to peers, would benefit from a merger.

"Given that going forward it would become India's largest cement company with a pan-India presence, we believe it should trade at par with peers," J.P. Morgan analysts led by Pinakin Parekh wrote in a note.

In foreign exchange markets, the U.S. dollar was buying 89.92 yen from 89.75 yen in late New York trade on Friday. The euro was at $1.4624 from $1.4572, and at 131.52 yen from 130.79 yen.

The Australian dollar was firmer against the greenback, boosted by data showing that the total number of job advertisements in Australian newspapers and on the internet rose 4.4% in sequentially-adjusted terms in September compared with August. The Aussie dollar was recently buying $0.8748 from around $0.8664 before the data.

Japanese government bonds declined with the 10-year yield rising 1.0 basis point to 1.26% as of 0600 GMT. Lead December JGB futures closed the day 0.11 lower at 139.50 after sinking to an intraday low of 139.44 early in the morning.

Spot gold was up $2.30 at $1,004.60 per troy ounce recently. Gold prices were likely to breach $1,100 per ounce in 2010, according to Deutsche Bank. "We expect U.S. dollar weakness, higher inflation, central bank buying and a more rigorous enforcement in position limits in energy and agricultural markets will sustain the appeal of precious metals."

Nymex crude oil was recently 44 cents lower at $69.51 per barrel.

-Dow Jones Newswires; +65-6415-4140; markettalk@dowjones.com

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(END) Dow Jones Newswires

10-05-09 0647ET

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