Asian markets close mixed; Shanghai plunges

Wed. July 16, 2008; Posted: 06:51 AM

(RTTNews) - The stock markets across the Asia-Pacific region closed mixed on Wednesday amid uncertainty about global growth prospects. Japan and South Korea finished flat, while Taiwan and China closed sharply lower. Australia jumped more than one percent. Oil steadied on Wednesday, after a sharp fall in the previous session on expectations that economic concerns would curtail demand. U.S. crude was 12 cents down at $138.62 a barrel at 5:23 a.m. ET after briefly dropping to $137.22 a barrel.

On the currency front, the dollar weakened to lower 104-yen levels in late Tokyo deals from upper 104-yen levels in early trade and mid 105-yen levels late Tuesday. The South Korean won fell against the greenback. The local unit closed at 1,009.3 a dollar, down from Tuesday's close of 1,008.2 a dollar. The Australian dollar closed weaker for the first time in a week, after the local unit hit a 25-year high above US$0.98 overnight, as the central bank chief hinted that interest rates may have peaked. The Aussie finished the session at US$0.9772-0.9775. The New Zealand dollar climbed above the US$0.77 mark on Wednesday. The kiwi gained despite speculation that the Reserve Bank might cut interest rates as early as next week. The local unit closed at US$0.7715, up from Tuesday's close of US$0.7658.

The Japanese market closed mixed after posting losses for the previous three sessions. The market moved sideways, as a better-than-expected earnings from semiconductor chip giant Intel boosted some of the high-tech stocks, but lower crude prices weighed on oil-related stocks and a stronger yen hurt some exporters. The benchmark Nikkei 225 index closed up 6.24 points or 0.05% at 12,760.80, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange closed down 3.84 points or 0.31% at 1,249.28.

On the economic front, The Ministry of Economy, Trade and Industry said that its tertiary industry index recorded first decline in three months due to lower spending in the information/communications service and real estate sectors. Services sector spending in Japan declined 0.2% in May from its level in April and May 2007.

Meanwhile, Japanese machine tool orders fell a revised 2.5% on year in June to 128.42 billion yen, according to data released by the Japan Machine Tool Builders Association. However, the decline was better than the preliminary estimate of a 2.7% loss in the month. Orders rose 1.4% in May and 0.4% in April.

In the tech sector, Tokyo Electron rose 2.2%, Advantest climbed 1.8%, TDK and NEC added 0.2% each, Canon climbed 1.0% and Sony advanced 0.7%. Mitsubishi Electrical Industrial lost 0.9% and Fujitsu dropped 0.6%.

Among banks, Mizuho Financial Group advanced 1.8%, Mitsubishi UFJ Financial Group edged up 0.1% and Sumitomo Mitsui Financial Group gained 1.9%. Top brokerage Nomura Holdings slipped 0.1%.

In the auto sapce, Toyota Motor and Honda Motor fell 0.9% each and Mitsubishi Motors fell 1.1%, while Nissan Motor gained 0.9% and Suzuki jumped 1.9%.

Oil-related issues closed weaker. Oil and gas miner Inpex Holdings plunged 4.8%, Nippon Oil shed 1.9% and trading firm Mitsubishi Corp fell 2.5%.

Nippon Steel lost 0.9%, Sumitomo Metal Industries shed 3.4% and JFE Holdings declined 0.6%.

The South Korean market closed lower, after a volatile session, extending losses for a third straight session. Concerns about the health of the U.S. financial sector prompted investors to continue selling blue-chip stocks. The benchmark Korea Composite Stock Price Index shed 1.93 points or 0.13% to end the session at 1,507.4 after gaining more than 1% in early trade.

On the economic front, a government report showed that South Korea's major discount outlets reported a drop in sales in June, while department stores continued to post solid growth. The combined sales of the nation's top three discount stores dipped 1.9% on year in June, mainly due to lower than expected temperatures that reduced demand for air conditioners and summer clothing, the Ministry of Knowledge Economy said.

Meanwhile, South Korea's unemployment rate rose to 3.1% last month from 3.0% in May, according to a report by the National Statistical Office.

Financial sector was weak, with top lender Kookmin Bank plunging 9.9% and leading brokerage Samsung Securities shedding 1.3%. Top builder Daewoo Engineering & Construction tumbled 7.6% and Hyundai Heavy Industries fell 0.6%.

However, tech exporters gained, with market heavyweight Samsung Electronics advancing 1.5% and its consumer electronics rival LG Electronics adding 1.4%. Steelmaker POSCO rose 1.0% and refiner SK Energy gained 0.4%.

The Chinese market closed lower, extending losses for a second straight trading session. Property developers and financial stocks continued to slide amid uncertainty over the direction of domestic monetary policy and lingering concerns about the U.S. financial sector. Electricity firms were hit after Huaneng Power and Huadian Power projected net losses for the first half. The benchmark Shanghai Composite Index closed down 73.58 points or 2.65% at 2,705.87.

The market sentiment was also impacted by a state media report that domestic output expanded at a slower pace in the first six months and the head of the United States central bank warned of increased risks to the world's largest economy. The statistics bureau will release CPI and PPI data for June and GDP data on Thursday.

Among property developers, China Vanke fell 4.8%, Poly Real Estate tumbled 5.1%, Beijing-based Financial Street plummeted 6.7% and North Star sank by the daily cap of 10.0%.

In the banking space, Industrial and Commercial Bank of China declined 2.5% and Shanghai Pudong Development Bank plunged 4.7%.

Huaneng Power International fell 3.2%, Huadian Power International plummeted 5.7%, Guangdong Electric Power Development shed 4.9% and GD Power Development tanked 5.4%.

Oil refiners gained following a big retreat in oil prices. China Petroleum & Chemical Corp rose 1.9% and index heavyweight PetroChina edged up 0.1%.

The Hong Kong market closed higher on bargain hunting following a sharp fall in crude oil prices overnight. The Hang Seng Index rose 48.73 points or 0.2% to end the session at 21,223.50.

China's top carrier China South Air surged 6.1%, while smaller rival China Eastern Airlines gained 2.8%. Cathay Pacific, Hong Kong's top carrier, rose 1.7%. Oil refiner China Petroleum and Chemical Corp added 2.0%, but offshore oil producer CNOOC slumped 3.3%.

Fashion retailer Esprit Holdings jumped 4.3% after the company bought back its own shares this week.

The Australian stock market closed higher after two straight sessions of losses. After opening lower and trading sideways in the morning session, the stocks saw some strength in the afternoon session. While banking stocks gained on bargain hunting, miners lost ground on lower commodity prices. The benchmark S&P/ASX200 index closed up 54.9 points or 1.1% at 4,870.6 and the broader All Ordinaries index gained 37.4 points or 0.8% to finish at 4,947.5.

On the economic front, Australia's leading index posted slower growth in May, according to the latest survey by Westpac Bank and the Melbourne Institute. The group's leading index showed an annualized growth rate of 2.1% for the leading index, lower than the 2.6% growth rate posted in April. However, the coincident index, measuring the current state of the economy, rose 0.2% in May. The annualized growth of the coincident index slowed to 3.0% from 3.2% in April.

Reserve Bank of Australia Governor Glenn Stevens said in Sydney that he did not expect the country to face the same sort of economic challenges that now plagued the United States and the U.K. Answering questions after a speech to business economists, Stevens also said that interest rates could come down before inflation came back within the central bank's target band, just as it was often necessary to raise them before inflation climbed above the band.

In the banking sector, Commonwealth Bank of Australia advanced 3.3%, ANZ surged 5.7%, National Australia Bank gained 3.8% and Westpac jumped 4.0%. Takeover target St George rose 3.6% and investment firm Macquarie Group added 0.7%, but Babcock & Brown fell 3.4%.

Energy stocks closed mixed. Woodside Petroleum plunged 3.1% and Oil Search tumbled 3.3%, but Santos added 0.4%. Among gold miners, Newcrest Mining gained 1.4%, while Sino Gold fell 2.7% following Tuesday's 12.3% surged and Lihir Gold dropped 3.1%. Gold closed lower in Sydney.

The big miners closed weaker on lower commodity prices. Index leader BHP Billiton slipped 0.2% and rival Rio Tinto lost 0.5%.

Among retailers, Woolworths gained 3.4% after the company met its full-year profit forecast though record fuel prices and higher borrowing costs slowed fourth-quarter sales growth to 7.5%. Among others in the sector, Wesfarmers surged 4.6%, David Jones soared 5.9% and Harvey Norman added 0.3%.

The New Zealand stock market closed higher, reversing a two-day losing streak. After falling to a new three-year low of 3,001 in early trade, the benchmark NZX 50 index moved into positive territory in the afternoon session as bargain hunting picked up momentum. The key index, which has lost about 16% since the beginning of June, closed up 18.90 points or 0.62% at 3,059.36. The broader NZX All Capital Index rose 7.15 points or 0.23% to finish the session at 3,109.44.

Top stock Telecom jumped 2.1% and second-ranked Contact Energy surged 3.6%, while Fletcher Building slipped 0.2%. TrustPower fell 1.7% and Vector closed unchanged.

New Zealand Oil & Gas plunged 4.5% following a steep fall in oil prices overnight, but The New Zealand Refining Company added 0.3%.

Banking stocks recovered, with ANZ jumping 3.1%, Westpac surging 3.3% and Lion Nathan rising 1.3%.

Sky City, which on Monday confirmed its profit guidance, gained 0.7%, but New Zealand Exchange plummeted 3.6% following light trading volumes of the bear market.

Freight companies fell amid speculation that domestic freight volumes were falling. Mainfreight slipped 0.2% and Freightways lost 1.7%.

Rakon fell 1.9% and Fisher & Paykel Healthcare gave away 1.8% on the back of a stronger New Zealand dollar. However, Fisher & Paykel Appliances rose 1.5%.

Other Asian markets:

Taiwan's Taiex closed down 1.8% at 6,710; Singapore's STI closed up 0.2% at 2,835; Malaysia's KLCI closed down 0.7% at 1,119; Indonesia's Jakarta Composite index closed up 3.3 points at 2,218; and India's Sensex closed down 0.8% at 12,575.

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