Asian markets close mixed; Nikkei sheds 1.3%

(RTTNews) - The stock markets across the Asia-Pacific region closed mixed on Wednesday after U.S. stocks finished flat overnight amid a new push by the Federal Reserve to reopen credit markets and lower borrowing costs, and more disappointing economic news. Investors in Asia bought resources stocks after Australia's BHP Billiton abandoned its hostile takeover bid for rival Rio Tinto, but sentiment was dented after Toyota Motor lost its AAA credit rating. Crude oil prices were steady in Asian trading Wednesday, after the contract for January delivery plunged nearly 7% on Tuesday, ahead of the weekly U.S. inventory report. In currency trading, the U.S. dollar fell against the yen in the wake of the Fed's new efforts to fix the battered economy.

On Tuesday, the Dow and S&P 500 advanced on optimism that a new Federal Reserve rescue package could revive the housing market and consumer lending, while the Nasdaq fell as technology stocks slid after Cisco Systems said that it will close most of its operations in the United States and Canada for five days to cut costs. While the Nasdaq closed down 7.3 points or 0.5% at 1,464.7, the Dow closed up 36.1 points or 0.4% at 8,479.5 and the S&P 500 rose 5.6 points or 0.7% to 857.4.

At 2:53 a.m. ET, oil was quoted at $50.78 a barrel, up 1 cent. The contract for January delivery finished Tuesday's New York session at $50.77 a barrel, down $3.73.

The U.S. dollar traded in the upper 94-yen levels in late Tokyo deals, down from Tuesday's close in the mid 96-yen range. The South Korean won strengthened to finish the domestic session at 1,478.1 a dollar, but China's yuan weakened to 6.8282 a U.S. dollar in over-the-counter trading from Tuesday's close of 6.8220. The Australian dollar closed marginally higher at US$0.6462-0.6465 and the kiwi ended stronger at US$0.5475.

The Japanese stock market closed lower, ending a two-day winning streak, despite the U.S. government announcing its latest aid package to stimulate the economy as a worse-than-expected U.S. gross domestic product reading stoked further fears about recession. Additionally, a stronger yen weighed down exporters. The benchmark 225-issue Nikkei Stock Average closed down 110.71 points or 1.3% at 8,213.2 and the broader Topix index of all First Section issues on the Tokyo Stock Exchange shed 14.4 points or 1.7% to 817.2. While securities, auto and precision machinery stocks pulled the market down, insurers and warehouse stocks posted gains. On the economic front, investors had little reports to digest on Wednesday.

Banks and brokerages closed weaker. Mitsubishi UFJ Financial Group shed 1.6% and Mizuho Financial Group plunged 3%. Top brokerage Nomura Holdings plummeted 6.2% and Daiwa Securities Group slid 4.9%.

Automakers and tech exporters also performed poorly. Toyota Motor sank 4.6% Fitch Ratings announced that it downgraded Toyota Motor long-term foreign and local currency Issuer Default ratings or IDRs and senior unsecured debt ratings to 'AA' from 'AAA' and removed them from Rating Watch Negative. Among other exporters, Kyocera dropped 2.0%, Honda Motor declined 1.9%, Komatsu lost 2.7%, Sony tumbled 3.1%, and Canon gave away 2.9%. Advantest rose 0.9% after falling nearly 1% at opening.

Other notable decliners were Sanyo Electric and Panasonic, after media reports said that Goldman Sachs Group told Sanyo Electric that it will not hold further negotiations with Panasonic over the possible sale of shares it holds in Sanyo as Panasonic's offer price is too low for Goldman. Sanyo Electric fell 3.9% and Panasonic lost 3.6%.

Among commodity-related stocks, oil and gas miner Inpex Holdings edged up 0.2%, but Nippon Mining Holdings gave away 0.4%. Mitsubishi Corp slid 1.9% and Mitsui & Co shed 3.9%.

Among gainers, Sompo Japan Insurance soared 7.1% and Mitsui Sumitomo Insurance Group Holdings jumped 5.2%. Mitsubishi Logistics gained 2.3%.

The South Korean stock market surged 4.7% on bargain hunting in the financial sector as the U.S. Federal Reserve's latest rescue plan to shore up the U.S. economy boosted investor sentiment. The benchmark Korea Composite Stock Price Index or KOSPI climbed 46.5 points to close at 1,029.8, extending Tuesday's gains.

On the economic front, the value of land, buildings, equipment and other tangible assets in South Korea jumped two-fold over the last seven years mainly due to increased real estate prices, according to a government report. The National Statistical Office said that the country's total assets were worth 6,543 trillion won as of 2007, up from 3,390 trillion won in 2000 and 6,021 trillion won a year earlier.

Financial shares, led by bank and securities issues, rose on the back of Fed's latest bailout plan. Comments from the country's top financial regulator that this is not the time for the government to pour public funds into local banks, as the difficulties they face do not warrant an overhaul, also contributed to the positive sentiment.

Woori Finance Holdings jumped by the daily limit of 15% and KB Financial Group, the holding company of Kookmin Bank, soared 15%. Leading brokerage Daewoo Securities surged 14.9%.

Top steelmaker POSCO jumped 3.8% and Hyundai Steel rallied 6.1%, helped by news that BHP Billion has called off its bid for rival Rio Tinto, allaying worries about the potential formation of a iron ore pricing cartel.

However, Hyundai Merchant Marine lost 1.3% after North Korea said Monday that it would suspend a cross-boarder train service and selectively expel South Koreans working at a joint industrial complex in the city of Kaesong starting next week. Hyundai Merchant has a 36.9% stake in Hyundai Asan, an arm of Hyundai Group, which engages in inter-Korean economic projects.

In the tech sector, LG Electronics dipped 0.4% after Citigroup issued a warning on its profit.

The Chinese stock market closed higher for the first time in five sessions, led by transportation and steel stocks, after the government announced road-building plans under a stimulus package. The benchmark Shanghai Composite Index closed up 9.2 points or 0.5% to close at 1,897.9.

Stocks in toll road operators and steel makers rose after the Ministry of Transport said it would spend 1 trillion yuan on building highways and rural roads as part of the stimulus. Guangxi Wuzhou Communications jumped by the daily limit of 10.0% and Jiangxi Ganyue Expressway advanced 2.9%.

Steel stocks rose after iron ore supplier BHP Billiton dropped its bid for rival Rio Tinto Group. Baoshan Iron & Steel surged 3.9% and Anshan Iron and Steel Group soared 6.0%.

Real estate stocks also posted gains. China Vanke climbed 3.7% and rival Poly Real Estate Group rose 2.6%. Market heavy weight PetroChina edged up 0.5% and oil refiner Sinopec gained 1.8%.

The Hong Kong stock market closed sharply higher, with the benchmark Hang Seng Index gaining 490.9 points or 3.8% to close at 13,369.5. The Hang Seng China Enterprise Index, which tracks the overall performance of 43 Chinese mainland state-owned enterprises on the Hong Kong Stock Exchange, jumped 266.9 points or 4.0% to 6,924.9.

Market heavyweight HSBC Holdings soared 5.9% and China Mobile climbed 3.1%. Offshore oil producer CNOOC rose 4.4%, Sinopec surged 6.9%, and PetroChina advanced 3.8%.

In the banking sector, China Construction Bank gained 4.3%, Industrial & Commercial Bank of rose 2.7%, Bank of China climbed 3.1%, Bank of Communications jumped 4.2% and China Merchants Bank added 1.0%.

The Australian stock market closed sharply lower, giving away a part of the gains that it posted Tuesday, as BHP Billiton scrapped its hostile bid for mining rival Rio Tinto. Investors locked in profits after the market rose for the three previous sessions and Wall Street ended mixed overnight. The benchmark S&P/ASX 200 index fell 83.4 points or 2.3% to 3,540.0 and the broader All Ordinaries index closed down 95.8 points or 2.7% at 3,479.6.

On the economic front, the Australian Bureau of Statistics' data on construction work done showed that the value of new building construction in Australia declined 0.5% in the third quarter of 2008. Building construction for the quarter was valued at A$17.87 billion, an increase of 0.8% over the year-ago quarter.

Meanwhile, the Department of Employment and Workplace Relations' skilled vacancies survey for November showed that skilled job vacancies in Australia decreased 4.8% from October. The index of skilled worker vacancies stood at 71.5 compared to 78.4 in September.

Rio Tinto crashed 34.3%, but BHP Billiton closed up 3.9% after surging nearly 9.0% in early deals. Investors welcomed BHP's move to walk away from the deal in the face of deteriorating economic conditions, falling commodity prices and Rio's debt burden.

Financial serctor closed weaker as the major banks lost between 1.5% and 6.9%. ANZ shed 3.4%, Commonwealth Bank fell 3.9%, NAB lost 1.5% and Westpac plunged 6.9%. Investment bank Macquarie Group declined 2.0%. Insurers closed mixed. AXA plummeted 6.5% and Insurance Australia Group gave away 3.1%, while QBE closed unchanged and AMP added 0.2%.

Telstra rose by 1.5% after the company lodged an incomplete bid for the federal Government's A$10 billion-plus national broadband network.

In the retail sector, David Jones shed 2.0% after the upmarket department store operator said that it was prepared for a retail recession. Wesfarmers tumbled 3.3%, but Woolworths advanced 0.4%.

Among gold miners, Newcrest Mining fell 1.8% and Lihir Gold slipped 0.5%. In the energy sector, Woodside Petroleum sank 4.8%, Santos dropped 3.9% and Oil slumped 5.7% after oil prices fell overnight in U.S. trading.

The New Zealand stock market closed a tad higher, extending its gains for the second day in a row. After opening on a weak note, tracking a mixed lead from Wall Street, the benchmark NZX 50 index traded in negative territory for the most part of the session, before staging a late recovery to finish in positive terrain. The key index closed up 3.0 points or 0.1% at 2,637.9 and the broader NZX All Capital index climbed 1.3 points or 0.05% to 2,680.4.

On the economic front, investors had little reports to digest on Wednesday. Meanwhile, Finance Minister Bill English said that the Government's December stimulus package would inject about NZ$7 billion into the economy over two years.

Resins and chemicals company Nuplex plunged 11.0%, extending Tuesday's sharp losses, after the company predicted earnings before interest, tax, depreciation and amortization to fall this year to NZ$110 million from NZ$121.8 million.

Sanford shed 0.9% even though the company posted strong annual profit, but failed to provide future guidance.

Air New Zealand dropped 2.3% amid criticism of a U.K. levy on long haul flights.

Among market leaders, Fletcher Building lost 1.9% following the announcement of a withdrawal from an acquisition deal in Australia. Contact Energy rose 1.8% and Telecom jumped 3.5%.

Mainfreight gained 1.7% on a day when chairman Bruce Plested received a Beacon award and praise from the New Zealand Shareholders' Association. Westpac rose 1.8% and Trustpower edged up 0.1%.

Major losers included Freightways 3.6%, Tower 3.3%, Lion Nathan 5.0%, New Zealand Oil and Gas 3.0%, SkyCity 1.6%, and NZX 0.9%.

Other Asian markets:

Taiwan's Taiex closed up 0.1% at 4,271; Singapore's STI closed up 3.5% at 1,711; Indonesia's Jakarta Composite Index closed up 3.4% at 1,193; Malaysia's KLCI closed down 3.8 points at 856; and India's Sensex was up 3.5% at 9,003 at 4:54 a.m. ET.

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