Asian markets mixed amid financial worries
HONG KONG - Asian markets were largely mixed Thursday as worries over the U.S. financial sector and the global economy eclipsed an overnight drop in oil prices and led many investors to lock in gains from the prior day's rally.
The benchmark Nikkei 225 Stock Average shed 0.98 per cent to 13,124.99 after staging a 2.6 per cent advance Wednesday.
South Korea's Kospi retreated 0.9 per cent after the country's central bank surprised the market with a quarter-point rate hike - its first increase in a year - to cope with spiraling inflation. Stock benchmarks in Singapore, Taiwan and Malaysia were off as well.
The declines came despite another winning day on Wall Street as U.S. investors cheered easing oil prices and a better-than-expected profit report from technology bellwether Cisco Systems Inc.
Asian investment sentiment sagged, however, on anxiety over financials and poor results from major regional airlines.
After the bell in New York on Wednesday, American International Group Inc., the world's largest insurer, reported a US$5.36 billion loss in the latest quarter and a massive write down. Investors also were jittery after Japan's largest bank Mitsubishi UFJ Financial Group. announced a 66 per cent slump in fiscal first-quarter profit.
Meanwhile, Japan Airlines Corp. and Hong Kong's Cathay Pacific Airways reported huge losses.
"We had a great day yesterday, so I think there was some cashing out," said Benjamin Collett, head of hedge fund sales trading Daiwa Securities SMBC Co in Hong Kong. "We're really at a point where volume is pretty light and conviction is low."
Benchmarks in Australia, China, India and Thailand resisted the negative sentiment to post gains.
Hong Kong's market, which was closed Wednesday because of a typhoon warning, had its first chance to react to Wall Street's rally on Tuesday, and investors pushed the blue-chip Hang Seng Index 0.7 per cent higher to 22,104.2.
Among Japanese financials, Mitsubishi UFJ plunged 4 per cent, Mizuho Financial Group, Inc. lost 3.5 per cent and Shinsei Bank shed 6.7 per cent.
Adding to the gloom in Tokyo was speculation that a monthly government report due out later Thursday would say the country's economic recovery had ended. Also, core machinery orders - a key barometer of corporate capital spending - fell for the first time in three months in June, according to Cabinet Office figures released in the morning.
Major air conditioner maker Daikin Industries, Ltd. succumbed to market disappointment over a 28.6 per cent fall in first-quarter net profit. The issue plunged 11.09 per cent.
Toyota Motor Corp. was off 1.29 per cent ahead of its first-quarter earnings, which were released after the market closed. The automaker said its first-quarter profit fell 28 per cent on slipping North American sales, a strong yen and rising material costs.
Asian airlines were hard hit after Cathay Pacific reported its first half-year loss - about HK$663 million (US$85 million) - in five years amid soaring jet fuel costs.
In Hong Kong trade, its shares lost 3.9 per cent, while China Southern and Air China were down about 7 per cent each. China Eastern Airlines sagged 3.8 per cent on the mainland.
Chinese stocks were moderately higher as gains in properties and oil refiners helped to offset losses in airlines and heavyweight financial shares. The benchmark Shanghai Composite Index rose 0.3 per cent, or 8.21 points, to 2,727.58.
Share prices were mostly lower in the morning but rebounded as investors snapped up bargains later in the day, perhaps counting on gains ahead of Friday's opening of the Beijing Olympics, analysts said.
"Frankly, the market cannot be predicted," said Zhang Linchang, a strategist at Guotai Junan Securities in Shanghai. "I think it's higher due to investors' expectations for a big jump on the Olympics' opening day."
Heavyweight property shares rebounded after losing ground on bearish forecasts for real estate prices earlier in the week. China Vanke rose 1.4 per cent; Poly Real Estate Group climbed 0.6 per cent.
Refiners, helped by easing global crude oil prices, also advanced. PetroChina added 0.5 per cent while China Petroleum & Chemical Corp., or Sinopec, jumped 2.6 per cent.
In South Korea, Samsung Electronics Co., was down 1.5 per cent.
By evening in Singapore, light, sweet crude for September delivery was trading near US$120 a barrel in the electronic session on the New York Mercantile Exchange. The contract dropped 59 cents overnight to settle at US$118.58 a barrel.
In currencies, the dollar held steady at 109.45 yen Thursday afternoon. The euro rose to US$1.5464 compared with US$1.5425 late Wednesday.
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