Asian stocks mixed as US woes temper bargain buying
HONG KONG—Asian shares were mixed on Thursday following another weak display on Wall Street and a tepid report on the US economy from the Federal Reserve.
A small upward revision for Japan’s growth in the January-March period eased concerns on the Nikkei slightly, while a late buying spree and a lull in the yen’s strength lifted the market at the end of the day.
Tokyo ended 0.19 percent higher, adding 17.69 points to 9,467.15.
And Sydney gained 0.28 percent, or 12.8 points, to end at 4,549.6, rebounding slightly from a two-and-a-half-month low on Wednesday that came after a six-session sell-off.
Seoul ended 0.57 percent, or 11.93 points, lower at 2,071.42 while Hong Kong fell 0.23 percent, or 51.80 points, to 22,609.83 and Shanghai tumbled 1.71 percent, or 46.94 points, to 2,703.35.
In the United States on Wednesday the Fed’s latest survey on economic conditions in all its districts showed overall activity “generally continued to expand” since April.
But its Beige Book report warned there were trouble spots in the east and midwest of the country, where industrial growth and business optimism flagged.
The report came after Tuesday’s downbeat assessment of the economy by Fed chairman Ben Bernanke, who said there was a “loss of momentum” in the already flaccid jobs market.
Adding to the woes, Fitch warned it could remove the United States’ top credit rating if it fails to raise its debt ceiling to avoid a default.
The Dow ended 0.18 percent lower, its sixth straight loss, while the broader S&P 500 dropped 0.42 percent and the tech-rich Nasdaq fell 0.97 percent.
Japan’s Nikkei bounced back in the afternoon following a weak morning as the government said the economy contracted less than first forecast in the first quarter, when the March 11 quake-tsunami disaster sent it into recession.
Tokyo said the economy suffered an annualized 3.5 percent contraction in the past quarter, instead of the 3.7 percent shrinkage first stated, although the change was smaller than economist forecasts of minus 3 percent.
TEPCO, the operator of the Fukushima nuclear plant that was battered by the quake, recovered from a huge loss in early trade – it fell 20 percent to 148 yen at one point – to end down just four percent off at 192 yen.
Selling by short-term speculators has continued on ongoing concerns the utility may be forced into a court-backed restructuring process that will entail the delisting of its shares, analysts say.
“Even if the firm survives, it will not be able to generate shareholder returns so the share price will just steadily trend towards zero,” a fund manager of a Japanese asset management told Dow Jones Newswires.
Kenichi Hirano, operating officer at Tachibana Securities, told Dow Jones “the Nikkei may be supported by a lack of better investment options elsewhere, amid a US economic slowdown, ongoing debt concerns in the eurozone and prospects of more rate hikes in emerging markets.”
The Japanese market picked up on bargain hunting from a morning sell-off and thanks to the dollar’s small rise against the yen.
On forex markets the greenback edged up slightly in morning Tokyo trade to 80.10 yen from 79.88 yen late Wednesday in New York.
With eyes on a European Central Bank rate decision later in the day the euro picked up to 117.04 yen from 116.51 and to $1.4614 against $1.4582 amid hopes of comments that will point to a hike in the near term.
Oil rose after oil cartel OPEC was unable to agree to boost output to ease the burden on the global economy and make up for lost capacity caused by unrest in Libya.
New York’s main contract, light sweet crude for July delivery, gained 41 cents to $101.15 a barrel and Brent North Sea crude for July delivery rose five cents to $117.90 in the afternoon.
Gold closed at $1,536.50-$1,537.50 an ounce in Hong Kong, down from the previous day’s close of $1,537-$1,538.
In other markets:
— Taipei closed flat, ending 6.59 points lower at 9,000.94.
TSMC was 0.77 percent lower to Tw$76.9 while Hon Hai rose 1.49 percent to Tw$102.0.
— Manila closed 0.73 percent, or 31.10 points, lower at 4,224.34.
SM Investments dropped 2.83 percent to 550 pesos and Philippine Long Distance Telephone slipped 0.26 percent to 2,294 pesos.
San Miguel Corp. fell 0.61 percent to 114.80 pesos.
— Wellington shed 1.05 percent, or 35.65 points, to 3,488.75.
Exporters were hurt as the local dollar rose to $0.824 dollars on expectations of an interest rate hike before year’s end. Fletcher Building fell 2.06 percent to NZ$8.57 and whitegoods maker Fisher & Paykel Appliances slipped 2.4 percent to NZ$0.62.
— Jakarta lost 19.64 points, or 0.51 percent, to 3,806.18.
Bank Rakyat Indonesia shed 1.6 percent to 6,300 rupiah, while tin miner Timah lost 1.9 percent to 2,550 rupiah.
— Kuala Lumpur ended down 0.05 percent, or 0.9 points, to close at 1,550.89.
General assurance firm MAA Holdings slid 19.0 percent at 1.11 ringgit as plantation firm Tradewinds Plantation dropped 2.2 percent at 4.01 while Kencana Petroleum climbed 2.2 percent at 2.80.
— Singapore closed down 5.41 points, or 0.17 percent, to 3,097.57.
Neptune Orient Lines lost 1.75 percent to Sg$1.68 and Singapore Airlines rose 1.57 percent to Sg$14.22.
— Bangkok edged up 0.22 percent or 2.27 points to 1,016.85.
Banpu added 2 baht to 722, while PTT gained 3 baht to 333.
— Mumbai ended down 9.39 points, or 0.05 percent, to 18,384.9.
India’s largest commercial bank State Bank of India fell 1.32 percent or 30.25 rupees to 2,263.
Leading passenger car maker Maruti Suzuki India fell 1.23 percent or 15.05 rupees to 1,211 with production of cars stalled at a factory in north India for five days, due to a strike, leading to losses in excess of $40 million.
