Asian shares mostly down as oil fears weigh

HONG KONG—Japanese shares hit a near-seven-month high Monday spurred by a weakening yen, but later slipped in line with most Asian markets as high oil prices countered optimism over debt-hit Greece.

Shortly after the opening, the benchmark Nikkei index hit an intraday high of 9,736.11 – the highest point since August 4 – but lost ground later as investors cashed in on recent gains, brokers said.

It closed 0.14 percent, or 13.45 points, down at 9,633.93.

Hong Kong’s benchmark Hang Seng Index fell 0.88 percent, or 189 points, to 21,217.86 but China bucked regional trends, rising 0.30 percent with oil and auto stocks leading gains after credit restrictions were eased.

The Shanghai Composite Index closed 0.30 percent, or 7.43 points, higher at 2,447.06.

Jittery investors took profits in Hong Kong ahead of the announcement of full-year results by banking giant HSBC.

HSBC, which released its annual results after the Hong Kong close, was off 1.21 percent at HK$69.6 ($9). London-headquartered HSBC said in a statement that profit after tax jumped by 28 percent to $16.8 billion in 2011.

“HSBC has markets in the US, Europe and Asia. Its results are therefore indicative of the performance of other major banks in these key regions,” Jackson Wong, investment manager at Tanrich Securities told Dow Jones Newswires.

“The earnings forecasts for HSBC also varied a lot, making investors even more nervous about the market today.”

In Australia, stocks ended lower on a day when Prime Minister Julia Gillard trounced arch-rival Kevin Rudd in a Labor party leadership ballot.

At the close, the benchmark S&P/ASX 200 was down 42.1 points, or 0.98 percent, at 4,264.7.

The political shenanigans had little impact, with ex-dividend falls in major stocks, including BHP and Woodside Petroleum, accounting for most of the weakness, analysts said.

European stock markets fell at the start of trading, with London’s FTSE 100 index dropping 0.47 percent to 5,907.01 points.

Frankfurt’s DAX 30 lost 0.68 percent to 6,817.46 points and in Paris the CAC 40 retreated 0.48 percent to 3,450.41 points.

Sharon Zollner, senior economist at ANZ bank in Wellington, said in a note that spiking oil prices could be damaging after huge efforts to tame the eurozone’s debt crisis.

“Central banks around the world have been engaging in phenomenal policy stimulus in response to the European crisis, with moderate inflation smoothing the way,” she said, according to Dow Jones.

“An oil shock would be a most unwelcome development, throwing the tradeoffs inherent in monetary policy into sharp relief.”

Oil prices, which had surged to new nine-month highs on Friday, were a little lower in Asia as traders took profits from last week’s gains, while concerns over crude producer Iran’s nuclear program remain, analysts said.

New York’s main oil contract, light sweet crude for delivery in April, shed 45 cents to $109.32, while Brent North Sea crude for April delivery was down 84 cents to $124.63 in the afternoon.

Japanese shares have risen steadily since the start of the month on a string of solid US economic indicators, the Bank of Japan’s expansion of monetary easing programs and the yen’s slide from record high levels.

The dollar stayed firm at 81.16 yen, keeping hold of its recent gains but a shade below the 81.20 yen seen in New York Friday.

The euro edged downward amid speculation that a much-needed bailout for Greece will be approved by the German parliament later in the day despite some domestic opposition.

The single currency stood at $1.3449 in afternoon trade, compared with $1.3451 in New York late Friday. It bought 109.17 yen against 109.22.

The G20 top and developing economies said Sunday that the eurozone must put in place a bigger firewall to combat its debt crisis before other countries will help by giving more cash to the IMF.

At a crunch two-day summit in Brussels starting on Thursday, EU leaders will debate whether to combine their current firewall, the EFSF, with a permanent pot due to come into effect in July.

European Central Bank President Mario Draghi, speaking after the G20 meeting in Mexico, said the eurozone was a safer place for investors than only a few months ago.

But the German Council of Economic Experts, a group of five economists who advise Berlin, told the Handelsblatt newspaper that many problems remained for the eurozone, particularly with the banking system.

US stock markets climbed steadily last week, nearing three-year highs. At the end of the week the Dow was up 0.3 percent to reach 12,982.95 points. The Nasdaq rose 0.4 percent and the S&P 500 rose 0.3 percent.

Gold was at $1,767.20 an ounce at 1000 GMT, compared with $1,779.15 on Friday.

In other markets:

— South Korean shares closed 1.42 percent, or 28.73 points, lower at 1,991.16.

— In Mumbai, the Sensex closed down 2.67 percent, dropping 477.82 points to finish at 17,445.75.

The world’s seventh-largest steel maker Tata Steel fell 7.03 percent to 442.25 while energy giant Reliance Industries fell 4.77 percent to 781.25.

— In Wellington, the NZX 50 closed down 16.32 points, or 0.49 percent, to 3,303.45 after profit-taking weighed on bluechip stocks.

Telecom Corp. slipped 0.46 percent to NZ$2.15, Fletcher Building edged down 0.16 percent to NZ$6.39 and Contact Energy fell 1.24 percent to NZ$4.77.

— Singapore’s main Straits Times Index closed down 31.30 points, or 1.05 percent, to 2,946.78.

Real estate developer Capitaland shed 0.97 percent to Sg$3.07 while DBS Group was down 0.99 percent to Sg$14.02.

— Jakarta closed down 0.9 percent, or 33.55 points, to 3,861.02.

— Bangkok edged down 0.97 percent or 11.10 points to 1,135.04.

Banpu dropped 2.17 percent to 630 baht, while Siam Cement lost 1.43 percent to 345 baht.

— Kuala Lumpur’s main index closed flat at 1,559.04.

Genting shed 0.2 percent to 10.44 ringgit, IOI Corp fell 0.6 percent to 5.40 while Telekom Malaysia added 1.4 percent to 5.15.

— Manila closed 1.92 percent lower to 4,799.29.

Top-traded Union Bank of the Philippines plunged 15.56 percent to 114 pesos.

— Markets in Taipei were closed for a public holiday.