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Asian Markets Close Mixed, U.S. Inflation in Focus

CNBC.com
Friday, 21 Sep 2007 | 5:15 AM ET

Asian markets had a mixed end to the week as worries about U.S. inflation grew on the back of a persistently weak U.S. dollar. Japan closed lower but South Korea finished at a seven-week high despite spending most of the session in flat territory.

South Korea's KOSPI rose for a third consecutive session to post a new seven-week closing high as expectations for solid third-quarter earnings sent blue chips such as Hyundai Heavy and POSCO to record highs.

Asian exporters were hit by the weak dollar, which tends to hurt their overseas earnings and erode their export competitiveness. Investors sold exporters such as Samsung Electronics,Honda Motor, Canon and Sony on the back of renewed U.S. worries.

Tokyo's Nikkei 225 Average finished weaker, hurt by selling of exporters on a stronger yen against the dollar. But the downside was solid, braced by steel company shares, which were bought on expectations of good earnings results next month. Investors were also reluctant to take out new positions ahead of a three-day weekend in Japan and U.S. data due next week that will be watched for clues on the health of the economy.

Australian shares closed 0.5% lower, with U.S.-exposed firms such as Westfield Group declining on fresh worries about inflation in the world's biggest economy. But energy firms such as Woodside Petroleum gained on a jump in oil prices, while gold miners rose after the price of the precious metal surged to a 28-year high, capping losses in the market.

Hong Kong blue chips fell as investors pocketed gains after a record-breaking run, but China plays touched a record high as resource shares rallied on high oil and gold prices. Chinese coking coal miner Hidili Industry International Development debuted to a solid reception, with a 68 to 82% gain above its IPO price.

Singapore's Straits Times Index finished lower by 0.3%. But shares of plantation firm Indofood Agri Resources jumped as much as 20% to a two-month high with 22 million shares traded after
Goldman Sachs started coverage of the stock at "buy".

China's Shanghai Composite Index closed 0.3% lower after the country's stock regulator said it would consider next week a plan by PetroChina to launch a Shanghai initial public offering.