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Asian Markets Close Mixed in Choppy Trade

CNBC.com
Tuesday, 13 Nov 2007 | 5:21 AM ET

Asian markets closed mixed Tuesday, with Japan ending weaker for an eight consecutive session. But South Korea and Australia managed to eke out gains after weaving in and out of negative territory throughout the day.

The yen hovered near an 18-month high against the dollar as concerns about credit-related losses at U.S. banks prompted investors to trim risky carry trades, in which they borrow low-yielding currencies to buy higher-yielding ones.

Beaten-down financial stocks saw some gains from bargain hunting. Australia's Westpac Banking and Commonwealth Bank, and Japan's top lender Mitsubishi UFJ climbed. But Australia's biggest investment bank, Macquarie Group as much as 4 percent after giving a cautious outlook.

The Nikkei 225 Average end half a percent lower, extending its losing streak into an eighth straight session, as energy-related stocks dropped on lower oil prices and the stronger-than-expected GDP data failed to lift the market. Isuzu Motor was the worst Nikkei 225 performer, tumbling almost 6 percent on lower profit.

South Korea's KOSPI closed 0.5 percent higher, with fuel cost-sensitive stocks such as Korean Air gaining on lower oil prices, while LG Electronics rose after it delivered bullish handset sales forecasts.

Australian shares finished almost 1 percent higher, recouping more than half the losses posted in the previous session, as investors bought back beaten-down financial firms such as the major banks. But Macquarie Group, Australia's top investment bank, fell as much as 5.2 percent on a downbeat outlook, though market watchers said investors were still attracted to the defensive banking sector.

Hong Kong's Hang Seng Index recovered from earlier lows and finished the day in the green, after Wall Street declined for a fourth straight session, while resource shares were crushed by a slide in commodity prices. Petrochina and rival CNOOC were both sharply lower.

Singapore's Straits Times Index fell more than 1 percent as financial stocks lost ground. Investors sold stock of Singapore Exchange on worries that a downturn in trading appetite would hurt earnings for the bourse operator.

China's Shanghai Composite Index finished 0.6 percent lower, after rebounding more than 1 percent during the session as several local fund firms received approvals to raise money for their products, in a sign that Beijing does not want the market to drop much further.

The Shanghai Index is still 14 percent below its all-time high of 6,124 points hit in mid-October, due to a flood of new listings, a temporary freeze on new fund launches and a further hike in bank reserve ratios this past weekend.