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Asian Stocks Mixed, Economic Uncertainty Remains

CNBC.com
Wednesday, 16 Jul 2008 | 5:17 AM ET

Asian markets seesawed Wednesday with investors uncertain about global growth prospects, the state of the financial sector and volatile oil prices. Japan finished flat, South Korea fell but Australia gained over 1 percent.

Companies across the region, such as Toyota Motor , the world's biggest automaker, and Huaneng Power International, China's top electricity provider, have been lowering their sales and earnings outlook in the face of slower demand and higher costs.

Shares in the financial sector initially rose then fell back, though not as sharply as on Tuesday, on general unease about banks' balance sheets after the unveiling of a U.S. bailout plan for top mortgage lenders Fannie Mae and Freddie Mac caused investors to fear the worst about the health of smaller institutions.

Energy firms such as Australia's Woodside Petroleum and Japan's Inpex Holdings took a beating on the fall in oil prices .

Japan's Nikkei 225 Average finished nearly flat, up 0.05 percent as worries about the U.S. economy weighed on automakers, while banks rose on investor hopes for a rebound after U.S. securities regulators moved to limit certain types of short selling in major financial firms. Mitsubishi Corp and other trading firms were hit a day after oil prices tumbled more than $6 a barrel, but chip-related shares buoyed the market after Intel posted
stronger than expected results.

South Korea's KOSPI closed a touch lower, led by financials on persistent credit worries, with Kookmin Bank tumbling after it said it may not go ahead with its planned launch of a holding
company. Shares in SK Telecom lost 2.6 percent on CNBC's report that it was negotiating to buy Sprint Nextel, the No. 3 U.S. mobile service.

Australian shares climbed 1.1 percent, as the big banks bounced back after recent hefty losses, while retailer Woolworths climbed after it stuck to its full-year outlook.

Hong Kong shares gained 0.2 percent, after opening below the key 21,000 support level for the first time since August 2007, as bargain hunters mopped up blue chips following a two-day sell-off. Esprit Holdings outperformed with a 4.3 percent jump after its management acquired shares worth HK$197 million over the last two days in the company's first ever buyback.

Singapore's Straits Times Index moved back into the black and closed 0.2 higher, with most stocks trading sideways.

China's Shanghai Composite index extended losses, falling 2.7 percent, led by financials, as the possibility of an economic slowdown continued to worry investors. Industrial & Commercial Bank of China, the biggest lender, and Pudong Development Bank bothslumped.

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