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Asian Stocks Drift, Nikkei Ends Below 10,000

Asian stock markets traded rangebound on Thursday, after major indices on Wall Street ended mostly flat on mixed economic data and a disappointing outlook from FedEx.

U.S. housing starts fell more than expected in May to a five-month low, casting a shadow over better-than-expected industrial production data for the same month.

FedEx , deemed an economic bellwether because it serves a wide range of industries, said higher costs would constrain 2011 earnings. Its shares fell, weighing on the wider market.

Japan's Nikkei average fell 0.7 percent to snap a five-session gain and come off a one-month
high, though support was expected to hold at the level of the benchmark's 25-day moving average.

The Nikkei shed 67.75 points to 9,999.40, after spending most of the day above 10,000, which market players cite as a key level and has been both support and resistance at different times over the past year.

Support was seen around 9,800, the level of the Nikkei's 25-day moving average, after the Nikkei closed above it on Tuesday for the first time in roughly two months.

The broader Topix slipped 0.6 percent to 887.48.

Shares of Fujitsu rose 1.0 percent and Toshiba gained 0.83 percent. The two companies announced they would merge their mobile phone businesses in October, with Fujitsu to take a majority stake in a joint venture. The move would create Japan's No. 2 cellphone maker.

Exporters fell after leading gains in the broader market the previous day. A market player said on Wednesday that long positions had accumulated in blue chip shares, leaving them vulnerable should the market's upward momentum falter.

Sony slid 2.8 percent and Kyocera slipped 2.9 percent. Honda Motor lost 0.8 percent to 2,736 yen.

Seoul shares ended slightly higher, maintaining their upswing and hitting another 6-week closing high. The gains were supported by strength in techs and airlines, but capped by losses in telecommunications and banking issues.

The Korea Composite Stock Price Index (KOSPI) finished up 0.15 percent at 1,707.92 points, the highest close since early May.

Hynix Semiconductor, the world's No.2 memory chip maker, rose 3.3 percent and LG Electronics, the world's No.3 handset maker, advanced 1.8 percent.

Woori Finance extended gains, rising 1.8 percent, after KB Financial nominated a new chairman who is expected to seek a merger with Woori. KB Financial retreated 0.8 percent.

Shipbuilders also rose, with Daewoo Shipbuilding & Marine Engineering up 1.06 percent after news it had won a $350 million order to build three bulk carriers.

The news boosted other shipyards, with Hyundai Heavy Industries gaining 1.97 percent and Samsung Heavy Industries climbing 1.7 percent.

Airlines and tour operators continued to chalk up gains as summer holiday season approaches, buoyed by expectations that bookings will pick up strongly from depressed levels during the financial crisis.

Korean Air Line, South Korea's top air carrier, rose 2.1 percent and tour operator Modetour, jumped 6.1 percent.

Australia Slips, Miners Fall

Australian stocks finished 0.7 percent lower, weighed down by big banks and miners as
investors turned to defensive stocks after weak housing data stoked concerns about the U.S. economic recovery.

The benchmark S&P/ASX 200 index gave up 31.7 points to close at 4,527.3, reversing most of the previous session's gain.

New Zealand's benchmark NZX 50 index also lost 0.7 percent, closing at 3,045.7.

BHP Billiton, the world's biggest miner, fell 1 percent to A$38.84, while Rio Tio was down 1.7 percent at A$70.07.

National Australia Bank led the big banks lower, sliding 1.2 percent to A$24.80.

Amadeus Energy, a small oil and gas explorer, jumped 22 percent to A$0.225, valuing the group at A$68 million, after saying it had received takeover approaches from U.S.-based companies. It has appointed Macquarie to advise it on the best way to boost the group's value.

QBE Insurance, Australia's biggest insurer by premium income, fell 0.5 percent to A$18.84 after flagging late on Wednesday that its insurance margin for the first half of this year would come in at the lower end of its 16-18 percent target range.

Greater China Markets Climb

Markets in Hong Kong, Taiwan and China resumed trade following a holiday to trade in the plus column.

The benchmark Hang Seng index rose, playing catch-up with gains in overseas bourses yesterday.

CNOOC ranked among the best-performing blue chips, climbing 2.3 percent on crude strength.

But Henderson Land bucked the trend. Its shares fell 2.3 percent, weighed down by news that the sales of 20 units out of 24 at a luxury project will be cancelled.

The Shanghai Composite closed lower, on its first trading day of the week.

Taiwan stocks advanced almost 0.8 percent to a one-month intraday high, buoyed by major technology exporters on hopes of growing demand for technology products.

Small-cap companies that have better earnings prospects this year also outperformed, with analysts saying domestic fund managers were targeting the stocks before their books closed for the second quarter.

The main TAIEX share index climbed, extending a 0.9 percent rise on Tuesday. Taiwan's financial markets were closed on Wednesday for a national holiday.

Top contract chipmaker Taiwan Semiconductor Manufacturing rose after announcing on Wednesday it had invested in a U.S. solar start-up.

Small-cap LED chip supplier Epistar outperformed, rising 3.2 percent.

Hon Hai Precision Industry advanced, helping to boost the electronics sub-index.

In Southeast Asia, stocks in Singapore ended slightly lower, but stocks in Malaysia ended slightly higher.

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