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Asian Stocks End Mixed; Nikkei Extends Fall

CNBC Staff and Wire
Monday, 28 Jun 2010 | 8:20 AM ET

Asian stock markets ended mixed in cautious trade Monday, as investors awaited June jobs data due out Friday for clues on how the U.S. economy is faring following recent setbacks including a sharp decline in new home sales last week.

There was little impact from the weekend meeting of the Group of 20 rich and developing economies, at which world leaders agreed to take different paths towards ensuring lasting growth and making their banking systems safer.

Japan's Nikkei average inched down to its lowest close in more than two weeks, led by blue-chip exporters, with market players saying the benchmark could test six-month lows hit this month.

Market players said a dearth of buying factors could push Tokyo shares still lower ahead of the Bank of Japan's quarterly "tankan" survey of corporate sentiment on Thursday and U.S. job
figures on Friday.

The benchmark Nikkei shed 0.5 percent to 9,693.94, its lowest close since June 10, The index fell 1.9 percent on Friday and lost 2.6 percent over all of last week.

The broader Topix dropped 0.8 percent to 860.80.

Toyota Motor fell to a 15-month closing low, down 1.1 percent lower at 3,100 yen, after news it was recalling and temporarily halting sales of its 2010 Lexus HS250h hybrid sedan due to a potential fuel leak problem.

Shares of Mizuho Financial extended losses to hit a 7-month low of 149 yen. Japan's No.2 bank said it would raise a slightly higher-than-expected $9.6 billion in a previously flagged global offering that will boost its shares outstanding by 38 percent.

Other banking shares also fell, with Mitsubishi UFJ Financial down 1.9 percent at 411 yen and Sumitomo Mitsui Financial Group losing 1.9 percent to 2,608 yen.

Seoul shares closed marginally higher, as Kia Motors and LG Display climbed ahead of earnings next month, but mid-sized builders plunged on debt restructuring plans.

The Korea Composite Stock Price Index (KOSPI) finished up 0.13 percent at 1,732.03 points, with the daily trading range limited to 10 points, extending its rangebound spell between 1,720 and 1,740 from last week.

LG Display, the world's No.2 LCD flat screen maker, rose 2.0 percent to 43,200 won as expectations for a strong earnings recovery in the third quarter outweighed concerns that Q2 results would be hit by falling panel prices and weak demand from Europe.

Construction companies were hammered after the country's top regulators said late on Friday that it would place 65 contractors, builders and shipping companies under debt rescheduling program.

Joongang Construction and Namkwang Construction, requested by the stock exchange to clarify market talk that they have been placed under debt restructuring plans,
tumbled by the daily limit of 15 percent. Namkwang said it would seek normalization with creditors.

Woori Finance Holdings rose 1.6 percent on expectations that its long-delayed privatization plan is on track after a top regulator said in an interview with a local media that the group would be sold by the end of this year.

The government, which controls 57 percent of Woori, plans to announce privatization plan in coming weeks.

Australian shares extended early losses to close 0.7 percent lower. Economic concerns
weighed on investors, although a brief spike on the back of a contributor error sent the index to a two-month high.

The benchmark index eased 28.5 points at 4,384, after closing 1.5 percent lower on Friday.

The market was hit by caution over the economic outlook, after a series of weak data from the U.S. has cast doubt over the strength of the global economy.

New Zealand's benchmark NZX 50 index was 0.8 percent lower at 3,008.4.

Miners started firmer but quickly retreated despite firmer base metal prices. A media report on Monday said Australia's new Prime Minister Julia Gillard wanted to reach a quick compromise
with the mining industry on the contentious 40 percent super profits tax.

Global miners BHP Billiton lost 0.8 percent to A$38.49 and Rio Tinto eased 1.44 percent to A$68.60.

Banking stocks turned lower, with Westpac down 1.1 percent at A$21.51 while Macquarie declined 1.39 percent.

Hong Kong stocks traded higher after most U.S. stock indexes rose slightly on Friday. But a lack of fresh leads kept gains modest following five straight weeks of rises.

The benchmark Hang Seng index rose 0.2 percent .

CNOOC outperformed, advancing 2.5 percent, supported by strengthening crude oil prices. Sino Land climbed 2.2 percent on the back of brisk sales at The Hermitage project over weekend.

China's key stock index closed 0.7 percent lower, with volume shrinking to an 18-month low, as tight liquidity conditions brought about by Agricultural Bank of China's looming stock offering starved the market of momentum for near-term gains.

The Shanghai Composite Index ended the session at 2,535.3 points, slipping for a fourth day in a row.

China's stock market remains one of the world's worst performers this year, down nearly 23 percent after authorities unleashed policies to ease speculation in the red-hot property sector.

The index is down over 18 percent on the quarter.

Taiwan stocks ended 0.35 percent higher, led by banks, insurance and shipping companies on optimism they will benefit from a landmark trade deal with China to be signed this week.

The economic cooperation framework agreement, or ECFA, gives preferential treatment to Taiwan banks in setting up operations in China and removes tariffs from hundreds of Taiwanese products exported to the mainland.

"Financial shares are particularly strong as the ECFA comes up because banks hope they can do renminbi business at an early date in China," said Michael On, managing director at Beyond
Asset Management. "Marine shipping stocks are also expected to gain this week, hoping to see more goods shipped between China and Taiwan."

The main TAIEX index closed at 7,500.79 .

Among banks, Chinatrust Financial was up 1.1 percent. Union Insurance and First Insurance jumped by the daily limit of 6.8 percent, while Taiwan Life gained 1.16 percent.

Shipper Evergreen Marine surged5 percent and Yang Ming Marine was limit up with a 7 percent gain. Formosa Plastics climbed 1.4 percent.

In Southeast Asia, Singapore's STI closed higher in a thin session as investors stayed on the sidelines ahead of a slew of U.S. economic data due out later in the week.

The benchmark index rose 0.6 percent .

Shares of China Gaoxian Fibre Fabric Holdings advanced 5.3 percent to S$0.20 ($0.14) in active trading on news the firm plans to seek a dual listing on the South Korean stock exchange.

The rise in the firm's share price "reflects investors' hopes that overseas listings normally bring higher valuations," said a local trader.

But Singapore-listed Chinese water treatment firm Sound Global lost 5.3 percent to S$0.81 ($0.58) after the company said it had postponed plans to seek a dual listing on the Hong Kong stock exchange.