Asia-Pacific Markets

Asia Falls on Recovery Worries, Nikkei Down 1.3%

CNBC with wires

Asian stock markets traded lower on Wednesday, following the negative lead on Wall Street overnight.

Japan's Nikkei average ended 1.3 percent lower, as debt problems in Greece and Dubai dampened investor confidence and pushed up the yen which weighed on exporters.

Adding to the downbeat tone, revised GDP data showed Japan's recovery was slowing, while a weaker-than-expected outlook from diversified manufacturer 3M and disappointing sales from McDonald's dragged U.S. stocks lower.

Japan's economy grew 0.3 percent in the third quarter, revised government data showed on Wednesday, much slower than an initial reading of 1.2 percent growth due to weaker corporate spending.

But Suzuki Motor climbed over 4 percent after sources said Volkswagen plans to take a stake of up to 20 percent in it, providing Suzuki with a much-needed development partner and giving VW access to better small-car technology.

Suzuki said in a statement that there was no decision now and that it would make an announcement as soon as one had been made.

The benchmark Nikkei shed 135.7 points to 10,004.72, after rising more than 10 percent last week. The broader Topix fell 1.3 percent to 884.9 points.

Shares of exporters fell, with Honda slipping 2.14 percent and Toyota Motor declining 1.07 percent. Canon shed 1.6 percent and Advantest lost 3.9 percent.

Resource-linked shares lost ground as commodity prices fell amid the general investor retreat from riskier assets. Mitsubishi Corp, Japan's largest trading house, fell 1.57 percent and fellow trader Mitsui & Co lost 3.2 percent.

But a broad range of defensive shares, seen as resilient during times of economic trouble, bucked the trend, with railways and power companies gaining.

Aeon shot up 3.6 percent after Talbots laid out an acquisition and financing plan that would reduce debt and end a 21-year relationship with Japan-based majority owner Aeon. Talbots has struggled with a string of losses, a heavy debt burden and weak sales in the economic downturn.

Zeon Corp rose 1.2 percent to 409 yen after Nomura Securities upgraded the maker of LCD-use resins to "buy" and hiked its target price, citing an increasingly strong recovery in demand for LCD film.

Engineering company JGC slipped 0.4 percent to 1,723 yen, outperforming the broader market on news JGC and Chiyoda Corp had jointly won an estimated $45 million contract for a $15 billion LNG project in Papua New Guinea. But Chiyoda plunged 6.2 percent, partly on profit-taking after it rose 1.8 percent on Tuesday in anticipation of winning the bid.

Seoul shares reversed earlier losses to end up 0.4 percent as investors shrugged off fresh economic and credit jitters, with gains led by automakers and technology issues.

The Korea Composite Stock Price Index (KOSPI) finished up 0.39 percent at 1,634.17 points, after shedding 1.1 percent to a session low of 1,609.81 points.

Automakers gained ground, with Hyundai Motor, the country's top automaker, rising 3.3 percent and Kia Motors up 4.49 percent.

Woori Finance lost 1.3 percent and POSCO, the world's No.4 steelmaker, declined 2.2 percent.

Hyundai Department Store fell 3.3 percent, weighed down by local media reports quoting a senior executive as saying the firm would review the acquisition of a non-retail business. He also said the department store operator had secured enough capital to invest 600 billion won ($517.5 million) annually.

Daewoo Shipbuilding & Marine Engineering soared 11 percent before paring gains to close up 4.3 percent, on news its main shareholder, Korea Development Bank, has resumed the process to sell its controlling stake in the shipyard.

Shares in Kumho Industrial rose 1.85 percent after the builder said in a regulatory filing that it had won a construction order worth about $136.5 million from Vietnam.

Australian shares fell 0.7 percent on Wednesday, as investors dumped big miners as a rebound in the U.S. dollar on Dubai and Greece's debt woes hurt metals prices.

Resources firms slipped after copper, gold and oil prices declined on concerns about the health of the global economy.  BHP Billiton shed 1.2 percent to A$40.55. It said it will sell its idled Ravensthorpe nickel mine to Canada's First Quantum. Rival Rio Tinto shed 1.4 percent to A$70.90.

Minara Resources, which lost out to First Quantum in the bidding for Ravensthorpe, fell 4 percent to A$0.73.

The S&P/ASX 200 index fell 32.7 points to 4,637.9, down for the fourth day in a row. New Zealand's NZ50 index fell 0.3 percent to  3,127.6.

Caltex Australia, the country's biggest refiner, dropped 4.1 percent to A$8.64, after saying the outlook for the first half of 2010 was weak. It expects refining margins will continue to be squeezed as in the second half of this year.

Banking stocks were mostly lower, weighed down by concerns that a sluggish economic growth would slow credit growth. ANZ lost 1.9 percent and Westpac Banking Corp fell 1.09 percent.

Taiwan stocks closed 0.37 percent higher, led by tech shares such as Hon Hai as investors ignored weakness on Wall Street and piled into shares of companies that have better earnings outlook.

The main TAIEX share index ended up 28.71 points at 7,797.42.

Hon Hai Precision, Taiwan's largest electronics parts maker, rose 1.43 percent, with the electronics sub-index up 0.55 percent.

DRAM stocks outperformed on a likely chip shortage next year, with Nanya Technology climbing 1.3 percent.

UMC, the world's No. 2 contract chip maker, fell 1.5 percent after the company's November sales showed slower chip sales after tech demand peaked in the third quarter.

Financial plays fell after concerns over the potential fallout of debt problems in Dubai and
Greece surfaced. Cathay Financial lost 0.3 percent while Chinatrust Financial shed 1.27 percent.

China's Shanghai Composite Index declined 1.7 percent to 3,239.56 points, adding to Tuesday's 1.1 percent fall. Investors were cautious amid worries about increased supply of shares in the market and possible fundraising in the banking sector.

Bank stocks dragged, with ICBC down 1.1 percent and China Construction Bank losing 1.6 percent. Mid-sized lender Industrial Bank sagged 2.38 percent to 39.32 yuan after saying that its shareholders had approved its plan for an 18 billion yuan rights share issue.

China Shipbuilding Industry said on Wednesday it priced its A-share initial public offering at 7.38 yuan a share, as expected at the top of an indicated range, raising 14.7 billion yuan.

Metal and coal shares were soft as the commodity markets were sluggish, with Jiangxi Copper down 2.32 percent while China Shenhua Energy lost 1.82 percent.

Hong Kong's Hang Seng fell 1.4 percent to 21,741.76 points amid concerns about
consumer spending in the U.S. after disappointing results from McDonald's and 3M.

Index heavyweight HSBC extended its decline on renewed worries over the lender's exposure in Dubai. The stock was down 1.9 percent.

Dubai World has not yet shown the creditors a proposal on its plan to delay payment on its debt, while rating agency Moody's slapped a downgrade on government-related debt

Wing On Travel slumped 21 percent after the firm said it planned to raise up to HK$549 million ($70.84 million) by issuing up to 3.66 billion rights shares at HK$0.15 each, and would issue HK$300 million convertible bonds.

Geely Automobile rose 2.4 percent after hitting a record of HK$4.84 earlier. The Chinese carmaker has risen 12.5 percent in the last two days after it gave an upbeat sales target.

Hong Kong Health Check and Laboratory advanced for a second day, gaining 4.69 percent. The stock surged 39.13 percent on Tuesday when it resumed trading after being suspended since Dec. 2. The firm said it would set up a joint venture with a Chinese state-owned enterprise to engage in the solar photovoltaic business in Haenan province.

New Times Energy surged 12 percent on news it would buy a 90 percent stake in three gold mines with licenses in Qinglong Manchu Autonomous County, Hebei province, for HK$630 million, a deal to be settled in cash and by issue of new shares.

Guangzhou Investment advanced 4.67 percent. The developer said it had secured a HK$3.2 billion syndicated loan facility from a group of banks in Hong Kong.

Chinese developer Kaisa Group Holdings traded 0.29 percent higher on its debut after gaining as much as 4 percent to HK$3.59 in the session, versus its IPO price of HK$3.45 apiece.

Markets in Singapore and Malaysia tracked the region lower, with the STI down 0.3 percent and the KLCI at 0.5 percent lower.

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