Asian stocks close mixed as oil falls, but Malaysia slides


Posted at Jun 05 2008 07:26 PM | Updated as of Jun 06 2008 03:26 AM

Agence France-Presse

HONG KONG - Asian stocks close mixed Thursday as lower oil prices boosted sentiment but worries about inflation lingered, with the Malaysian bourse diving 2.4 percent after a big fuel price hike.

Malaysian stocks sank following the government's decision Wednesday to hike subsidized fuel prices by 41 percent, as high crude oil prices strain budgets across Asia.

However, the Indian market rose more than 1.5 percent even though New Delhi announced Wednesday hikes of 11 percent and 9.4 percent in petrol and diesel prices, respectively, based on their cost in the capital.

Investors in Asia fear soaring food and fuel costs will stoke inflation, hitting consumer spending, business profits and forcing up interest rates, which could slow economic growth.

However, some were encouraged by lower oil prices, which were trading at around 122 dollars Thursday, off record highs above 135 dollars hit in May.

Elsewhere, Japanese shares fell 0.65 percent and Australia slipped nearly one percent. Shares in Sydney fell as resource stocks tumbled due to sliding commodity prices. Chinese shares also finished down.

But Taiwan, Hong Kong and Singapore ended higher, with Taipei rising more than one percent.

Meanwhile, the Philippines raised key interest rates by 25 basis points Thursday. The overnight borrowing rate rose to 5.25 percent and the overnight lending rate to 7.25 percent, sending Philippine shares nearly two percent down.

Indonesia also raised rates, boosting borrowing costs 25 basis points to 8.50 percent, but its stock market ended more than 1.5 percent up.

Investors were looking ahead to jobs data from the US due Friday. The US is battling a housing and economic downturn after the default crisis in its subprime -- or riskier -- mortgage sector.

TOKYO: Japanese share prices closed down 0.65 percent, dealers said.

The benchmark Nikkei-225 index lost 94.45 points to end at 14,341.12. The broader Topix index of all first-section shares shed 6.02 points or 0.42 percent to 1,424.45.

With the dollar holding steady above 105 yen, "we can expect exporters' shares to push up the benchmark," Hiroyuki Fukunaga, chief executive officer of Investrust, told Dow Jones Newswires.

Nippon Oil gave up 4.7 percent to 724 yen. Mobile telephone operator Softbank climbed 2.8 percent to 1,919 yen after announcing a deal with Apple Inc. to sell iPhones in Japan by the end of the year.

Sony dropped 1.6 percent to 5,420 yen but Toyota Motor gained 0.4 percent to 5,590.

HONG KONG: Hong Kong share prices closed up 0.55 percent, dealers said.

The Hang Seng Index closed up 132.04 points at 24,255.29. Turnover was low at 63.69 billion Hong Kong dollars (8.16 billion US dollars).

China Mobile was up 0.62 percent and China Netcom rose 1.97 percent after investors reacted badly earlier in the week to China's plan to restructure the mainland telecoms industry.

"I expect the Hang Seng Index to trade between 23,800 and 25,000 in the short term," Y.K. Chan, a strategist at Phillip Securities, told Dow Jones Newswires.

China Netcom ended the day up 1.97 percent at 23.25 dollars after it fell 16 percent in the previous two days, and China Telecom gained 0.6 percent to 4.94 dollars after a 13 percent slump in the last two sessions.

But China Unicom fell a further 0.3 percent to 15.16 dollars, extending its 18 percent drop over the previous two days.

SYDNEY: Australian share prices closed down 0.97 percent, dealers said.

The benchmark SP/ASX 200 index was down 54.4 points at 5,530.1, while the broader All Ordinaries shed 64.4 points to 5,633.8. Volume was some 5.4 billion dollars (5.1 billion US dollars).

"The resources sector was where the damage was done because of weaker commodity prices on strength in the US dollar," said Stuart Smith, a private client adviser at Bell Potter Securities.

Woodside Petroleum fell 7.8 percent to 58.63. BHP Billiton was down 4.37 percent to 42.50 and its takeover target Rio Tinto dropped to 134.95.

Macquarie Group closed up 4.66 percent at 53.90 dollars.

SHANGHAI: Chinese share prices closed 0.54 percent lower, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, closed down 18.27 points at 3,351.65 on turnover of 53.3 billion yuan (7.6 billion dollars).

State media reported Thursday that both the Shandong and Shaanxi provincial government urged coal miners in the regions not to raise thermal coal prices.

"The price cap may have limited impact on coal producers' earnings prospects, but it will hurt investor confidence in the near term," said Cao Yan, an analyst with Soochow Securities.

Meanwhile, investors fretted about liquidity as the securities regulator prepared to review China State Construction Engineering's massive initial public offering.

The Shanghai A-share Index fell 0.55 percent at 3,516.22. The Shenzhen A-share Index shed 1.02 percent at 1,060.98.

Yanzhou Coal Mining tumbled 9.26 percent to 21.35 yuan. China Coal Energy slipped 6.47 percent to 17.93. China Shenhua Energy, the country's largest coal producer, was down 6.15 percent at 42.87 yuan.

Steelmakers were also pressured due to fears of price controls. Baoshan Iron Steel lost 3.43 percent to 11.54 yuan.

PetroChina was up 0.63 percent at 17.49 yuan. Sinopec rose 2.52 percent to 13.81.

TAIPEI: Taiwan share prices closed up 1.28 percent, dealers said.

The weighted index closed up 110.66 points at 8,738.46 on turnover of 102.03 billion Taiwan dollars (3.35 billion US).

"The late-trade buying focused on electronic heavyweights which had recently suffered heavy losses. I suspect the interest largely came from institutional investors," Taiwan International Securities analyst Arch Shih said.

Acer rose 1.60 to 65.00 dollars and Asustek was up 1.20 at 88.70. Taiwan Semiconductor Manufacturing Co. added 0.60 to 67.70, United Microelectronics Corp. rose 0.10 to 18.45 and Compal Electronics grew 1.10 to 33.60.

SEOUL: South Korean shares closed little changed, dealers said.

The KOSPI index closed down 1.50 points at 1,832.31. Volume was 267 million shares worth 4.9 trillion won (4.7 billion dollars).

"Negative news from the US financial sector are catching investors' attention again and this will likely continue until key US investment banks report their earnings in mid-June," said Kim Ji-Hyung, a strategist at Hanyang Securities.

Hyundai Motor gained 1.0 percent to 80,900 won and LG Electronics rose 0.7 percent to 140,000 won. Hynix Semiconductor advanced 3.5 percent to 31,300 won. POSCO dropped 0.9 percent to 585,000 won.

SINGAPORE: Singapore share prices closed 0.29 percent higher, dealers said.

The blue-chip Straits Times Index rose 9.09 points to 3,143.89 on volume of 1.00 billion shares worth 1.36 billion Singapore dollars (0.99 billion US).

"Traditionally, June is not a good month for the stock market as people go on holiday," said Gabriel Yap, senior dealing director at DMG & Partners Securities.

United Overseas Bank down 12 cents to 19.54 Singapore dollars. Keppel Land gained 3.9 percent to 5.36. Singapore Telecommunications advanced seven cents to 3.69 and Singapore Airlines ended flat at 15.90 dollars.

KUALA LUMPUR: Malaysian stocks closed down 2.4 percent, dealers said.

The Kuala Lumpur Composite Index fell 29.56 points to 1,223.56 after fuel prices were hiked 41 percent and the energy subsidies reformed.

"The hike in fuel prices and planned hike in electricity tariffs point to higher inflation and potential erosion in corporate earnings," a dealer told Dow Jones Newswires.

Central bank governor Zeti Akhtar Aziz indicated that the 5.0-6.0 percent economic growth forecast for 2008 would be clipped to 5.0 percent.

Palm oil producers, who will be hit by a new windfall tax under the subsidy reforms, were among the decliners. IOI Corp was down 2.7 percent at 7.10 ringgit and Sime Darby was 2.8 percent weaker at 8.85 ringgit.

National carmaker Proton fell 3.2 percent to 3.02 ringgit, conglomerate Genting slumped 4.1 percent to 5.80 ringgit and UEM World slipped 4.4 percent to 3.08 ringgit.

BANGKOK: Thai share prices closed up 0.11 percent, dealers said.

The Stock Exchange of Thailand (SET) composite index rose 0.90 points to close at 809.82 while the blue-chip SET 50 index edged up 0.94 points to 579.10.

"The market fell in the morning and rebounded later when closing. Politics is apparently the main factor influencing the market today," said Mayuree Chowvikran, senior vice president at Kim Eng Securities.

"Foreign investors have sold shares worth more than 22 billion baht since political tensions began last week," she added.

Anti-government protests continued for the 12th day on Thursday, led by activists in the so-called People's Alliance for Democracy.

The same group led mass street demonstrations against premier Thaksin Shinawatra in early 2006, before his overthrow in by royalist generals in a coup later that year.

PTT Plc rose 2.00 baht to close at 324.00 baht. Bangkok Bank was unchanged at 124.00. Thai Airways International edged up 0.50 at 24.90.

JAKARTA: Indonesian shares closed 1.6 percent higher, dealers said.

The Jakarta Composite Index ended up 37.09 points at 2,399.67.

"This kind of mild rate hike should help companies to maintain their growth," a trader said.

Indonesia's central bank raised its key policy rate by 25 basis points to 8.5 percent Thursday.

Bank Mandiri rose 1.8 percent to 2,850 rupiah. Heavyweight Telkom gained 3.8 percent at 8,150 on bargain buying. Bumi rose 6.2 percent at 7,700.

MANILA: Philippine share prices closed 1.97 percent lower, dealers said.

The composite index lost 54.70 points to 2,718.42. The all-share index was down 26.84 points to 1,697.07 points.

"The market is down because of the inflation figures," said Allan Araullo of Regina Capital Development Corp. The inflation rate hit a nine-year high of 9.6 percent in May.

Philippine Long Distance Telephone fell 1.9 percent at 2,510 pesos. Ayala Corp. skidded 5.3 percent to 310 pesos. Ayala Land fell 2.38 percent to 10.25 pesos.

San Miguel Corp. saw its A and B shares remain unchanged at 41 and 42 pesos respectively.

The central bank raised interest rates by 25 basis points Thursday.

WELLINGTON: New Zealand share prices closed little changed, dealers said.

The NZX-50 gross index fell 1.72 points to 3,555.97.

New Zealand central bank governor Alan Bollard said Thursday that the official interest rate could be cut this year despite high inflation.

"I think everyone breathed a sigh of relief when that statement was released," said Grant Williamson of Hamilton Hindin Greene.

Bollard held the official rate at 8.25 percent as expected, but said the economy faced a combination of weak growth and high inflation.

Fisher & Paykel Healthcare rose 14 cents to 2.48 dollars, Pumpkin Patch was up two cents at 1.71 and seafood exporter Sanford rose 20 cents to 5.00. Telecom fell two cents to 3.91 dollars.

MUMBAI: Indian share prices closed up 1.64 percent, dealers said.

The benchmark Mumbai 30-share Sensex rose 254.93 points to 15,769.72.

"Globally the scenario remains grim. Short-covering pulled the markets up, but choppiness could continue into next week," said a dealer at Emkay Shares and Securities.