Asian stocks mixed ahead of US inflation data


Posted at Jun 13 2008 07:45 PM | Updated as of Jun 14 2008 03:45 AM

Agence France-Presse

HONG KONG - Asian stocks were mixed Friday in cautious trade ahead of the release of key US inflation data and a crucial G8 meeting thought likely to deliver a boost to the dollar.

Tokyo's main bourse finished 0.61 percent up as finance ministers from the world's richest nations met in Osaka, aiming for consensus on how to tackle soaring crude oil and food prices worldwide.

The benchmark Nikkei-225 index gained 85.13 points to close at 13,973.73.

However, other markets fell with China the day's biggest loser, 3.0 percent down, as dealers abandoned hope that the government would step in to bolster trading conditions.

The Shanghai Composite Index closed down 88.73 points at 2,868.8.

Investor confidence elsewhere was low ahead of the release later Friday of consumer inflation data in the United States, seen as a crucial indicator to the state of the world's biggest economy.

In Hong Kong the Hang Seng Index lost a heavy 1.87 percent in thin trading amid concern that the US Federal Reserve would soon hike interest rates, seen as making equities less attractive for investors, dealers said.

But Australia saw a slight rise, up 0.9 percent, on the back of steady energy and resources trading.

The benchmark SP/ASX200 closed up 48.9 points at 5,378.1, while the broader All Ordinaries gained 46.4 points to 5,479.6.

Concern over the cost of oil continued to affect confidence in other markets despite crude trading lower, near 136 dollars in Asia on Friday.

G8 finance ministers are meeting in Japan to discuss threats to the global economy as well as the lingering fallout from the subprime loan crisis in the United States.

They were also considered likely to try and give support to the dollar, seen as necessary for stabilizing the wider global economy.

TOKYO: Japanese share prices gained 0.61 percent as the market welcomed a rise in the dollar, dealers said.

The benchmark Nikkei-225 index gained 85.13 points to close at 13,973.73. The broader Topix index of all first-section shares rose 8.43 points or 0.62 percent to finish at 1,371.57.

The dollar was buoyed overnight by stronger than expected US retail sales.

"The Nikkei itself seems to be ready to rebound next week as it looks like it has finished a short-term correction," Hideyuki Ookoshi, fund manager at Chibagin Asset Management, told Dow Jones Newswires.

Expensive oil battered paper and pulp companies on worries about increased costs, making the sector the day's biggest loser.

Oji Paper lost 4.3 percent to 508 and Nippon Paper Group. dropped four percent to 288,000 yen.

Daiichi Sankyo slipped 2.3 percent to 2,910 yen after an Indian press report said Pfizer Inc. may consider a rival bid for leading Indian drug maker Ranbaxy Laboratories.

The Japanese company and Ranbaxy announced a takeover deal on Wednesday as Daiichi Sankyo looks to expand in emerging economies.

HONG KONG: Hong Kong share prices closed down 1.87 percent, dealers said.

The Hang Seng Index dropped 431.56 points to 22,592.30, off a low of 22,592.30 and a high of 22,984.09.

Property companies led the decline on expectations of an increase in mortgage interest rates. Sino Land fell 5.54 percent, Swire Pacific dropped 3.74 percent, and Cheung Kong Holdings was down 3.09 percent.

Analysts said they expected the market to remain under pressure in the near term on concerns over the economic effects of high crude oil prices and the US economic outlook.

"The global stock market will continue to be overshadowed by concerns over inflation and a (US) rate hike in the short term," Ernie Hon, an analyst at ICEA Securities, told Dow Jones Newswires.

Bank of East Asia fell 2.9 percent to 44 dollars and Hang Seng Bank slid 0.4 percent to 156.9 dollars.

SYDNEY: Australian shares closed 0.9 percent higher, dealers said.

The benchmark SP/ASX200 closed up 48.9 points at 5,378.1, while the broader All Ordinaries gained 46.4 points to 5,479.6.

Traders said Wall Street's rise overnight gave the market a boost but there were sharp falls in some financials, including investment manager Babcock & Brown.

"The market recalibrated itself in the afternoon following some overselling in the morning," Macquarie Private Wealth senior private client adviser Marcus Droga told Dow Jones Newswires.

Market heavyweight miner BHP Billiton added 3.0 percent to close at 43.04 dollars while rival and takeover target Rio Tinto gained 3.6 percent to 134.50 dollars and iron ore company Fortescue climbed 5.4 percent to 9.91 dollars.

Shares in Babcock & Brown were battered over concerns about its heavy debt structure, sliding 24 percent to close at 5.25 dollars.

Babcock & Brown's investment firm rival Macquarie Group fell 3.0 percent to close at 49.17 dollars.

SHANGHAI: Chinese share prices closed 3.0 percent lower amid weak sentiment as investors' hopes that the government would bolster the market through new regulations faded, dealers said.

The market lacks the incentives necessary for a sustainable rebound after the key index fell eight consecutive days and hovered around a 15-month low, traders said.

"Investors finally get that they can't rely on the government to boost the market, as the government doesn't have many useful tools at hand," Zhang Qi at Haitong Securities told Dow Jones Newswires.

The benchmark Shanghai Composite Index, which covers A and B shares, closed down 88.73 points at 2,868.8 on turnover of 45.2 billion yuan (6.5 billion dollars).

For the second day this week the index closed below the key psychological 3,000 level.

Analysts said investors were pessimistic as persistent inflation and diminishing demand from end users are likely to squeeze corporate earnings further.

PetroChina, the biggest index component, lost 2.47 percent to 14.99 yuan, while China Petroleum Chemical Corp (Sinopec) shed 2.26 percent to 11.26.

TAIPEI: Taiwan share prices closed up 0.54 percent after a positive Wall Street performance overnight but gains were capped amid inflation concerns, dealers said.

The weighted index closed up 43.28 points at 8,105.59, off a low of 8,042.89 and off a high off 8,161.64, on turnover of 101.34 billion Taiwan dollars (3.32 billion US).

The financial sector was up 1.70 percent and electronics up 0.27 percent.

Transport was down 2.85 percent and tourism 0.10 percent lower.

"Today's gains were just a technical rebound. Inflation concerns on high crude international prices remained," President Securities analyst Johnny Lee said.

SEOUL: South Korean shares closed only slightly higher, analysts said.

The KOSPI index finished up 7.99 points or 0.5 percent, at 1,747.35.

The index rose as much as 1.2 percent in early trade as investors cheered better than expected US retail sales figures overnight. But they soon began locking in gains while waiting for US inflation data due later Friday.

Growing domestic political and social instability added to the caution, with truckers starting a strike in protest at rising oil prices.

"Tech blue chips and automakers led rises while shipbuilders, shipping lines and steelmakers declined," said Bae Sung-Young, an analyst at Hyundai Securities Co.

SINGAPORE: Singapore share prices ended 1.34 percent lower, closing below the psychologically important 3,000 points level for the first time since March.

The blue chip Straits Times Index finished 40.59 points lower at 2,979.56 on volume of 1.58 billion shares worth 1.22 billion dollars (886 million US).

Aircraft maintenance firm SIA Engineering was the biggest blue-chip decliner, ending down 5.0 percent or 20 cents at 3.80 Singapore dollars after it said global economic uncertainties and a weak US dollar may affect its earnings.

Singapore Airlines was eight cents lower at 14.82.

In the banking sector, DBS Group dropped 28 cents to 19.06, UOB also fell 28 cents, to 18.88, and OCBC was nine cents lower at 8.20.

KUALA LUMPUR: Malaysian share prices closed 0.3 percent up, dealers said.

The Kuala Lumpur Composite Index rose 3.81 points to 1229.35.

"Gains on Wall Street overnight triggered some buying interest in early trade but profit-taking ahead of the weekend capped gains," a dealer told Dow Jones Newswires.

"Local government-linked funds provided buying support in the last hour of trade to keep the benchmark in positive territory," he said.

Malaysia's state-linked telecommunications company Telekom was up 2 sen to 3.20 ringgit while the country's biggest bank in terms of assets, Maybank, was up 5 sen at 7.35 ringgit. Power giant Tenaga was stable at 8.45 ringgit.

BANGKOK: Thai shares closed 1.03 percent lower as foreign investors sold shares in big-cap stocks, especially in the energy sector, dealers said.

The Stock Exchange of Thailand (SET) composite index fell 8.16 points to close at 782.64, while the blue-chip SET 50 index lost 6.73 points to 559.31.

Shares prices fell in major stocks including energy, banking and property shares.

"Concerns over high inflation driven by high fuel prices remained and dampened the market sentiment," said Viriya Lappromrattana, senior vice president at Kiatnakin Securities.

JAKARTA: Indonesian shares closed 0.4 percent lower on swift profit taking after yesterday's rise, dealers said.

The Jakarta Composite Index ended down 10.59 points at 2,398.42 on volume of 3.35 billion shares worth 4.9 trillion rupiah (534.1 million dollars).

Bumi Resources fell 4.1 percent to 8,200 rupiah, rival Bukit Asam dropped 2.3 percent to 14,650 while nickel miner Antam shed 2.2 percent to 3,300.

Car distributor Astra gained 1.6 percent to 19,700 on bargain buying.

MANILA: Philippine share prices closed 0.4 percent higher in a technical rebound after four straight days of decline, analysts told AFP.

The composite index added 9.86 points to 2,554.75,.

The all-shares index rose 8.84 points to 1,628.46.

"We have been oversold for the past four days, so this is just a technical bounce," said Nestor Aguila of DA Market Securities.

A number of listed companies are now trading below their price-earnings ratios, he added.

Among the top gainers were Petron Corp. which added 30 centavos to 6.20 pesos and San Miguel Corp., whose A shares rose by a peso to 41. San Miguel B added 1.50 pesos to 41.50.

WELLINGTON: New Zealand share prices closed 0.68 percent lower amid concerns about the gloomy prospects for the local economy, dealers said.

The NZX-50 gross index fell 23.22 points to 3,416.00 on turnover worth 119.6 million dollars (89.7 million US).

"With a likelihood of reduced interest rates domestically, our dollar's going to remain under pressure for a while and therefore the foreigners are saying we'd better get the money out of New Zealand," said Grant Williamson of Hamilton Hindin Greene.

"Although the market's a little bit negative at the moment, maybe the outlook's not quite as bad as what the market is indicating," Williamson said.

Third-ranked Fletcher Building fell 28 cents to 6.72 dollars to hit its lowest level for three years.

MUMBAI: Indian shares closed 0.4 percent lower, dealers said.

The benchmark Mumbai 30-share Sensex index fell 60.58 points to 15,189.62.

"Aggressive measures to control inflation cannot be ruled out even as oil prices impact fundamentals," said a dealer at brokerage Jamnadas Morarjee.

Annual inflation in Asia's third-largest economy rose to 8.75 percent for the week ended May 31, the highest since February 2001, from 8.24 percent a week earlier.

On Wednesday, the central bank raised a key short-term borrowing rate by a quarter percentage point to 8.0 percent to battle inflation that analysts say appears headed to double-digit levels.