News Column

Asian Stocks Mixed On Wall Street Cues

July 8, 2014

CANBERA (Alliance News) - Asian shares turned in a mixed performance on Tuesday, tracking weak leads from offshore markets as investors digested weaker-than-expected German industrial production data and waited for minutes from the US Federal Reserve's June policy meeting for fresh clues on the direction of US interest rates.

Japanese shares fell modestly, with a stronger yen and a weak lead from Wall Street hurting sentiment. The yen firmed up against other major currencies as data showed the nation's trade deficit shrank and current account surplus rose more than expected in May. The benchmark Nikkei average fell 0.42% to 15,314.41, while the broader Topix index shed 0.3%.

Market heavyweight Fast Retailing dropped 1.1%, brokerage Nomura Holdings lost 2% and insurer T&D Holdings fell 3%. Panasonic Corp. slid half a percent on a report it will outsource production of system chips to Intel, aiming to shift away from consumer electronics. Casio Computer soared 7.5% after announcing a share buyback.

Japan posted a current account surplus of 522.8 billion yen in May, the Ministry of Finance said - remaining in the black for the fourth straight month. The headline figure topped forecasts for a surplus of 429.9 billion yen. Exports grew 2.0% year-over-year to 5.718 trillion yen, while imports eased 0.4% to 6.394 trillion yen. Separately, overall bank lending in Japan rose 2.3% in June from a year earlier, beating forecasts for a 2.2% rise, central bank data showed.

Chinese stocks posted modest gains, with utilities rallying after Datang International Power Generation Co. unveiled plans to restructure its coal-to-chemical business. The benchmark Shanghai Composite index ended a choppy session up 0.2% at 2,064.02.

Hong Kong'sHang Seng index ended virtually unchanged at 23,541.38 ahead of Chinese inflation and trade figures due in the next two days.

Australian shares fell for a second consecutive session, as metal and oil prices dropped and investors awaited cues from the US earnings season, with results from aluminum giant Alcoa due after the market close. The benchmark S&P/ASX 200 index eased 0.2% to 5,510.9, while the broader All Ordinaries index slipped 0.1%. BHP Billiton eased 0.2% and Fortescue Metals Group lost 2%, while Rio Tinto edged up 0.2%.

In the banking sector, NAB, Westpac and ANZ fell between 0.4% and 0.8%. Energy stocks also drifted lower after both Brent and US crude futures fell to their lowest levels in a month on Monday on expectations that Libya will soon boost its crude exports. Woodside Petroleum dropped 0.7% and Oil Search shed 0.6%.

On the economic front, a survey by the National Australia Bank showed that Australian business confidence improved in June, although conditions remained sub-trend. The NAB business confidence index increased to 8 in June from 7 in May despite the government's challenging new budget. The business conditions index increased to 2 in June from -1 in May, ending the negative trend that started in the beginning of the year.

Seoul shares ended on a flat note as investors avoided big bets ahead of the earnings season. The benchmark Kospi average closed up 0.08% at 2,006.66 after falling to as low as 1,997.87 earlier in the day. Tech giant Samsung Electronics closed up 0.2% after the company said it expects second quarter operating profit of 7.20 trillion won, down nearly 25% from 9.53 trillion won in the year-ago period, hit by slowing smartphone sales and a strong won.

The South Korean won eased for a third consecutive session after Finance Minister nominee Choi Kyung-hwan said downside risks confronting the economy are getting serious.

New Zealand shares lost ground as investors braced for new listings and the upcoming earnings season. The benchmark NZX-50 dropped 0.39% to 5,166.08, with 28 of its components retreating. Among the prominent decliners, New Zealand Oil & Gas, Air New Zealand and Xero all fell about 2% each. Building products maker Steel & Tube Holdings paced the gainers, rising 2.3% to USD3.07.

In economic releases, New Zealand business confidence dropped sharply in the second quarter as expansion moderated from multi-decade highs, a survey showed. A net 33% of businesses were optimistic in the June quarter, down from a net 51% in the first quarter, according to the New Zealand Institute of Economic Research'sQuarterly Survey of Business Opinion.

Elsewhere, India's Sensex was down 1.1% on profit taking as investors took some profits off the table following recent sharp gains. Singapore's Straits Times index was moving down 0.1%, while Indonesia's Jakarta Composite index was gaining 0.6%, Malaysian shares were marginally higher and the Taiwan Weighted average edged up 0.1%. Taiwan's exports grew 1.2% in June from a year earlier, missing economists' estimates, official data showed.

US stocks fell overnight as investors looked ahead to the earnings season and pondered what a labor market recovery would mean for monetary policy. Trading activity remained somewhat subdued following the long holiday weekend. The Dow slipped 0.3%, the tech-heavy Nasdaq shed 0.8% and the S&P 500 dropped 0.4%.

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Source: Alliance News

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