Friday, July 30, 2010

Foreign Market Wrap

Asian stocks were lower Friday as trepidation ahead of fresh growth numbers from the U.S. overcame some bright spots on the earnings front.

Japan's Nikkei 225 Index faded 158.72 points, or 1.6%, to 9,532.30

Hong Kong's Hang Seng Index finally dropped off after eight straight winning sessions, losing 64.01 points, or 0.3%, to 21,029.81.

In Japan, a slew of better-than-expected earnings reports from bellwethers like Sony and Nissan Motor were unable to prop up the Tokyo market, which was leading the region's declines as the yen continued strengthening.

In Tokyo, the yen's strength against the U.S. dollar and the euro overpowered some positive news on the earnings front.

Exporter stocks, which generally move inversely to the yen, were lower: Sharp was off 2.5%, Canon lost 1.2%, and Hitachi fell 2.0%.

Sony Corp. bucked the market, surging 3.5% after it surprised analysts with a rebound to profitability in the fiscal first quarter. The company raised its full-year earnings forecasts, spurred by the strength of its main electronics business.

Nissan Motor had fallen back and was down 0.3% after earlier gaining 1.5%. Japan's second biggest car maker by sales volume swung back into the black in the April-June period, posting a Y106.65 billion net profit.

Panasonic was up 3.8% on dip-buying after Thursday's heavy selloff on dilution fears over its plan to turn subsidiaries Sanyo Electric and Panasonic Electric Works into wholly-owned units.

Shinsei Bank rose 2.7% after it said it swung into the black in the April-June period following a hefty loss in the previous quarter. The bank's first quarter net profit more than doubled to Y13.88 billion from a year earlier, topping even its full-year net profit forecast of Y12.5 billion. Shares were also supported after Shinsei said Thursday that it has no immediate plans to raise capital.

Elpida Memory was down 3.9%. The chip maker swung to a first quarter profit on higher chip prices, but investors were booking gains after the stock had risen around 9% over the past five sessions.

Economic data provided little inspiration. Japan's core consumer price index fell 1.0% from a year earlier in June, compared with a 1.2% drop in May while industrial production and employment data also reinforced the still-soft economic conditions.

In Sydney, Macquarie Group fell 3.5% after it warned profits from its three biggest divisions will fall in fiscal 2011 unless market conditions improve.

AWE shares were down 3.4% after the firm missed its downgraded full year production forecast and acknowledged it is disappointed with the poor results of its offshore New Zealand exploration campaign.

In Hong Kong, Chalco was up 2.5%, bucking a lacklustre market, as investors reacted positively to news its parent, the state-owned Aluminum Corp. of China Ltd. and Rio Tinto sealed a deal on the joint development of an iron-ore project in Guinea. Chalco's shares were up 6.6% in Shanghai.

Cheung Kong Infrastructure and HK Electric were both suspended from trading in Hong Kong. No reasons were immediately given but a person familiar with the situation told Dow Jones Newswires it was likely related to news a consortium led by CKI had agreed to pay GBP5.8 billion for Electricite de France's U.K. electricity distribution networks.

In foreign exchange markets, the U.S. dollar fell to an eight-month low against the yen as falling equities drove investors toward the safe-haven Japanese currency. The euro also slipped against the yen as short-term players pulled out of risk-sensitive assets, said Satoshi Tate, senior foreign exchange dealer at Mizuho Corporate Bank.

The dollar was at Y86.32 against the yen, from Y86.96 late Thursday in New York, while the euro was at Y112.71, from Y113.77. Against the dollar, the euro was fetching $1.3058, from $1.3090 U.S., and down from a 12-week high at $1.3107 U.S. tapped on Thursday on the back of improving euro-zone data.

CHINA

Shares in China were lower, led by profit-taking in heavyweight banks and property developers. Selling pressure increased due to concerns over a glut of banking shares after China Everbright Bank said it will pre-market its CNY20 billion initial public offering next week and debut on the Shanghai board on August 18.

Shanghai's CSI 300 Index fell back 9.13 points, or 0.3%, to 2,868.85.

ICBC was down 1.4% and Agricultural Bank of China lost 1.8%. Developer China Vanke was off 0.8%.

Elsewhere;

Singapore's Straits Times Index slid 9.95 points, or 0.3%, to 2,987.30

Korea's Kospi index shed 11.55 points, or 0.7%, to 1,759.33

Taiwan's Taiex Index stepped back 38.36 points, or 0.5%, to 7,760.63

New Zealand's NZX index picked up 1.61 points to 3,034.62

Australia's S&P/ASX 200 fell off 30.60 points, or 0.7%, to 4,493.