Asia stocks mostly fall in choppy session

Asia stock markets traded mostly lower Wednesday, as investors digested fresh comments from Chinese Premier Wen Jiabao ahead of key economic releases, while lingering concern about slowing global growth hit export and resource shares.

Japan’s Nikkei Stock Average JP:100000018 -0.49 percent lost 0.4%, while South Korea’s Kospi KR:SEU -0.39 percent and Hong Kong’s Hang Seng Index HK:HSI -0.40 percent each slipped 0.1%.

China’s Shanghai Composite CN:000001 -0.22 percent gained 0.4%, and Australia’s S&P/ASX 200 index AU:XJO -0.14 percent edged up 0.1%.

Chinese Premier Wen Jiabao said Tuesday that the government’s top priority was now stabilising economic growth rather than long-term restructuring, with policies to include business-tax cuts and more targeted investment, according to state-run media reports. Read more on Premier Wen’s comments.

A handful of soft Chinese data releases, including trade numbers which signalled easing domestic demand, have worried investors in the lead-up to Friday’s second-quarter gross domestic product.

Michael McCarthy, chief market strategist at CMC Markets in Sydney, said investors are “outright fearful” about China’s upcoming GDP data.

“The global market is looking for things that could go wrong. China’s trade surplus showed a growth in exports, but we focused on the weaker-than-expected imports,” McCarthy said.

“For the short-term, it means trading remains range-bound,” he said.

Financials were among leading decliners in Hong Kong, with China Construction Bank Corp. HK:939 -2.95 percent CICHY -1.75 percent down 2.4 percent and Agricultural Bank of China Ltd HK:1288 -0.99 percent off by 2%.

In Tokyo, Europe-focused names were pressured, as the euro fell to near the JPY 97 level euro JPY -0.0572 percent against the Japanese yen.

Sony Corp. JP:6758 -3.06 percent SNE -2.60 percent lost 2.7%, Mazda Motor Corp. JP:7261 -1.01 percent MZDAF -8.15 percent dropped 1%, and NEC Corp. JP:6701 -2.68 percent tumbled 3.6%.

Shares of Sharp Corp. JP:6753 -0.83 percent SHCAF -8.93 percent fell 2.2 percent to extend Tuesday losses after announcing a special charge related to a legal settlement.

Auto makers headed lower in Seoul, as Hyundai Motor Co. HYMLY -0.0052 percent dropped 0.8 percent and Kia Motors Corp. shed 0.7%.

Among other notable drops, shares of China Southern Airlines Co. HK:1055 -0.57 percent CN:600029 -2.16 percent ZNH -0.18 percent lost 2 percent in Hong Kong and 1.9 percent in Shanghai after the carrier warned its earnings for the first half of 2012 could come in 50 percent below those of a year earlier. Read more on China Southern profit warnings.

Resources hit

Energy firms suffered following an overnight drop in US benchmark crude futures after the US government cut its expectations for global oil demand.

Tokyo-listed Inpex Corp. JP:1605 -2.01 percent IPXHY +0.07 percent lost 2%, paring strong previous session gains, while Japan Petroleum Exploration Co. JP:1662 -3.49 percent slumped 3.5%.

Woodside Petroleum Ltd AU:WPL -0.52 percent WOPEY -1.75 percent gave up 0.7 percent in Sydney.

Other resource stocks sold-off across Asia after commodity prices eased overnight.

Hong Kong-listed Aluminum Corp. of China Ltd HK:2600 -2.19 percent ACH -3.62 percent lost 2.2%, and China Coal Energy Co. HK:1898 -1.09 percent CCOZY +3.29 percent gave up 1.7%.

Sydney-listed shares of Alumina Ltd AWC -7.99 percent AWCMF +1.03 percent AU:AWC -6.38 percent sank 5 percent after its joint-venture partner Alcoa Inc. AA -4.11 percent took a 4.1 percent hit in US trade.

Still, gains for banking firms lent broader support in Australia. Westpac Banking Corp. AU:WBC +1.14 percent WBK -1.10 percent added 1.2%, and investment bank Macquarie Group Ltd AU:MQG -0.35 percent MQBKY -1.83 percent put on 0.7%.

Europe jitters

The performance in Asia comes after US stocks sank Tuesday, with the Dow Jones Industrial Average DJIA -0.65 percent and the S&P 500 SPX -0.81 percent sealing four-session losing streaks, as earnings warnings from US companies hit sentiment. Read more on the US session.

“We’ve only had a handful of companies report so far, [so] there’s not a lot of evidence to suggest it’s going to be a poor US reporting season, but it’s a great indicator of sentiment at the moment,” McCarthy said.

Stocks on Wall Street have pulled back after a sharp run-up following action by global central banks, and in the wake of the European leaders’ summit last week.

euro-zone uncertainty remained troubling to investors despite the region’s financial officials reaching some agreements at a two-day meeting that ended Tuesday.

“[A] lack of clarity in the follow-up Eurogroup meeting, as well as mixed data globally, has been weighing on investor sentiment, keeping risky assets in check,” strategists at Barclays Capital said. -By Virginia Harrison

http://www.marketwatch.com/story/asia-stocks-sink-with-exporters-weak-2012-07-10?pagenumber=2

 

Category: FinanceAsia