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Asian Shares Mixed After Soft US Data

3/19/2012 6:06 AM ET

Asian shares ended on a mixed note on Monday as lower-than-expected consumer-sentiment and industrial-production data from the United States tempered optimism about growth in the world's largest economy. While signs of growing stability in the euro zone helped eased sovereign debt worries, investors are sitting on the sidelines awaiting a string of U.S. housing data later in the week for further clarity on global growth outlook.

Measures taken to fight financial woes in Europe and the U.S. are starting to pay off, but the optimism must not lull us into a false sense of security, chief of the International Monetary Fund Christine Lagarde warned Sunday.

Crude futures erased early gains, copper eased and the yen reversed early losses against the euro and dollar as investors sought further evidence of economic recovery before investing additional money into riskier assets. Investors also eye New York Federal Reserve president William Dudley's speech tonight and Fed chairman Ben Bernanke tomorrow for further clues about the course of U.S. monetary policy.

Japanese shares rose for a fifth consecutive session as the yen continued its retreat from record highs against the dollar, bolstering earnings prospects for exporters. However, export-linked shares ended mostly lower on profit taking following recent gains, with Honda Motor, Canon and Sony losing between 0.6 percent and one percent.

The Nikkei average rose 0.1 percent to 10,142, its highest since March 11, 2011, led by financials on optimism over the stability of the global financial system. Sumitomo Mitsui Financial Group rose 1.3 percent, Resona Holdings advanced 1.5 percent and Mizuho Financial added 2.1 percent. The broader Topix index of all the Tokyo Stock Exchange First Section issues gained 0.2 percent.

Trading house Marubeni jumped 2.4 percent on a Nikkei report that it is in talks to buy major British wind engineering firm Seajacks International for $850 million. Construction machinery maker Komatsu rallied 2.9 percent and heavily weighted industrial robot maker Fanuc added 2 percent. Kansai Electric Power slumped 4.2 percent in the wake of reports that the city of Osaka, the company's largest shareholder, will propose that the utility decommission all of its nuclear reactors as soon as possible.

China's Shanghai Composite index edged up 0.2 percent, led by major rare earth producers, buoyed by signs of further consolidation in the sector. Major property developers including China Vanke and Poly Real Estate lost ground after data showed average property prices in 70 Chinese cities covered in a government survey fell for a fifth consecutive month in February. Hong Kong's Hang Seng index lost a percent, dragged down by Chinese banks on worries about slowing loan growth.

Australian shares edged higher, with miners leading the gainers, despite the expected Senate passing of the mineral resources rent tax legislation tonight. Sentiment was also boosted after Lagarde said that the world economy has stepped back from the brink of danger and economic indicators are beginning to look a little more upbeat, including in the United States.

The benchmark S&P/ASX 200 rose 0.3 percent and the broader All Ordinaries index added 0.4 percent. Among the major miners, BHP Billiton and Rio Tinto rose around 1.1 percent each, while Fortescue jumped nearly 3 percent.

In the financial sector, Commonwealth, ANZ and NAB rose between 0.1 percent and 0.4 percent, while NAB edged down modestly. Ten Network Holdings rose 2.4 percent after the media company said it is considering selling its outdoor advertising business Eye Corp. Shares in David Jones were placed in a trading halt due to speculation about the retailer's results. Insurance Group Australia added 1.8 percent on saying that it plans to raise about A$350 million via a hybrid share offering.

Seoul's Kospi average gained 0.6 percent as optimism that the global economy is on a path to recovery boosted large-cap exporters and financial shares. Samsung Electronics rose 1.8 percent to a record high on expectations that it will have a solid first-quarter, primarily driven by smartphone sales. Woori Finance Holdings gained 1.9 percent, extending its winning streak for the fifth day on hopes of a renewed privatization push. Shares of Hana Financial Group ended 1.6 percent higher while those of Korea Exchange Bank added 1.4 percent.

Builders like GS Construction and Daelim Industrial jumped 4-7 percent on expectations that they may win more orders from the Middle East. Hyundai Motor, South Korea's largest automaker, rose half a percent, while shares of its affiliate Kia Motor fell 1.4 percent on news that it would suspend production at its U.S. plant on Monday and Tuesday reportedly due to an early morning blaze at a Kia supplier plant.

New Zealand shares fell for a second day, with the benchmark NZX-50 easing half a percent from a nine-month high reached last week, as caution prevailed ahead of current account deficit and GDP data due out this week. Construction materials supplier Steel & Tube Holdings tumbled 4.4 percent, utility Contact Energy fell 2.9 percent,exporter Fisher & Paykel Healthcare declined 2.1 percent, national Air New Zealand lost 1.7 percent and Fletcher Building, the nation's largest construction company, shed 1.6 percent, while New Zealand Oil & Gas rose 1.3 percent, benefiting from rising oil prices.

In economic news, New Zealand consumer confidence rose in the first three months of the year, but people are still concerned about the outlook for the next five years, a private survey showed. The Westpac McDermott Miller Consumer Confidence Index rose 1.1 points to 102.4 after tumbling to 101.3 in the fourth quarter, which was the lowest since 2009.

India's benchmark was last trading down 1.2 percent on apprehensions whether the government will rein in spending and bring down fiscal deficit to 5.1 percent as announced in this year's Budget. Also weighing on sentiment to some extent, government data released today indicated an acceleration in prices in February, with the headline retail index based on the Consumer Price Index rising to 8.83 percent from 7.65 percent in the previous month.

Elsewhere, Indonesia's Jakarta Composite index was down 0.1 percent, Singapore's Straits Times shed 0.7 percent and the Taiwan Weighted average edged down 0.1 percent, while Malaysia''s KLSE Composite index rose 0.1 percent.

On Wall Street, stocks ended largely unchanged on Friday as traders seemed reluctant to make any significant moves following the recent rally, which has driven the major averages to multi-year highs.

On the macroeconomic front, data showed that U.S. consumer prices rose the most in 10 months in February, driven mostly by higher gasoline prices, while industrial production was unchanged and consumer sentiment dipped in early March. The S&P 500 edged up 0.1 percent, but the Dow slid 0.2 percent and the tech-heavy Nasdaq edged down 1.1 points or less than a tenth of a percent.

by RTT Staff Writer

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