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Asian Shares End Mixed On Growth Concerns

3/22/2012 5:42 AM ET

Asian shares ended on a mixed note on Thursday as weak U.S. housing data, concerns about Spain's slow progress in boosting its finances and lingering worries about China's economic growth weighed on investor risk appetite.

Commodities eased, with copper declining around 1.7 percent and crude futures falling more than a percent to below $106 a barrel, after the HSBC flash purchasing managers index for China showed the nation's manufacturing activity shrank for a fifth successive month in March amid a combination of sluggish export orders and softening domestic demand.

However, Japanese shares rose, supported by bargain hunting in export-linked companies such as automakers and high-technology manufacturers following a decline the day before. Both the Nikkei average and the broader Topix index of all First Section issues on the Tokyo Stock Exchange gained about 0.4 percent each. Heavyweight Softbank, video game console maker Nintendo and automaker Nissan Motors led the gainers, while China-related stocks such as Fanuc and Hitachi Construction Machinery lost ground.

Shares of Sumitomo Mitsui Trust Holdings rose 2.2 percent after Japan's securities regulator recommended a 50000 yen fine against its unit Chuo Mitsui Asset Trust and Banking for alleged insider trading. Nomura Holdings lost 1.3 percent, extending the previous session's 4.1 percent slump, on allegation it was involved in an insider-trading case connected to Inpex Corp.'s 2010 equity offering.

In economic news, data released today before the market open showed a surprise merchandise trade surplus of 32.921 billion yen for Japan in February, down an annual 94.8 percent, but moving into the black for the first time in five months. The headline figure was well above forecasts for a deficit of 120 billion yen following the downwardly revised shortfall of 1.476 trillion yen in January.

China's Shanghai Composite index edged down 0.1 percent as the negative sentiment in the wake of weak manufacturing data was offset by mounting expectations for a further easing of monetary policy. Hong Kong's Hang Seng index ended 0.2 percent higher.

China's manufacturing sector activity shrank for a fifth consecutive month in the month, as output suffered a pullback due to weakening domestic demand in the world's second-largest economy, a survey by Markit Economics revealed. The headline flash HSBC/Markit manufacturing purchasing managers' index fell to 48.1 in March from 49.6 in February, with a PMI reading below 50 indicating contraction of the sector

Australian shares rose modestly, with gains in financials helping key indexes end in positive territory despite mixed leads from both Wall Street and Europe overnight. The benchmark S&P/ASX 200 rose about half a percent and the broader All Ordinaries index ended up 0.4 percent.

The big four banks - ANZ, Westpac, National Australia Bank and Commonwealth -rose between 0.8 percent and 1.2 percent. Reserve Bank of Australia assistant governor Guy Debelle said in a speech in Sydney that the major lenders lifted interest rates in February in order to maintain their net interest margins amid higher lending costs.

Resource stocks closed on a mixed note after mining companies warned that any further cuts to the tax breaks subsidizing diesel fuel in May's federal budget could reduce output. BHP Billiton and smaller rival Fortescue rose around 0.3 percent each, while Rio Tinto lost a percent. Gold miner Newcrest added 2 percent.

South Korea's Kospi average ended a range-bound session largely unchanged with a negative bias, as a lack of directional cues from overseas markets and caution ahead of the nuclear security summit in Seoul next Monday and Tuesday kept investors on the sidelines. Shipbuilders and energy companies paced the declines on concerns about slowing economic growth in the world's second largest economy.

Chipmakers Samsung Electronics and Hynix Semiconductor rose 1.3 percent and 1.6 percent, respectively, on brokerage upgrades on expectations that price gains in computer-memory chips will accelerate from the second quarter.

New Zealand shares fell, dragging the benchmark NZX-50 index down about 0.2 percent to a seven-day low after the nation's GDP growth numbers missed estimates. The New Zealand economy grew 0.3 percent in the fourth quarter of 2012 compared to the previous three months, Statistics New Zealand said. That missed forecasts for an increase of 0.6 percent following the downwardly revised gain of 0.7 percent in the third quarter. On a yearly basis, GDP rose 1.8 percent - again shy of estimates for a gain of 2.2 percent following the 1.9 percent gain in the previous three months.

Telecom, which shed its dividend this week, lost 1.2 percent, Chorus that split from Telecom late last year shed 1.7 percent and Sky City Entertainment fell 1.8 percent. Refiner New Zealand Refining tumbled 4.9 percent, Children's clothing retailer Pumpkin Patch declined 2.9 percent and Rakon, which has manufacturing facilities in China, ended 2 percent lower.

Fletcher Building, the nation's largest construction company, gained 0.9 percent after the GDP report showed construction activity rose 1.5 percent in the fourth quarter due to pick up in residential and commercial building work.

Indian shares were down sharply, with benchmark Sensex losing 1.8 percent after the government declined to react on a Comptroller and Auditor General's report that has reportedly pegged a Rs 10.7 lakh crore loss to the exchequer due to coal allocations between 2004 and 2009.

A partial rollback in rail fare hike announced last week in the Rail Budget and weak European cues following the release of weaker-than-expected German manufacturing and services PMI data also spooked investors.

Elsewhere, Indonesia's Jakarta Composite index rose 0.1 percent, Malaysia's KLSE Composite edged up marginally and the Taiwan Weighted average added a percent, while Singapore's Straits Times shed 0.9 percent.

On Wall Street, stocks moved in a choppy manner before ending the session mixed overnight, as traders cashed in on the recent gains believing that the markets need to consolidate before they can see any further upside. A weaker-than-expected report on existing home sales also weighed on investor sentiment. The Nasdaq inched up less than a tenth of a percent, while the Dow slipped 0.4 percent and the S&P 500 edged down 0.2 percent.

by RTT Staff Writer

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