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Asian Shares End Mostly Lower Ahead Of Spanish Auction

4/17/2012 5:26 AM ET

Asian shares fluctuated between gains and losses before closing mostly lower on Tuesday, as surging Spanish borrowing costs prompted investors to exercise caution ahead of an auction of Spanish debt later in the day. Spain auctioned 12-month and 18-month Treasury bills today, while the auction of long-term bonds is slated for Thursday.

Investors look ahead to European Central Bank President Mario Draghi's speech scheduled for later in the day in Frankfurt after an ECB Executive Board member recently said that the central bank still has its bond-buying program as on option. The euro recouped earlier losses against the dollar after French President Nicolas Sarkozy called for a debate on the ECB's role in adopting policies to promote economic growth.

Tokyo stocks ended little changed with a negative bias, tracking losses elsewhere across Asia on renewed concerns about Europe's debt crisis. The benchmark Nikkei average fluctuated between gains and losses before ending down 0.06 percent, while the broader Topis index shed 0.09 percent.

China-sensitive Hitachi Construction Machinery shed 2.1 percent on a weak Chinese economic data while euro-zone exposed Olympus lost 2.3 percent on growing concerns over Spain's sovereign debt outlook. Sony extended its recent losses, falling 2.3 percent to its lowest level since Feb. 2. On the positive side, Toshiba Tec, a unit of Toshiba Corp, jumped 6.9 percent following a Nikkei report that the company will spend around Y70 billion to purchase International Business Machines' point-of-sale terminals business.

Chinese shares fell sharply, with the benchmark Shanghai Composite index losing 0.9 percent, after data from the Ministry of Commerce showed foreign direct investment into China declined for the fifth month in a row in March. China attracted $11.76 billion investment in March, down 6.1 percent from a year ago. In the first quarter, FDI decreased 2.8 percent annually to $29.5 billion.

Hong Kong's Hang Seng index edged down 0.2 percent to end lower for a second straight session, as nervous investors awaited the results of a Spanish bond auction for clues to near-term economic outlook.

Australian shares ended lower, erasing initial gains, as miners retreated on worries about Chinese growth and Rio Tinto offered a lukewarm quarterly production update. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index ended down about 0.3 percent each.

Rio Tinto dropped 0.8 percent after it gave a weaker outlook for copper production for the full year. BHP Billiton shed half a percent and smaller rival Fortescue Metals lost a percent. Gold miner Newcrest slipped 0.4 percent as gold futures edged lower on Tuesday, tracking the euro's weakness ahead of a Spanish debt auction. Uranium miner Energy Resources Australia bucked the downward trend to end 12.7 percent higher on a brokerage upgrade.

Financial shares ended mixed, with ANZ and Westpac losing half a percent each, while Commonwealth ended flat and NAB rose 0.8 percent. Investment bank Macquarie Group added 2.1 percent. The Australian dollar slipped for a third day versus the dollar after the minutes of Reserve Bank of Australia's April 3 meeting revealed that board members have lowered their assessment of growth and indicated chances for further easing. The central bank reaffirmed its position that next week's inflation data would dictate the timing of the next rate cut.

South Korea's Kospi average fell 0.4 percent in thin trading, as mixed economic data from the United States and increasing worries over the outlook for Spain made investors cautious. Energy shares bore the brunt of the selling, with S-Oil falling 2.7 percent and GS Holdings ending 1.7 percent lower.

Samsung Electronics fell 0.8 percent, extending declines for a sixth consecutive session. Chairman Lee Kun-hee today vowed to go "all the way to the end" in lawsuits with his two siblings over vast family fortune, saying he will even take the inheritance battle to the Constitutional Court. Hynix tumbled 3.3 percent and LG Display lost 2.9 percent, after a drop in Apple shares dragged the technology sector lower on Wall Street overnight.

New Zealand shares posted modest gains despite mixed leads from overseas on concerns about the European debt crisis. The benchmark NZX-50 index rose 0.2 percent. Heartland New Zealand led the gainers on the exchange, climbing 7.6 percent, after the would-be bank's most recent quarterly report showed it grew its asset base by $18 million to $2.09 billion in the third quarter.

Fisher & Paykel Appliances, the whiteware manufacturer and exporter, soared 5.7 percent and outdoor clothing and equipment retailer Kathmandu Holdings rallied 3.1 percent, while gold miner OceanaGold paced the declines, falling 3.3 percent. Chorus, Telecom's network arm spun off in November, added 1.8 percent after announcing that it won a government contract to provide faster broadband to rural schools, hospitals and libraries.

India's Sensex was last trading up 1.1 percent, with rate-sensitive realty stocks leading the gainers, after the Reserve Bank of India cut interest rates for the first time in three years. The central bank slashed its repo rate by an unexpected sharp 50 basis points to ease the liquidity crunch in the money markets and support faltering economic growth. A firm trend in European markets on reports of a successful Spanish debt auction, where the nation managed to sell its full target of bonds on offer, also helped buoy investor sentiment to some extent.

Elsewhere, Indonesia's Jakarta Composite index was up 0.3 percent, while Malaysia's KLSE Composite edged down 0.1 percent, Singapore's Straits Times shed 0.3 percent and the Taiwan's Weighted average lost 1.9 percent.

On Wall Street, stocks turned in a mixed performance overnight, as traders reacted to soaring Spanish borrowing costs and mixed U.S. economic data on retail sales, New York manufacturing activity and homebuilder confidence. The Dow ended up 0.6 percent and the S&P 500 ended largely unchanged, while a retreat in the shares of Apple and Google dragged the tech-heavy Nasdaq index down about 0.8 percent.

by RTT Staff Writer

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