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Asian Shares End Mostly Lower On Greek Deadlock

5/14/2012 6:02 AM ET

Asian shares swung between gains and losses before ending mostly lower on Monday, as concerns over political uncertainty in Europe partially offset the positive sentiment generated by a weekend move by China's central bank to cut banks' reserve requirement ratio for commercial banks by 50 basis points, effective from May 18.

Greece's political impasse continued as Syriza party leader Alexis Tsipras insisted that his party will not participate in coalition negotiations with other Greek political parties that back earlier deals reached with the troika of international creditors.

Separately, exit polls showed that German Chancellor Angela Merkel's conservatives suffered a crushing defeat in the nation's most populous State, North Rhine-Westphalia, further underscoring growing backlash against deficit-cutting austerity and policies to promote growth.

Japanese shares finished moderately higher, as solid earnings reports from companies such as NTT and a report that the government is eager to restart some of Japan's idled nuclear reactors in the coming months lifted sentiment. Both the Nikkei average and the broader Topix index of all First Section issues on the Tokyo Stock Exchange finished up about 0.2 percent each.

China-related shares saw some buying, with Komatsu gaining marginally, while Fanuc advanced 1.8 percent after the People's Bank of China announced a 50 basis point cut in banks' reserve requirement ratio over the weekend to stimulate economic growth. Kansai Electric Power soared 5.6 percent after the assembly of Oi town, Fukui Prefecture decided to support the restart of two idled reactors at the utility's nuclear power plant.

Takeda Pharmaceutical tumbled 3.2 percent after it forecast a 40 percent fall in operating profit for the year ending March 2013. Casio Computer also fell 3.2 percent after the maker of watches and calculators issued weak guidance. Nissan Motor fell 2 percent after it forecast a 28.2 percent rise in operating profit for the fiscal year 2012.

China's Shanghai Composite shed 0.6 percent on growth concerns, with banks pacing the declines hit by weaker-than-expected credit data for April. The move by China's central bank to cut banks' reserve ratio on Saturday was largely anticipated in the wake of last week's disappointing economic data. Hong Kong's Hang Seng index ended 1.2 percent lower.

Australian shares ended a choppy session slightly higher, with gains in financials underpinning broader strength. The benchmark S&P/ASX 200 rose 0.3 percent, while the broader All Ordinaries index gained 0.2 percent. Meanwhile, the political uncertainty in debt-hobbled Europe and lingering concerns over slowing growth in China, Australia's biggest trading partner, sent the Aussie dollar below parity to the U.S. dollar for the first time in five months.

Global miner BHP Billiton edged up 0.3 percent, while Rio Tinto ended little changed, coming off multi-month lows. Fertilizer and explosives maker Incitec Pivot rose 0.3 percent after the company said it is focused on boosting overseas earnings.

Commonwealth Bank led the gainers among banks, rising 1.9 percent, while ANZ gained 0.7 percent and NAB added a percent. Westpac fell 2.9 percent on going ex-dividend. Insurer QBE rose 1.7 percent, Telstra, Australia's biggest phone company, gained 1.1 percent and retailers such as Harvey Norman, JB Hi-Fi and Myer Holdings rose 1-2 percent.

South Korea's Kospi average fell to a four-month intraday low before ending 0.2 percent lower at 1,914, as persisting European financial uncertainties sapped investor risk appetite. Shipbuilders bore the brunt of the selling, with Hyundai Heavy Industries and Samsung Heavy Industries falling over a percent each, while heavyweight Samsung Electronics rose 0.8 percent, snapping a seven-day slide and Hyundai Motors, the nation's largest automaker, added a percent.

New Zealand shares rose, led by Fletcher Building on optimism a weaker Australian dollar will help improve demand for building products in its second-largest market. Shares of Fletcher rose 2.3 percent, while the benchmark NZX-50 index gained 0.2 percent. Telecom added 1.5 percent after the phone company said it will conduct live customer trials of Long Term Evolution mobile technology later this year in preparation for its shift towards 4G capability.

Retailers turned in a mixed performance after government data showed New Zealand Core retail sales fell 1.5 percent in the first quarter from a quarter earlier in seasonally adjusted terms. Warehouse Group, the biggest listed retailer, and clothing chain retailer Pumpkin Patch rose around 1.1 percent each, but jeweler Michael Hill International lost 0.9 percent.

Infratil ended down half a percent ahead of its annual results tomorrow. Gold miner Oceanagold slumped 5 percent to its lowest level since August last year after gold lost some of its sheen last week due to renewed concerns over a worsening European debt crisis.

India's benchmark Sensex was last trading down half a percent after government data showed India's headline inflation accelerated to 7.23 percent in April, making it difficult for the RBI to moderate monetary policy.

Elsewhere, Indonesia's Jakarta Composite index was down 1.5 percent, Malaysia's KLSE Composite fell 0.6 percent, Singapore's Straits Times index lost 0.7 percent and the Taiwan Weighted average edged down 0.3 percent.

On Wall Street, stocks ended a choppy session lower on Friday, with troubling news from JP Morgan and worries over Greece contributing to the weakness. The negative sentiment was partly offset by a report from Reuters and University of Michigan which showed an unexpected rise in consumer sentiment index to a four-year high in May. The Dow and the S&P 500 edged down around 0.3 percent each, while the tech-heavy Nasdaq edged up marginally.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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