Asian stocks turned in a mixed performance on Tuesday, as worries over Spain offset optimism over the Greek election results ahead of two key debt auctions by Spain.
Spanish 10-year bond yields hit a record high above the 7 percent mark yesterday and official data revealed that bad loans at Spanish banks rose to an 18-year high in April, rendering underlying investor mood somewhat cautious. Traders also await the forming of a Greek government and the outcome of an upcoming Federal Reserve policy-setting meeting that starts tonight for near-term directional cues.
Commodities edged lower and the euro fell briefly against the greenback after world leaders meeting at a G20 summit in Mexico urged Europe to take "all necessary policy measures" to safeguard the stability of the single currency bloc.
Tokyo stocks fell in thin trading on persistent concerns about Spain's fiscal and banking problems. The Nikkei average shed 0.8 percent while the broader Topix index ended 0.6 percent lower. The strengthening yen hit tech shares and exporters, dragging Honda Motor, Toyota Motor, Canon, Panasonic and TDK down 1-3 percent. Nomura Holdings fell 1.8 percent after the Japanese government excluded the brokerage firm from underwriting a share sale of Japan Tobacco Inc. reportedly worth about $6 billion.
Shares of Kansai Electric Power tumbled 3.3 percent, extending the previous session's loss, despite the announcement for the restart of its No. 3 and No. 4 reactors at its Oi nuclear power plant in Fukui prefecture.
JX Holdings rose 1.3 percent after the government announced plans to begin test drilling for oil and natural gas off the coast of Niigata Prefecture on Japan's western seaboard in April 2013. Sharp Electronics jumped 3.2 percent after Taiwan's Hon Hai Precision Industry Co. said it plans to strengthen its cooperation with Sharp.
China's Shanghai Composite index ended 0.7 percent lower on concerns over tight liquidity conditions ahead of planned new share offerings. Hong Kong's Hang Seng index ended little changed with a negative bias hit by persistent concerns over Spain.
Australian shares fell modestly, with bargain hunting in major banks helping limit the downside to some extent. Among the major banks, Commonwealth, Westpac and NAB rose between 0.1 percent and 0.6 percent, while ANZ lost 0.6 percent. Miners retreated, with BHP Billiton and Rio Tinto losing about half a percent each. The benchmark S&P/ASX 200 index slid about 0.8 percent early in the session before recouping loss to end 0.3 percent lower at 4,123. The broader All Ordinaries index shed 0.4 percent.
Engineering firm Downer EDI fell 1.9 percent despite winning a $71.7 million contract to install power lines and substations at BHP Billiton's Jimblebar iron ore mine in Western Australia's Pilbara region. Media publisher Fairfax plunged 8.5 percent amid speculation that billionaire Gina Rinehart may not increase her 18.67 percent stake in the company.
The Australian dollar went as low as 1.0056 versus its U.S. counterpart before pulling back to end on a flat note after minutes of the Reserve Bank of Australia's June meeting revealed the central bank had cut rates mainly to ease offshore concerns than stimulate domestic borrowing.
Seoul shares ended a range-bound session flat, with the Kospi average rising just 0.06 points to close at 1,892. Investors exercised caution after German Chancellor Angela Merkel said the new Greek government should not be granted additional leeway on the commitments made to international lenders under its EU-IMF bailout deal.
Automaker Hyundai Motor rose 2 percent and components maker Hyundai Mobis added 1.4 percent, while oil refiner SK Innovation fell 1.7 percent. Brent crude futures were down about 0.8 percent in late Asian deals, as an increase in bad Spanish loans fueled fears that the European debt crisis will worsen, further crimping global oil demand.
New Zealand shares rose notably, led by Xero on the eve of its debut in the NZX-50 index. Shares of the cloud-based accounting firm climbed 3.4 percent, helping lift the benchmark index up about 0.7 percent.
Air New Zealand edged up 0.6 percent after its new chief executive said the airline is positioned for growth in spite of tough times facing the industry. Phone company Telecom added 1.8 percent after announcing the establishment of a further NZ$400 million credit line with Westpac New Zealand. Exporter Fisher & Paykel Healthcare lost 2.3 percent before going ex-dividend tomorrow.
India's benchmark Sensex was last trading up 0.9 percent, as bargain hunters stepped in following the previous session's steep sell-off on disappointment over RBI's monetary policy stance. Investors are now pinning hopes that the latest credit rating outlook of India by Fitch will spur some serious government action on policymaking.
Elsewhere, Indonesia's Jakarta Composite index was up half a percent, Malaysia's KLSE Composite gained 0.8 percent and Singapore's Straits Times index was up 0.6 percent, but the Taiwan Weighted average slipped 0.1 percent.
U.S. stocks ended on a mixed note amid lackluster trades overnight, as lingering worries over Europe's debt crisis and caution ahead of the Federal Reserve's monetary policy meeting tempered optimism about Greece's attempts to form a coalition government. The Dow slid 0.2 percent, while the tech-heavy Nasdaq rose 0.8 percent and the S&P 500 edged up 0.1 percent.
by RTT Staff Writer
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