Asian stocks turned in a mixed performance on Thursday, with concerns over Europe tempering gains. Cheers over encouraging economic data from the U.S. and Japan gave way to EU summit pessimism as Spain said it cannot finance itself for long at steep borrowing rates. Trading volumes remained light, reflecting doubts about the ability of European Union leaders to deliver concrete measures to tackle the region's debt crisis.
Warning against expectations of "quick" or "easy" solutions to Europe's debt crisis, German Chancellor Angela Merkel accused top EU officials of talking too much on ideas for joint liability before improved controls and structural measures are in place on national budgets and economic policies.
Europe's strongest economy must not be overburdened and countries like Italy and Spain must put the bloc's fundamental problems ahead of pleas for emergency action, she said while addressing members of the the lower house of parliament, the Bundestag. Commodities lost ground and the euro fell broadly
after Merkel left little doubt of her stance at the summit.
Tokyo stocks rose sharply, led by financial and manufacturing shares, although overall trading remained relatively subdued ahead of the key meeting of the European Union. The Nikkei average climbed 1.7 percent to 8,874, its largest single-day gain since June 18 and its highest closing level since May 17, while the broader Topix index jumped 1.8 percent.
Financials led the gainers, with Mitsubishi UFJ Financial Group, Dai-ichi Life and Mizuho Financial Group climbing 3-4 percent. Heavily-weighted auto makers such as Toyota Motor and Honda Motor rose more than 2 percent each and yen-sensitive exporter Tokyo Electron gained 2.2 percent, while TDK and Fast Retailing eased about half a percent each.
Pharmaceutical firm Eisai advanced 3.1 percent after its U.S. partner Arena Pharmaceuticals won Food and Drug Administration approval for a weight-loss pill.
China's Shanghai Composite index lost a percent, extending declines for a seventh straight session on concerns about the health of the domestic economy. Hong Kong's Hang Seng index fell 0.8 percent, erasing early gains, on speculation the EU summit will do little to stem debt contagion through the region.
Australian shares ended little changed with a positive bias, giving up early gains as investors pondered the possible outcomes from the EU summit. The Australian and New Zealand dollars climbed for a third day, hitting four-month highs against the euro, with mounting speculation that China may cut reserve ratio in July underpinning sentiment.
Resource stocks edged higher, with BHP Billiton up 0.4 percent and Rio Tinto rising a modest 0.2 percent. Among the major banks, ANZ, NAB and Westpac fell between 0.2 percent and 0.5 percent, but Commonwealth rose 0.9 percent. Oil and gas producer Santos slumped 5.3 percent as it increased the estimated cost of its Gladstone liquefied natural gas project by 15 percent to $18.5 billion.
News Corp rallied 4 percent after its board approved in principle splitting the $60 billion media giant into separate publishing and entertainment divisions. Fairfax Media fell 2.7 percent after the company decided not to give Gina Rinehart a seat on its board. Building materials supplier Boral tumbled 4.5 percent on brokerage downgrades following its new profit warning.
Seoul shares ended almost flat, with the benchmark Kospi average rising 1.5 points or 0.08 percent to finish at 1,820, as nagging concerns about Europe's debt crisis kept investors in a cautious mood. Shipping companies rose, with Hanjin Shipping Holdings and CJ Korea Express rallying about 2 percent each, buoyed by higher freight rates. Korean Air gained 0.9 percent on reports it is raising airfares for all of its domestic flights.
In economic news, South Korea today cut its economic growth target for this year to 3.3 percent from 3.7 percent growth predicted last December and unveiled plans to boost public spending to prevent its export-oriented economy from being swayed by global economic uncertainties.
New Zealand shares rose, led by Fletcher Building which fell to a fresh three-year low yesterday in reaction to Australian building company Boral's full-year profit downgrade. Shares of the nation's largest construction company rose 2.4 percent and NZ Refining, which tumbled 4.6 percent in the previous session, climbed 3.5 percent, while Guinness Peat Group plunged over 9 percent after losing a crucial appeal in the European Court of Justice on market-fixing. The benchmark NZX-50 index rose 0.4 percent to 3,401.
India's benchmark Sensex was little changed, Indonesia's Jakarta Composite index was losing 1.2 percent, Malaysia's KLSE Composite fell half a percent and the Taiwan Weighted average eased 0.2 percent, but Singapore's Straits Times index was up 0.2 percent.
On Wall Street, stocks saw further upside overnight, adding to the previous session's gains, as traders reacted positively to a batch of relatively upbeat data on durable goods orders and pending home sales. The Dow and the tech-heavy Nasdaq rose about 0.7 percent each, while the S&P 500 added 0.9 percent.
by RTT Staff Writer
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