Asian stocks turned in a mixed performance on Thursday as positive sentiment generated from comments by a European policymaker on banking license for the ESM was offset by Moody's rating action on German banks. Moody's downgraded the outlook for 17 German banks and warned on probable downgrades, adding to worries about the eurozone's future.
Disappointing new home sales data out of the U.S. and independent rating agency Egan-Jones's downgrade of Italy's sovereign rating into junk status strengthened expectations concerning central bank stimulus, but markets failed to hold onto the early gains.
Commodities eased and the euro turned weaker against the dollar after an early move as data showed Italian retail sales dropped in May. Investors also shifted their focus to the U.S. weekly jobless claims and durable good orders data due later in the day, as a further deterioration in the economic situation in the U.S. could increase bullish bets that the Federal Reserve is prepared to take additional steps to spur growth and hiring in the world's largest economy.
Japanese shares rebounded from a seven-week low, as investors picked up stocks that announced better-than-expected April-June earnings results. The Nikkei average rose 0.9 percent after falling 1.4 percent the day before, while the broader Topix index ended 1.2 percent higher. Brokerages and banks were among the prominent gainers. China-related Fanuc climbed 5.3 percent and Hitachi Construction Machinery soared 6.2 percent.
Capital-starved Olympus jumped 9.6 percent after medical-equipment provider Terumo Corp. proposed to invest Y50 billion in the company. Nomura Holdings rallied 5.7 percent following news that its CEO will quit, claiming responsibility for leaks on insider information to the clients of its brokerage unit. Rival Daiwa Securities Group advanced 4.7 percent. Canon plunged 7.8 percent as the camera and office equipment maker cut its full-year profit forecast, citing a firmer yen and expectations for weaker growth.
Australian stocks rose as a fall in the nation's inflation rate to a 13-year low opened the door for the central bank to cut interest rates in August. Treasurer Wayne Swan told reporters in Canberra yesterday that the combination of a contractionary federal budget and low inflation gives the Reserve Bank of Australia "maximum flexibility" to lower interest rates further. The benchmark S&P/ASX 200 index rose 0.6 percent and the broader All Ordinaries index ended half a percent higher.
Miners ended mixed, with BHP Billiton rising 0.4 percent, while Rio Tinto lost a percent and Fortescue fell 2.7 percent. Newcrest Mining added a percent despite posting a 15 percent fall in annual gold output. Among the big four banks, ANZ and NAB ended little changed with a positive bias, wile Westpac rose 0.7 percent and ANZ gained a percent.
Qantas Airways jumped almost 10 percent after the airline said it was in talks with a number of ailines, including Dubai's flagship carrier Emirates, for potential alliances. Caltex shares rose 1.4 percent on news that it will shut down its Kurnell refinery in Sydney that will see at least 330 job cuts.
Seoul shares rose on bargain hunting by institutional investors after recent losses. The benchmark Kospi average fluctuated in a narrow range before ending up 13 points or 0.7 percent at 1,782. Hyundai Motor, South Korea's largest automaker, rose 1.6 percent, as it posted a 10 percent rise in second-quarter net profit, matching expectations.
LG Chem, the country's largest chemicals maker, rallied 3.6 percent and chipmaker Samsung Electronics added 1.2 percent, while LG Electronics soared 6.6 percent on robust earnings. In the financial sector, KB Financial Group closed up 2.4 percent after its board decided not to bid for 56.97 percent stakes in Woori Finance Holdings.
In economic news, South Korea's economy expanded 0.4 percent in the second quarter of 2012 compared to the previous three months, according to advance estimates by the Bank of Korea. That was slightly below expectations for an increase of 0.5 percent following the 0.9 percent gain in the first quarter.
New Zealand shares rose notably after the New Zealand Reserve Bank left interest rates at a record low, saying it is watching the region for any signs of deterioration amid market fears over the eurozone financial crisis. The benchmark NZX-50 index rose 0.8 percent.
Among the prominent gainers, Fletcher Building, the nation's largest construction company, rose 2.3 percent, Telecom, the biggest company on the exchange, edged up 0.2 percent and cloud-based accounting firm Xero soared over 5 percent. The Wellington-based company told shareholders at their annual meeting that it now has 100,000 paying customers, up from 45,000 last year. Gold miner OceanaGold rallied 2.9 percent after providing an update on the Philippine government's reform of the mining sector.
Elsewhere, China's Shanghai Composite index fell about half a percent, India's benchmark Sensex was down 1.3 percent and the Taiwan Weighted average slid 0.1 percent, while Hong Kong's Hang Seng index edged up marginally, Singapore's Straits Times index rose half a percent and Indonesia's Jakarta Composite index edged up 0.1 percent.
On Wall Street, stocks ended the session on opposite sides of the unchanged line overnight as disappointing news from Apple was offset by upbeat results from blue chips such as Caterpillar and Boeing. In economic news, the Commerce Department released a report showing an unexpected drop in new home sales in June. The Dow rose half a percent, while the tech-heavy Nasdaq slid 0.3 percent and the S&P 500 edged down less than a tenth of a percent.
by RTT Staff Writer
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