Asian stocks turned in a mixed performance on Thursday as traders looked ahead to more economic data out of the United States for cues as to whether the Fed has room to ease policy further. The July housing starts report and the August Philadelphia Federal Reserve's manufacturing index will be released later today, which will provide some clues on the Fed's stance concerning QE3.
Investors are pinning hopes on action from the U.S. Federal Reserve next month after consumer price data released overnight came in flat for the third time in four months, as a small drop in energy costs offset price increases in food and other items. The Fed signaled more easing steps at its July meeting, saying it was ready to act if growth and hiring stays weak and inflation is in check.
Stocks rose broadly across Asia early in the session after Chinese Premier Wen Jiabao said easing inflation provides room to adjust monetary policy in the world's second-largest economy. With July data showing a further slowdown in domestic economic activity, dovish comments from Wen raised expectations that the People's Bank of China would either cut banks' reserve requirement ratio or lower benchmark interest rates to boost lending and spur growth.
However, markets gave up some early gains late in the session following a mostly negative European session and a weaker euro after global growth engine China warned its trade outlook was worsening.
Tokyo stocks rallied, with the Nikkei average climbing 1.9 percent to a six-week high above the 9,000 mark, as the yen weakened and stronger-than-expected U.S. retail sales and industrial production data spurred a surge in demand for blue-chip exporters and high-tech shares. The broader Topix index gained 1.6 percent.
Toyota Motor, Mazda Motor, Canon and Komatsu all closed up about 3 percent each, while Sony climbed 4 percent. Hitachi soared 5.6 percent, boosted by a weighting increase in the indices, while Tokio Marine Holdings and Mitsui Fudoson rose over 3 percent each. Central Japan Railway lost 1.8 percent and Shikoku Electric slid 0.6 percent following weighing changes expected to take effect after the August 31 market close.
China's Shanghai Composite index fell 0.3 percent, reflecting concerns about slowing domestic growth after a commerce ministry spokesman said export conditions will likely worsen in the second half. China attracted $7.58 billion of foreign direct investment in July, down 8.7 percent year-over-year and sharply lower than $12.0 billion in June, data released by the Ministry of Commerce showed.
Hong Kong's Hang Seng index fell half a percent, extending losses for a second straight session, as Chinese FDI figures pointed to worsening trade outlook for the second half of 2012.
Australian shares rose notably, with shares of Wesfarmers hitting a 15-month high after the conglomerate reported an 11 percent rise in annual profit, led by strong earnings performance from its supermarket chain Coles. Wesfarmer climbed 3.8 percent, while Myer, Woolworths and Harvey Norman rose between 0.6 percent and 1.5 percent. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index rose about 1.1 percent each.
AMP jumped 4.8 percent to 3-1/2 month high after the fund manager posted an 8 percent rise in first-half underlying net profit despite weaker investment markets. Banks NAB, ANZ, Commonwealth and Westpac gained 1-2 percent. Resources stocks had a mixed outing, with BHP Billiton edging up 0.8 percent, while Rio Tinto slipped 0.6 percent after it called for a "pragmatic" approach to capital spending on African projects. Fortescue Metals retreated 1.9 percent, but gold miner Newcrest rose half a percent.
Property group Dexus fell 2.5 percent after posting a 67 percent slump in full-year profit. Brambles recovered early losses to end 0.8 percent higher after the firm posted a 21 percent rise in annual profit and said it expects continued revenue growth in the year ahead.
Seoul shares ended almost unchanged, with the benchmark Kospi average rising just 0.05 percent as investors moved to the sidelines awaiting further clues as to the likelihood of additional stimulus measures from major central banks. Foreign investors extended their buying streak for 8th consecutive session, purchasing shares worth 353.1 billion won on a net basis, helping keep underlying mood positive to some extent.
Shares of Hanwha Corp tumbled 2.6 percent after a South Korean court jailed the head of the conglomerate on charges of breach of trust. E-Mart fell 3.4 percent after Moody's Investor Service warned its performance will remain sluggish over the next 12-18 months.
New Zealand shares lost ground, with Goodman Fielder leading the decliners after the company played down media reports that it has received a takeover offer from the world's largest palm oil processor, Wilmar International. Shares of the Australian food ingredients manufacturer slumped 4.1 percent, dragging the benchmark NZX-50 index down about 0.4 percent.
Telecom, the largest listed company on the exchange, fell 2.8 percent, Fletcher Building, the nation's largest construction company, slid 0.9 percent and online auction site Trade Me declined half a percent, while children's clothing chain Pumpkin Patch soared 13.2 percent after upgrading its earnings outlook.
SkyCity rose 2.8 percent after the casino and hotels operator reported an 8 percent rise in annual profit, meeting guidance. Carpet maker Cavalier rallied 3 percent as it launched a new backing material made of recycled wool carpets which it claims is a world first.
Elsewhere, India's benchmark Sensex was last trading down 0.4 percent and Malaysia's KLSE Composite slid 0.2 percent, while Indonesia's Jakarta Composite index rose half a percent, Singapore's Straits Times index edged up marginally and the Taiwan Weighted average added 0.3 percent.
On Wall Street, stocks turned in another lackluster performance overnight, extending the sideways move seen over the past week, with a mixed batch of economic data on regional manufacturing, industrial production, homebuilder confidence and consumer prices weighing on the markets. The Dow and the S&P 500 ended narrowly mixed, while the tech-heavy Nasdaq rose half a percent.
by RTT Staff Writer
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