Asian stocks fell broadly on Thursday, with Japanese and Chinese shares bearing the brunt of the selling as investors locked in some profits following recent sharp gains. Focus remained firmly on Europe after Spanish and Italian government bond yields reached two-month highs yesterday on reports former Prime Minister Silvio Berlusconi narrowed the gap in polls with frontrunner Pier Luigi Bersani to just 3.7 percent after his tax rebate promise. Investors also awaited the outcome of central bank meetings in Europe and a two-day Brussels summit starting later today for directional cues.
The ECB is widely expected to keep interest rates on hold, but investors wait to hear what President Mario Draghi will say amid political jitters in Spain and Italy and the euro's sharp rise recently.
Tokyo stocks fell sharply on profit taking after the Nikkei index jumped 3.8 percent to a 52-month high on Wednesday. Weak earnings from heavyweights Nikon and Yamaha also dented investor sentiment, dragging the benchmark index down 0.9 percent, while the broader Topix index closed up 0.04 percent. Nikon plunged 19 percent and Yamaha shares tumbled nearly 16 percent after both companies slashed their full fiscal year operating profit forecasts. Nikon rival Canon, which reported a slight decline in fourth-quarter profit last week, fell 3.1 percent.
Among the prominent gainers, Mazda Motor soared 12 percent after the company more than doubled its full-year profit forecast, citing a weaker yen and cost reductions. Nippon Paper rallied 13.5 percent and Mitsui Fudosan added 3 percent on robust earnings. Financials Mizuho Financial Group and Nomura Holdings rose 3-4 percent on hopes the new BOJ governor will embark on aggressive easing.
China's Shanghai Composite index fell 0.7 percent on profit taking after gaining more than 20 percent since December. Meanwhile, China's central bank signaled that it would pay special attention to inflation, as it sees rising risks to domestic prices from global liquidity and labor shortage. An economic recovery together with demand growth as well as surging capital inflows will raise consumer prices in a faster manner, the central bank noted in its fourth-quarter monetary policy report.
Hong Kong's Hang Seng index edged down 0.3 percent as investors cut their positions ahead of the long Chinese Lunar Year Holiday next week.
Australian shares rose after National Australia Bank reported higher earnings and employment data failed to signal improvement, boosting the prospects of further interest rate cuts next month. The benchmark S&P/ASX 200 and the broader All Ordinaries index rose about 0.3 percent each. NAB rallied 1.9 percent after it reported a 4 percent rise in first-quarter cash earnings on the back of rising revenues and lower charges for bad debts. ANZ added 1.8 percent and Commonwealth edged up 0.1 percent, but Westpac shed 0.6 percent.
Global miner BHP Billiton added 0.4 percent, Rio Tinto advanced 0.9 percent and smaller rival Fortescue Metals Group rallied 1.5 percent. Telstra rose 1.3 percent after the nation's largest phone company reported higher earnings and said it was on track to meet its full-year growth targets. Rupert Murdoch's media firm News Corp. tumbled 3.2 percent after cutting its forecast for annual profit.
Australia's jobless rate held steady at 5.4 percent in January, data released by the Australian Bureau of Statistics revealed, defying expectations of a small rise to 5.5 percent. However, the participation rate missed forecasts and the number of full-time jobs declined by 9,800, boosting scope for an interest rate cut. A separate survey showed continued contraction in the construction sector in January.
Seoul shares fell for a sixth consecutive session, with the prolonged currency volatility and downbeat retail sales data weighing on sentiment. The benchmark Kospi average slid 0.2 percent to a two-and-a-half month low in relatively light trading. State-run electric utility KEPCO tumbled 3.5 percent, while tech shares LG Display and LG Electronics rose half a percent and 2 percent, respectively.
New Zealand shares fell as trading resumed following the Waitangi Day holiday. The benchmark NZX-50 eased 0.4 percent. Heavyweight Telecom declined 2.1 percent on concerns the stock is trading in overbought territory. Fletcher Building, the nation's largest construction company, shed 0.8 percent, while clothing retailer Pumpkin Patch and cloud-based accounting software firm Xero fell about 3 percent each.
Xero said that it added more than 23,000 customers to its client list since December and is on track to double last year's $19.3 million in annual revenue. In economic news, government data showed that the nation's unemployment rate slipped to 6.9 percent in the fourth quarter from a 13-year high, due to the decline in the labor force participation rate.
Elsewhere, the Taiwan stock market was closed through February 18 for the Lunar New Year holidays. India's benchmark Sensex was down half a percent and Singapore's Straits Times index shed 0.6 percent, while Indonesia's Jakarta Composite index was up 0.1 percent and Malaysia's KLSE Composite index rose 0.3 percent.
U.S. stocks ended a lackluster session on a flat note overnight, as traders seemed reluctant to make any significant moves following recent run-up and amid a lack of major U.S. economic data. Corporate earnings beat analysts' estimates, helping limit the downside to some extent. The Dow and the S&P 500 inched up marginally, but the tech-heavy Nasdaq edged down 0.1 percent.
by RTT Staff Writer
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