Asian stock markets swung between gains and losses before ending on a mixed note Friday, as investors weighed positive U.S. data on weekly jobless claims and retail sales and a warning from Standard & Poor's that there was at least a 50 percent chance for a downgrade of U.S. government debt. Earlier this week, Moody's Investors Service said it may cut the United States' triple-A debt rating.
Investors also kept a close eye on developments in Europe amid worries about financial contagion engulfing Italy and Spain. Italy's lower house of parliament is due to vote later today on an austerity budget aimed at avoiding the need for an EU rescue passage. The austerity package, which include cuts of €48bn, was approved by the Italian senate yesterday.
Meanwhile, today's publication of the results of the latest stress tests of European banks are expected to show that around 10 banks have insufficient capital to withstand big shocks like a possible Greek debt default.
Commodities extended losses following Thursday's losses, as the dollar rose on safe-haven demand after Fed chairman Ben Bernanke suggested that no additional support is forthcoming.
The Japanese market rose, as a relatively stable yen and solid earnings from Google and JPMorgan Chase encouraged investors to do some cherry picking in beaten-down shares. However, volume remained thin ahead of a three-day holiday weekend in Japan. Besides, investors awaited U.S. industrial output, consumer sentiment and consumer price inflation data scheduled to be released later in the global day for fresh insights into the state of the world's largest economy. The Nikkei average closed up 0.4 percent, while the broader All Topix Index edged up 0.3 percent.
Among exporters, Canon rose 0.9 percent and Sony gained 0.7 percent. Hitachi added 1.9 percent after being selected as a preferred bidder for a nuclear power plant project in Lithuania. Fast Retailing eased 0.7 percent after the company posted its fifth straight drop in quarterly profit. Nintendo fell 2.5 percent after a report by market research firm NPD Group showed that the U.S. video game industry continued to show signs of weakness in June.
China's Shanghai Composite index rose 0.4 percent, with shares of pharmaceutical firms gaining ground after Yu Mingde, chairman of China Pharmaceutical Enterprises Association, reportedly said that China may launch its 12th five-year plan for the biological medicine industry by the end of this month. Beijing Tongrentang climbed 10 percent, Nanjing Pharmaceutical rallied 6.3 percent and Yunnan Baiyao Group moved up 3.3 percent.
Banking stocks also edged higher on expectations of strong first-half earnings. Shenzhen Development Bank rose 2.4 percent and China Minsheng Banking Corp. closed up around a percent. Hong Kong's Hang Seng index closed 0.3 percent lower, with Chinese property developers bearing the brunt of the selling after Beijing announced home ownership curbs.
The Australian market closed modestly lower, weighed down by a weak close on Wall Street overnight on worries about a possible U.S. debt default. Both the S&P/ASX 200 and the All Ordinaries index closed down about 0.4 percent each. BHP Billiton fell 1.6 percent after the world's largest mining company said it would buy U.S shale-gas producer Petrohawk Energy Corp. for $12 billion. Rival Rio Tinto edged up half a percent. Fortescue Metals eased 0.2 percent after the iron ore miner reported a higher-than-expected jump in June quarter costs.
ANZ led the declines in the financial sector, retreating around a percent, while Westpac lost 0.9 percent, NAB slipped 0.3 percent and Commonwealth closed unchanged. In the energy sector, Woodside Petroleum fell 2.2 percent, Oil Search moved down half a percent and Santos closed down 0.2 percent. Retail stocks such as David Jones and JB Hi-Fi closed down around 1.6 percent each. NewsCorp fell 2.8 percent after the FBI announced that it would launch an investigation to find out if News Corp titles hacked into the phones of U.S. citizens.
South Korea's Kospi average closed 0.7 percent higher, with battered technology shares leading the gains on bargain hunting after Google posted a better-than-expected 36 percent surge in second-quarter profit. Hynix Semiconductor rose 1.3 percent, Samsung Electronics posted a modest 0.1 percent gain, LG Display gained 1.3 percent and LG Electronics added 2.6 percent.
After keeping interest rates on hold a day before, the Bank of Korea today downgraded its economic growth forecast for this year, but upwardly revised its inflation outlook. The central bank said consumer prices are likely to rise 4 percent this year, slightly up from the earlier 3.9 percent estimate made in April owing to higher oil and food prices. The growth projection for this year has been lowered to 4.3 percent compared with the 4.5 percent growth estimate in April.
The New Zealand market fell for the ninth consecutive session, after Standard & Poor's warning that it might lower America's credit rating because of the political standoff over lifting the government debt ceiling sapped appetite for riskier assets. The benchmark NZX-50 closed down 0.1 percent. Retail stocks bore the brunt of the selling after the ANZ-Roy Morgan Consumer Confidence survey showed its gauge on consumer confidence slipped by 3.1 points to 109.4 in July compared to the previous month.
Pumpkin Patch, a company specializing in premium children's clothes, lost 2.8 percent, Kathmandu Holdings, the outdoor clothing and equipment retailer, fell 2.7 percent and discount clothing retailer Warehouse Group closed down 2.3 percent. NZX shed 2.1 percent after the Financial Markets Authority said it was eying the market operator's disclosure over its Clear grain exchange. Argosy Property Trust rose 2.4 percent after the trust said that independent directors, Trevor Scott and Peter Brook, have reached an agreement with OnePath New Zealand to buy out the trust's management contract for $20 million.
Elsewhere, India's Sensex was last trading marginally lower, Malaysia's KLSE slipped 0.3 percent and Singapore's Straits Times was little changed, while Indonesia's Jakarta Composite gained 0.6 percent and the Taiwan Weighted added 1.1 percent.
The major U.S. averages fell between 0.4 percent and 0.7 percent overnight due to uncertainty over raising the Federal debt ceiling.
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