Japan Ends Lower, South Korea Higher

Ivaylo
12 Oct, 2006
New York City

South Korea led the advance as investors pursued LG.Philips LCD, Hanjin Shipping and other blue chips. South Korean retail investors were back to the stock market, lifting the benchmark index. Japan dipped as banking and pharmaceutical shares showed weakness. In Hong Kong, shares ended almost flat, while Australia, Taiwan and Shanghai slipped. In Australia, shares closed lower on Thursday in spite of acquisition talk in several sectors.

[R]6:30AM Asian markets close mixed Thursday, Japan falls, S. Korea rises.[/R]
Asian markets closed mixed on Thursday. The Nikkei 225 Average finished the day 0.19% lower at 16368.81. Stocks declined, led by banking shares, as Sumitomo Trust & Banking fell 4.6% after Goldman Sachs downgraded the stock to sell from neutral. Mitsubishi UFJ, Japan largest bank by assets, shed 1.5%.

Pharmaceutical stocks also fell, with Astellas Pharma losing 2.5%. Taisho Pharmaceutical plunged 7.8% after the company revised down its earnings guidance for the second time this fiscal year.

The Hang Seng Index in Hong Kong ended 0.06% higher at 17873.09. China Construction Bank advanced 2.3%, and Bank of Communications rose 0.7%, after advancing 4.8% in the previous two sessions. Bank of China gained 1.5%.

South Korea Kospi Index gained 0.47% to 1331.78, while Shanghai Composite Index closed 0.7% lower at 1778.18. Korean Air climbed 3.7%, while rival Kosdaq-listed Asiana Airlines gained 1.6% on a continued decline in oil prices. Hyundai Engineering & Construction advanced 4.3%, and Daewoo Engineering & Construction closed up 4.1%.

In China, declines in defense-related firms, after recent gains, helped pull the benchmark stock index down. Aircraft engine manufacturer Sichuan Chengfa Aero-Science & Technology plunged 10%, satellite developer China Spacesat also lost 10% and spacecraft developer Harbin Fenghua-Aerospace Hi-tech slid 9%.

Taiwan sank 0.32% to 6984.58 and Australia S&P/ASX 200 dipped 0.44% to close at 5259.40. Advancers in Australia were led by Promina after rival Suncorp-Metway came with a 7.87 billion Australian dollars ($5.85 billion) offer to buy the home insurer, Promina, which shares rose 13%.

[R]6:30AM European stocks advance early Thursday on M&A deals.[/R]
European markets were higher by mid morning on Thursday. The FTSE 100 in London climbed 0.3% to 6,088.4, Frankfurt Xetra Dax rose 0.2% to 6,130.55, and the CAC 40 in Paris added 0.4% to 5,334.42.

Advancers

Scania shares rose 9.6% following its statement that its third-quarter net income rose 55%, reflecting substantially higher volumes. Deliveries rose to 14,959 from 12,226 a year ago. Shares in MAN shares gained 3.3%. STMicroelectronics also gained 2%.

Volvo, the domestic rival of Scania, added 2.9%. French technology company Thomson gained 4.5% after it said that its third-quarter core revenue rose 10% to 1.4 billion euros.

Decliners

Supermarket company, Carrefour SA, said third-quarter sales rose 7.3% at a constant exchange rate to 22.1 billion euros. The company shares sank 2.1% after rising sharply prior to the results.

Volkswagen, the single biggest shareholder in Scania, was flat, its gains restricted by a generally sluggish auto sector and Peugeot declined as Goldman Sachs cut its recommendation on the stock from neutral to sell. Peugeot shares fell 2.2%.

Other news

German EU harmonised inflation slowed to its lowest rate in more than two years and a half in September largely due to a sharp fall in oil prices, the Federal Statistics Office announced on Thursday.

Oil and gold

Oil prices advanced Thursday after hitting their lowest level this year in the previous session as market participants awaited the release of a weekly U.S. petroleum supply report. Light, sweet crude oil for November delivery rose 26 cents to $57.85 a barrel on the NYME.

Gold opened Thursday at a bid price of $574.70 a troy ounce, down from $576.00 late Wednesday.

Currencies

The euro against the U.S. dollar. The European currency rose to $1.2532, from $1.2521. The dollar was trading at 119.56 yen by mid-afternoon in Tokyo, down from 119.69 yen from late Wednesday in New York. Against the dollar, the British pound was at $1.8560 at 10:28 a.m. in London, from $1.8569 late yesterday.

[R]5:00AM Gold prices rose Wednesday but ended below $580 an ounce.[/R]
December gold rose by 30 cents to close at $576.50 an ounce on the NYME. Other metals followed gold lead higher on Nymex, with the exception of platinum, which January contract fell by $2.90 to close at $1,072.80 an ounce. December silver futures ended up 11 cents at $11.33 an ounce, December palladium added $7.35 to end at $308.95 an ounce and December copper put on 3.2 cents to close at $3.41 a pound.

The front-month November crude oil contract dropped 93 cents lower at $57.59 a barrel, after falling as low as $57.48, the lowest point in 2006. November heating oil settled down 0.89 cent to $1.6720 a gallon. November unleaded gasoline shed 1.65 cents to $1.4503 a gallon. October natural gas finished down 31.6 cents at $6.150 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures advanced 0.20 cent at $1.0305 a pound and March gained 0.20 cent to $1.07 a pound. Futures on raw sugar in foreign ports for March declined 0.52 cent at 11.09 cents a pound while May slipped 0.46 cent to 11.30 cents a pound.