Semiconductors Hurt Japan

Ivaylo
19 Oct, 2006
New York City

Asian stocks traded mixed Thursday, with the Nikkei in Japan declining on poorresults from chip-equipment makers such as Advantest Corp, while shares of Nissan Motor Co. lost ground after the automaker announced a global recall affecting 130,000 vehicles. Hong Kong also fell, as well as Taiwan, South Korea ended flat, while Singapore bucked the trend and advanced.

[R]7:30AM Asian markets end mixed, Japan falls on chip-makers.[/R]
Asian maarkets were mostly lower on Thursday. The Nikkei 225 Stock Average shed 0.6% to 16551.36, following a 0.25% increase the previous day. Sony declined 0.4%. as it revised its guidance down, due to the fallout from its laptop battery recalls just after the market closed. Advantest dipped 4.4%, pulled down by an overnight slump on the tech-heavy Philadelphia Semiconductor Sector Index in the US. Nissan shares fell as much as 1.5% after the company said it has begun recalling more than 130,000 vehicles to repair an ignition key defect.

Hang Seng Index in Hong Kong fell 0.34% to 17986.97. The China Enterprises Index ended little changed at 7,440.32. Shares of Cathay Pacific Airways advanced 2.3%, buoyed by softening crude-oil prices.

The Kospi in South Korea ended flat at 1354.06, Taiwan shares fell 0.3% to 6995.83. The Straits Times index in Singapore bucked the trend, gaining 0.64% to 2659.37. Australia S&P/ASX 200 swung from early gains to end down 0.5%. Shares of Woodside Petroleum shed 2.6% after the company reported a 28% jump in production for the third quarter from a year earlier but warned its may struggle to meet full-year production targets.

[R]6:30AM Earnings and U.S.-inspired profit-taking lower stocks in Europe.[/R]
European markets were lower by mid-morning on Thursday. The U.K. FTSE 100 index sank 0.5% to 6,123.30, the French CAC-40 index was 0.5% lower at 5,336.49, and the German DAX Xetra 30 index declined 0.4% to 6,157.06.

Advancers

Metrovacesa, the Spanish property group led the advancers. Amid bid speculation, the shares were up 3.8%, extending a gain of 8.7% on Wednesday. The increase over the past month has been over 50%.

Shares in Atos surged 19% amid talk of a potential buyout by Blackstone. Ericsson was up 1.1%, reversing pre-open losses, as the mobile network equipment maker produced earnings that shaded analyst expectations.

Fiat, Italian car maker was up 2.6% after it hit a four and a half year high on Wednesday. Akzo Nobel bounced back, up 2.7% after taking a plunge on Wednesday when the Dutch pharmaceutical group warned of a delay to the launch of its anti-schizophrenia drug, asenapine.

Some financial stocks also faired well. Banco Popular gained of 2.1%, after its third quarter earnings just beat expectations, despite the fact that Goldman Sachs downgraded the bank to sell from neutral.

Decliners

Shares in SAP dropped 2.4% after the company reported a cautious outlook despite beating quarterly forecasts. German semiconductor company Infineon fell 1.8% as its US rival AMD noted compressed profit margins. Safran declined 1.6%, reversing a 5.7% gain on Wednesday.

The food and beverage sector were one of the biggest decliners in early trading, after Nestle shares shed 1.4% after a recent strong performance.

Oil and gold

Oil prices gained Thursday as traders awaited the outcome of a meeting of the OPEC to discuss a possible reduction in production to prop up prices. Light, sweet crude oil for November delivery rose 29 cents to $57.94 a barrel in on the NYME. Brent crude for December delivery on London ICE Futures exchange rose 34 cents to $59.92 a barrel.

Gold opened Thursday at a bid price of $588.80 a troy ounce, down from $592.80 late Wednesday.

Currencies

The euro recouped Thursday against the U.S. dollar ahead of new U.S. economic data that could offer more direction. The euro bought $1.2555 in morning European trading, up from $1.2533 in New York late Wednesday. The British pound rose to $1.8719 from $1.8675. The dollar declined to 118.53 Japanese yen from 118.92 yen.

[R]5:00AM Gold and silver were little changed as traders awaited OPEC decision.[/R]
December gold declined 90 cents at $592.60 a troy ounce on the NYME, while December silver added 4 cents to $11.82. December palladium recorded the biggest gain of the precious metals on a relative basis, advancing $12.90 at $332.50 an ounce. The contract peaked at $337.40, its strongest level since Sept. 11. January platinum gained $10.10 to end at $1,093.10 an ounce. The most-active December copper contract was unchanged at $3.4960 per pound.

November light, sweet crude oil slipped $1.28 to close at $57.65 a barrel. November heating oil settled down 3.79 cents at $1.6959 a gallon. November unleaded gasoline fell 0.7 cent to $1.4703 a gallon. November natural gas rose 36.5 cents to end at $6.807 a million British thermal units.

On the New York Board of Trade, December Arabica coffee closed 0.20 cent lower at $1.0225 a pound, with March down 0.15 cent at $1.0625. Futures on raw sugar in foreign ports for March sank 0.99 cent to finish at 11.59 cents a pound