Japan Falls, China Gains

Ivaylo
24 Oct, 2006
New York City

The Nikkei 225 fell on Tuesday as shares of of NTT DoCoMo and KDDI both plunged on worries that a nearing price war could hurt profits. The Composite Index in Shanghai jumped due to new share buying after investors got refunds from the strongly oversubscribed offering to the Industrial & Commercial Bank of China. Hong Kong, South Korea and taiwan all advanced, but Australia dipped as mining stocks declined.

[R]7:30AM Asian markets closed mixed, Japan slips, China advances.[/R]
Asian markets ended mixed on Tuesday. The Nikkei 225 Index ended 0.1% lower at 16780.47. Softbank fell 1.1% as the company announced a cut in tariffs and added that it would other incentives in a bid to compete more effectively with its two larger rivals. DoCoMo shares fell 2.13%, and shares of KDDI, Japan second biggest cellular operator, shed 7.1%. Sony, due to report its earnings on Thursday, ended 1.3% higher. Consumer electronics company Matsushita Electric rose 0.6%. Shares of Honda erased earlier gains to close higher 0.2% ahead of its quarterly earnings report Wednesday.

In Hong Kong, the Hang Seng Index ended 0.4% higher at 18153.41, while the China Enterprises Index gained 0.6% to 7496.38. Trading in Hong Kong was range-bound with investors cautious ahead of the Federal Reserve meeting later this week. The Shanghai Composite Index closed 2.6% higher at 1805.18, its highest settlement since Sept. 21, 2001. Strong institutional demand gave large capitalized companies a boost.

South Korean stocks finished flat, as weak technology stocks hurt solid U.S. cues and strong gains by construction shares. The Korea Composite Stock Price Index, or Kospi, rose 0.1% to 1366.50. Construction shares continued to advanced amid local news reports that the government intends to develop two districts near Seoul as residential towns to stabilize surging property prices. Hyundai Engineering & Construction advanced 1.1% and Daewoo Engineering & Construction gained 1.8%.

Australia S&P/ASX 200 retreated from earlier gains to closed 0.3% lower as mining shares tracked declines in oil and copper prices. Shares of BHP Billiton lost 0.5% after the mining group reported weaker-than-expected quarterly results. The Weighted Price Index in Taiwan finished higher 0.8%. Markets in Malaysia, Singapore and Indonesia were closed for holidays.

[R]6:30AM European stocks decline Tuesday on weak oil and mining stocks.[/R]
European markets were lower by mid morning on Tuesday. The FTSE 100 in London was flat at 6,167.0, Frankfurt Xetra Dax lost 0.2% at 6,229.44, the CAC 40 in Paris slipped 0.4% to 5,392.92.

Advancers

Neste Oil outperformed in a generally flat oil sector, after reporting a 67% growth in third-quarter operating profit, easily beating market expectations thanks to a strong diesel market, the company stated. Shares in the Finnish refiner rallied 3.8%.

Banks gave some support to the markets, with gains for Erste Bank of Austria after Merrill Lynch upgraded the stock. Other high growth companies in the sector also performed well. Raiffeisen rose 1.2%, while Allied Irish Banks rose 2%.

Decliners

Other stocks in the energy sector, however, were falling as crude prices undermined most shares. Norsk Hydro fell 1.8% , after it reported a smaller-than-expected 18% rise in third-quarter operating profit. Statoil shed 0.6%.

London-listed miners were on the decrease too, as precious and base metals prices also retreated, while BHP Billiton announced quarterly copper output had fallen. BHP shares fell 2.5% and Anglo American shed 2.5%.

Oil and gold

Crude oil futures edged down Tuesday in electronic trading, as bargain-hunting trimmed earlier losses sparked by softening supply concerns. December contract on the NYME traded at $58.70 a barrel, down 11 cents from Monday.

Gold traded in London at $578.40 bid per troy ounce, down from $584.20 late Monday.

Currencies

The U.S. dollar was mostly higher against other major currencies in European trading Tuesday morning. The euro was quoted at $1.2540, down from $1.2546 late Monday in New York. The British pound traded at $1.8699, up from $1.8649. The dollar traded at 119.51 Japanese yen, up from 119.30.

[R]5:00AM Gold futures plunged due to stronger dollar and weaker oil.[/R]
December gold lost $13.50 to settle at $582.90 a troy ounce on the NYME. December silver sank 29.5 cents to end at $11.67 an ounce. January platinum fell $7.70 to $1,074.40 an ounce and December palladium fell $9.15 to $321.35 an ounce. The most-active December copper settled down 1.10 cent at $3.4510 a pound.

Light, sweet crude oil for December delivery dipped 52 cents to finish at $58.81 a barrel, near the middle of its trading range. November heating oil settled down 1.1 cent at $1.6690 a gallon. November unleaded gasoline slipped 0.43 cent to close at $1.4715 a gallon. November natural gas settled down 36.0 cents at $6.881 per million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed 4.80 cents higher at $1.0685 a pound, with March up 4.70 cents at $1.1070. Futures on raw sugar in foreign ports for March advanced 0.09 cent to settle at 11.80 cents a pound.