Asia Declines

Ivaylo
08 Nov, 2006
New York City

Domestic stocks in Tokyo fell following comments on Tuesday that the the central bank may lift the rates again after it raised a key interest rate in July for the first time in six years, lifting it to 0.25% from virtually zero. Investors in Japan were also cautious as they eyed U.S. Congressional election results. Hong Kong shares tumbled, breaking a six-session rally, on rumors that telecom giant China Mobile plans to sell shares. New Zealand bucked the trend, endind at record closing high.

[R]7:30AM Asian stocks end broadly lower, Japan falls on interest rates talks.[/R]
Asian markets finished broadly lower on Wednesday. The Nikkei 225 Index closed the session 1.1% lower at 16215.74. Mizuho Financial Group shed 2.7%, while shares of Softbank plunged 4.1% ahead of its earnings report due after the market close. Consumer-finance company Aiful, falling more than 7% after reporting weak financial results, finished down 1%. Shares of Canon fell 0.8%, while Nikon slipped 2.6%.

Toyota Motor jumped 1.8%, after the leading auto maker by sales in Japan posted strong profit growth for the fiscal first-half, raised its full-year profit outlook. Also in the auto sector, Honda Motor gained 0.5%.

Indexes in Hong Kong and Australia paused from record-breaking streaks, with Hang Seng Index in Hong Kong down 0.7% at 18807.35 as investors booked profits on China Mobile and other large-cap stocks that have led the recent rally. China Mobile fell 2.5%, its second day of loses. Property stocks remained in demand a day after the leading banks slashed interest rates by a quarter percentage point and blue-chip Henderson Land rose 1.5%. Mainland refiner Sinopec rose 0.4% on softer crude-oil prices and continuing speculation it will be added to the Hang Seng Index when results of quarterly index review are announced Friday.

Australia S&P/ASX 200 fell 0.6% to 5459.20, after setting highs for three straight sessions as investors worried about higher interest rates. BHP Billiton fell 1.5%, while oil and gas producer Woodside Petroleum fell 0.9%. Australian-listed shares of Singapore Telecommunications jumped 4.9% after reporting a better-than-expected 19% rise in quarterly profit.

The Kospi index in South Korea fell 0.5% to 1380.07. In Seoul, the construction sector declined 3.5%, although a rise in heavy technology stocks limited losses. Technology stocks posted gains, with Samsung Electronics advancing 1%, helped by a recent rise in technology shares in the U.S. New Zealand shares ended at record closing high for the second day in a row, as the benchmark NZX-50 Index added 0.2% to 3818.25.

[R]6:30AM European stocks fall in early trading Wednesday on US election results.[/R]
European markets were lower on Wednesday. By mid morning, the FTSE 100 in London lost 0.3% to 6,222.3, Frankfurt Xetra Dax shed 0.4% to 6,338.43, and the CAC 40 in Paris was down 0.4% to 5,417.95.

Advancers

Shares in European defense company and Airbus owner EADS advanced 2.1% in Paris after it confirmed it expects to reach sales of well above 37 billion euros in 2006. German retailer KarstadtQuelle rose 2.8% after the firm said its third-quarter profit before interest, taxes, depreciation and amortization fell 51.4% to 57.4 million euros.

Peugeot rose 1.5% after finding a replacement to Jean-Martin Folz, who already had said he is quitting.

Decliners

BHP Billiton shed 2.2%, while Xstrata lost 1.9%. Hypo Real Estate led the decline after its third-quarter results failed to beat expectations, despite a 25% rise in net profit. The shares fell 3.4%.

Truckmaker Scania declined too after German rival MAN appeared less likely to succeed in its bid for the Swedish company. Shares of Scania, which carry the majority of the voting rights, fell 2.9%.

Volkswagen, the biggest shareholder of Scania, was down 1.7% after Bernd Pischetsrieder, chief executive, unexpectedly announced his departure at the end of the year.

Oil and gold

Crude oil rose on trader and analyst speculation that U.S. heating oil inventories will drop with winter approaching in the Northern Hemisphere. Crude oil for December delivery advanced as much as 37 cents, or 0.6%, to $59.30 a barrel in after-hours electronic trading on the NYME. Brent crude oil for December settlement rose 25 cents to $58.73 a barrel on the London-based ICE Futures exchange.

Gold was trading in London at a $625.50 bid per troy ounce, down from $625.75 on Tuesday

Currencies

The U.S. dollar was lower against other major currencies in European trading Wednesday. The euro was quoted at $1.2792, up from $1.2771 Tuesday. The British pound was quoted at $1.9074, up from $1.9055. The dollar bought 117.55 Japanese yen, down from 117.68.

[R]5:00AM Gold and silver futures close nearly flat on Election Day.[/R]
December gold lost 20 cents to end at $627.70 a troy ounce on the NYME. December silver declined 8.5 cents to finish at $12.675 an ounce. January platinum futures settled $4.40 lower at $1,192.30 while December palladium moved $1.40 lower at $334.30 an ounce. December copper gained 2.85 cents to close at $3.3655 per pound.

December crude oil futures slipped $1.09 to end at $58.93 a barrel. December heating oil settled down 3.81 cents to $1.6803 a gallon. December unleaded gasoline declined 0.49 cent to $1.5241 a gallon. December natural gas settled up 26.5 cents at $7.755 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed 0.25 cent lower at $1.1295 a pound, with May down 0.20 cent at $1.1705. Futures on raw sugar in foreign ports for March settled 0.17 cent lower at 11.58 cents a pound.