Japan Leads Asia Lower

Ivaylo
20 Nov, 2006
New York City

Asian shares finished mostly lower Monday, as regional markets followed sharp declines in Japan, where financial and commodity stocks declined. Japanese shares dropped sharply due to uncertainty over tax breaks for share investments, with financial and commodity stocks as well as oil and machinery issues leading declines. Hong Kong shares closed lower tracking weaker Japanese stocks. South Korean shares also fell, pulled down by banks and auto makers, and profit-taking.

[R]7:30AM Asian markets dropped on Monday as Japanese stocks lost ground.[/R]
Asian markets were mostly lower on Monday. The Nikkei 225 Index in Tokyo dropped 2.3% to finish at 15,725.94. Mizuho Financial Group fell 3.1%, Matsui Securities dropped 8.4% and personal lender Promise declined 6.2%. Oil company Inpex Holdings shed 3.4% and machinery maker Ebara sank 3.7%.

Hong Kong shares ended lower taking their cue from Japan. The Hang Seng Index fell 1.2% to 18,954.63. China Mobile fell 2.7%, even after reporting strong growth in new subscribers in October. HSBC declined 0.9%, continuing falling for the sixth time in seven days due to poor results from its U.S. units. Bucking the trend, Bank of China rose 1.1% and China Construction Bank rose 1% on the bullish view on the mainland banking sector.

The Korea Composite Stock Price Index, or Kospi, also fell 0.7% to 1,402.21. Kookmin Bank declined 0.3% and Korea Exchange Bank, or KEB, lost 1.6%. A weak won hurt exporters such as Hyundai, the largest auto maker by sales in the country, which fell 2.3%. In Shanghai, a stronger currency boosted banking shares. The benchmark Shanghai Composite Index advanced 2.3% to 2,017.28.

Australia S&P/ASX 200 Index declined 1.8% 5,322.40, even as shares in Telstra sold by the government soared on their market debut, with investors lured by the large yield on offer. Taiwan Taipei Weighted Price Index also finished flat at 7,261.48 and Singapore Straits Times Index shed 1.5% to end at 2,771.41.

[R]6:30AM European markets fall Monday on auto, banks and oil shares.[/R]
European markets were lower on Monday. By mid morning, London FTSE 100 lost 0.5% to 6,159, 1.Frankfurt Xetra Dax fell 0.5% to 6,379.62, the CAC 40 in Paris shed 0.8% to 5,397.75.

Decliners

Carmakers were on the decline. Porsche was set to make an offer for its rival Volkswagen but press reports in Germany on Monday, said Porsche did not plan to make a full takeover of VW in spite of building up a 29.9% stake. Volkswagen shares were fell 0.2%, while Porsche fell 1.1 %. Fiat of Italy fell 1.6%, while Peugeot lost 1.4% and domestic rival Renault shed 1.3%.

Total of France down 1%, while Repsol YPF of Spain fell 1% and Royal Dutch Shell, the Anglo-Dutch producer, lost 1%.

ITV of Britian led the media sector lower after investors feared stakebuilding by rival UK broadcaster BSkyB would put off potential bidders. ITV fell 2%, while BSkyB shed 1.5%.

French media group Vivendi fell 0.8% after the company announced that bid talks with Kohlberg Kravis Roberts had ended.

Advancers

RTL Group, the pan-European broadcaster which had been in talks with ITV, gained 0.9.

Stock exchange operator Deutsche Borse rose 2%, getting its boost from takeover speculation after Nasdaq, the US trading platorm, launched a $5.1 billion bid for London Stock Exchange. LSE shares gained 5.7%.

Swiss Re gained 1.8% after the reinsurer said clients had put in the lowest claims in 10 years, while premiums had remained robust.

Oil and gold

Light sweet crude oil for January delivery was down 59 cents to $58.38 a barrel in electronic trading on the NYME. January Brent crude at London ICE Futures exchange was down 68 cents to $58.31 a barrel.

Gold traded at $624.10 an ounce on Monday, up $5.90 an ounce from Friday close of $618.20.

Currencies

The euro traded at $1.2836, from $1.2829 in New York. The yen traded at 151.57 against the euro. It was at 118.08 per dollar from 117.75. Against the dollar, the British pound was at $1.8979 in London, from $1.8946 late on Nov. 17.

[R]5:00AM Gold recovers following energy and currency markets.[/R]
December gold advanced 80 cents to end at $622.50 a troy ounce, after initially trading as low as $614.50. December silver lost 14.5 cents to close at $12.80. January platinum gained $2.80 to finish at $1,192.10 an ounce and December palladium dipped $4.30 to $317.95 an ounce. Most-active December copper settled up 1.65 cents at $3.0575 per pound.

December crude oil lost 45 cents to end at $55.81 a barrel. December heating oil settled down 0.84 cent to $1.6689 a gallon. December gasoline rose 1.15 cent to $1.5411 a gallon. December natural gas gained 42.4 cents to end at $8.179 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed 3.40 cents lower at $1.1310 a pound. March futures of raw sugar in foreign ports also moved 0.18 cent lower at 11.35 cents a pound.