Japan Bucks Asian Downtrend

Ivaylo
04 Jan, 2001
New York City

Asian markets ended mostly lower Thursday, with Japan and China advancing contrary to the general downtrend. In Japan, stocks opened 2007 by hitting an eight-month high in a shortened session on gains in automakers. In China, airlines and resource shares reported strong gains but in Hong Kong the stock market was pushed lower by Chinese financials. A slump in commodity prices and a reversal of strength on the US market pushed the market in Australia down sharply.

[R]7:30 AM Asian markets mostly fell Thursday, Japan, China gain.[/R]
Asian markets finished mostly lower on Thursday. The Nikkei 225 Average finished the day 0.7% higher at 17353.67. Toyota advanced 1.6% and Nissan gained 1.5%, while Fuji Heavy, the maker of Subaru-brand cars, surged 4.7% on a local newspaper report that top shareholder Toyota will supply compact cars for sale in Europe with Subaru badges. Technology stocks also performed well, with Hitachi up 6.1%, Toshiba gaining 2.6%, Mitsubishi Electric advancing 3.9%, and Sony rising 1.8%.

In China, the Shanghai Composite Index rose 1.5% to 2,715.71. Air China soared 9.9%, China Southern Airlines advanced 4.2%. Sinopec, the largest refiner by capacity in Asia, surged 9.9% on higher global oil prices. In Hong Kong, the Hang Seng Index fell 1.9% to 20,025.58. China Construction Bank was off 4.9%, Bank of China lost 3.8%, ICBC sank 4.3%, while Bank of Communications tumbled 8.5% and Ping An plummeted 8.8%.

In South Korea, banks and construction shares led losses in the stock market. The Korea Composite Stock Price Index, or Kospi, shed 0.9% to 1,397.29. Investors worry that tougher mortgage loan rules will impact negatively bank profit margins and damp the property market. Koomin Bank, the largest Korean bank by assets, shed 1.7%, while Hyundai Engineering & Construction was down 2.3%.

In Australia, the S&P/ASX Index 200 declined 1.1% to end at 5,563.90. BHP Billiton fell 4.4% and Rio Tinto shed 4.2% after London Metal Exchange copper declined 4.0% on Wednesday.

[R]6:30 AM Europe declined on Thursday as copper hit commodity exchanges.[/R]
European markets were lower on Thursday. By mid-morning, the U.K. FTSE 100 shed 0.8% to to 6,269.2, Frankfurt Xetra DAX also slid 0.8% to 6,638.72 and CAC 40 in France declined 1% to to 5,557.56.

Decliners

BHP Billiton and Rio Tinto shed more than 3% in London as copper prices plunged further. Antofagasta, the owner of three copper mines in Chile, dipped 3.9%. Steelmakers were also down. Vallourec, the French maker of steel tube, shed 3.4%, Mittal Steel slid 4.2% and ThyssenKrupp of Germany shed 3%.

Oil and gas producers declined on a 4% drop in crude prices overnight. Austrian OMV was down 2.4%, Total in France slipped 1.8%, while Repsol of Spain was 1.5% lower.

Carmakers were hit after sales in US fell last month. Volkswagen AG and DaimlerChrysler AG declined as shares of Volkswagen fell 1.4% and DaimlerChrysler, shed 1%. BMW dropped 1.8%. The biggest luxury carmaker in the world had the recommendation on its stock cut to hold from buy at Citigroup Investment Research.

Advancers

Akzo Nobel NV gained 2.3%. The Dutch chemicals maker announced an initial public offering of its pharmaceutical unit Organon is still the preferred option after a newspaper reported today that the company is in talks with at least two private equity firms about the sale of Organon. Carnival Plc, a cruise-ship operator, gained 2.5% as Morgan Stanley raised its share-price forecast on the stock with 15%.

Oil and gold

Crude oil for February delivery on the New York Mercantile Exchange declined $2.73 from settlement price on Friday to a six-week low of $58.32 a barrel. Gold traded in London at $625.25 per troy ounce, down from $635.25 late Wednesday.

Currencies

The U.S. dollar rose against other major currencies in European trading Thursday morning. The euro traded at $1.3101, down from $1.3165 late Wednesday in New York. The British pound traded at $1.9430, down from $1.9505. The dollar bought 119.37 Japanese yen, up from 119.35.

[R]5:00 AM Gold and silver futures declined Wednesday on stronger US dollar.[/R]
Gold for February delivery ended down $8.20 at $629.80 an ounce on the New York Mercantile Exchange while March silver shed 26.5 cents to close at $12.67 an ounce. The biggest Nymex decliner on Wednesday was copper. The March copper contract hit a low of $2.645 a pound, a level it has not touched since April. January platinum dropped by $6.90 to end at $1,132.40 an ounce while March palladium finished up $3.55 at $342.05 an ounce.

The benchmark contract for crude-oil futures lost more than 4% Wednesday to end at its lowest level in nearly 18 months. Crude for February delivery shed $2.73, or 4.5%, to close the session at $58.35 a barrel on the New York Mercantile Exchange. February heating oil lost 6.01 cents, or 3.7%, to finish at $1.5881 a gallon Wednesday, while natural gas settled 13.6 cents down, or 2.2%, at $6.163 per million British thermal units in Nymex trading.