Japan Slips, Shanghai Keeps Rising

Ivaylo
23 Jan, 2001
New York City

Asian stocks finished mixed as Japan declined slightly on overnight drops on U.S. markets. Hong Kong ended flat while Shanghai extended its recent gains. In Japan, sentiment was impacted negatively as growing concerns in U.S. over technology companies led investors to pull money out of the market. In Hong Kong, developers pushed the index lower. South Korea fell as LG Electronics dipped. Shanghai closed higher on expectations that Industrial Bank will post big gains.

[R]7:30 AM Asian markets finish mixed Tuesday with Japan down and HK flat.[/R]
Asian markets closed mixed on Tuesday. The Nikkei 225 Index in Japan ended 0.09% lower at 17,408.57. Among the decliners were Advantest, which fell 0.81% and TDK, which shed 0.91%. Mitsubishi Estate slipped 0.88% and Nomura Holdings closed down 0.63%.

The Hong Kong Hang Seng Index edged 0.01% lower to 20,769.70. Real estate companies led the decline. Henderson Land Development fell 3.5% and Sun Hung Kai Properties dropped 2%. China Mobile, the second biggest large-cap by market capitalization, helped offset losses by rising 2.5%. Shanghai benchmark index advanced 0.5% to 2,949.14. Shanghai Pudong Development Bank soared 10%, the daily limit, China Minsheng Banking surged 10% and Hua Xia Bank also rose 10%.

The Korea Composite Stock Price Index, or Kospi, closed down 0.02% at 1,363.09. LG Electronics settled down 0.9% after jumping nearly 2% during the session, hurt by worse-than-expected Q4 earnings. Oil refiner SK Corp sank 3.4% after the company reported a weaker-than-expected fourth-quarter operating profit.

[R]6:30 AM European shares advanced on strong banks, miners and oil stocks.[/R]
European markets were higher Tuesday. In early trade, the FTSE 100 in London added 0.2% to 6,229.7, Frankfurt Xetra Dax was flat at 6,690.61, and the CAC 40 in Paris was fractionally higher at 5,583.53.

Advancers

Swatch, the biggest watchmaker in the world, continued the rally, up 1.7% after Credit Suisse reiterated its outperform rating and raised its price target. Oil groups made gains as crude prices held near the $53-a-barrel level. British BP added 0.6%, while Spanish Cepsa gained 0.7%.

Credit Suisse, the Swiss investment bank, gained 1% after it said on Monday it was to initiate a $6.4 billion share buyback programme and ruled out any major acquisitions. Austrian banks benefited from the sentiment. Raiffeisen, upgraded by both Morgan Stanley and Fox-Pitt, Kelton on Monday, gained a further 1.2%. Erste Bank gained 1.2% after an upgrade from Czech brokerage Wood & Company.

SAP gained 1.7% after Morgan Stanley lifted its rating from equal weight to overweight and lifted its price target. L’Oreal climbed 1.6% after JPMorgan raised its recommendation from neutral to overweight.

Decliners

Alcatel-Lucent plunged 9.9% after warning of a decline in Q4 earnings. Adjusted proforma sales for Q4 of 2006 stood at around 4.42 billion euros, compared with 5.25 billion euros last year.

Sugar company Tate & Lyle shares declined 15.1% in London after it announced that a lower-than-expected contribution from its sucralose product, Splenda, means that its fiscal-year profit is likely to be lower than market expectations.

Luxury goods retailer Richemont shed 3% after recent gains. Van der Moolen dropped 0.7% after it announced that it will immediately reduce around 30% of its U.S. work force as the NYSE completes its move to its hybrid trading system.

Oil and gold

Crude oil rose on higher demand for heating oil in the U.S. and Europe amid colder weather. Crude oil for March delivery rose as much as 73 cents, or 1.4%, to $53.31 a barrel, in after-hours electronic trading on the New York Mercantile Exchange. Brent crude for March gained as much as 70 cents, or 1.3%, to $53.40 a barrel in electronic trading on the ICE Futures exchange in London.

Gold traded in London at $637.50 per troy ounce, down from $638.70 late Monday. In Zurich, gold traded at $635.30, down from $637.10.

Currencies

The dollar fell against other major currencies in European trading Tuesday. The euro traded at $1.3012, up from $1.2954 late Monday. The British pound rose to $1.9858, up from $1.9764. The dollar bought 121.40 Japanese yen, down from 121.61.

[R]5:00 AM Gold declined Monday on profit-taking and weak oil futures.[/R]
Most-active February gold lost $2.30 to end at $634.10 a troy ounce on the New York Mercantile Exchange while the most active March silver gained 8 cents to finish at $13 an ounce. April platinum slipped $3.40 to close at $1,165.10 an ounce after touching a session high of $1,174.80. March palladium settled up $1.80 at $346.70 an ounce.

The front-month February crude oil contract dipped 86 cents to end at $51.13 a barrel. February heating oil declined 0.51 cent to emd at $1.5084 a gallon. Front-month gasoline settled down 2.26 cents at $1.3754 a gallon. Front-month February natural gas futures advanced 43.3 cents to stop at $7.319 a million British thermal units.

On the New York Board of Trade, the March Arabica coffee futures contract declined 2.35 cents to end at $1.1735 a pound, while May fell 2.35 cents to $1.2055. Futures on raw sugar in foreign ports for May closed up 0.10 cent at 11.06 cents.