Bangkok: Asian markets were mixed on Monday as Japanese stocks inched higher and Hong Kong shares sank amid concerns about further tightening measures in mainland China.
Australian shares also fell on Monday, led by Australia and New Zealand Banking Group Ltd (ANZ) after the lender said it expects earnings this fiscal year to be crimped by fallout from the global credit crunch.
But Chinese stocks jumped after the securities regulator’s approval of two new equities funds and wealth management operations of nine mutual funds.
In Tokyo, the benchmark Nikkei 225 index rose 12.84 points, or 0.09%, to 13,635.40 as traders bought steel issues after they agreed to a 65% hike in iron ore prices with their supplier in Brazil. Traders said many investors are hoping that rising demand in emerging markets will offset the higher prices. Nippon Steel Corp. rose 3.2% and JFE Holdings Inc. added 6.3%.
Toshiba Corp. jumped 5.7% on reports it may withdraw from its struggling high definition digital video disc (HD DVD) business. Investors cheered the likely decision as lessening the potential damage in losses in the HD DVD operations. Rival Sony Corp., which supports Blu-ray Disc technology, rose 1%.
Market observers say that it may take a while for the Nikkei to resume a stable upward trend even though current levels are higher than the January lows.
“What seems to be a recovery is merely a technical rebound,” said Seiichiro Iwasawa, chief strategist at Nomura Securities Co. Ltd. “Remember that the Nikkei has rebounded a few times since a huge dip in August last year, and this is like one of them.”
Hong Kong’s blue-chip Hang Seng Index dropped 389.18 points, or 1.61%, to 23,759.25 points. It had gained 6.8% over the previous four sessions.
Analysts said traders were cautious due to continued concerns about the American economy. US markets were closed on Monday for a holiday, but the Dow Jones Industrial Average slid 0.23% on Friday.
“Most investors are taking a wait-and-see stance, given the sluggish trading volume,” Castor Pang, a strategist at Sun Hung Kai Financial, said.
The market expects the Federal Reserve to cut interest rates again at its next meeting in March. Hong Kong banks tend to follow US interest rate cuts because the Hong Kong dollar is pegged to its US counterpart.
Li Ka-shing’s property flagship, Cheung Kong Holdings, fell 1% after gaining 8% in the past four sessions.
Investors were turning their focus to China, which was expected to release January consumer price data on Tuesday. Analysts expect prices have risen 7%, which would be an 11-year high.
They are worried that signs of surging inflation will trigger another round of tightening measures by Beijing.
But on the Chinese mainland, investors were enthused by a report on Monday from the state-run China Securities Journal that nine domestic mutual fund companies have received regulatory approvals to begin wealth management operations.
“More money will mean prices of stocks will be pushed up, and some investors are buying ahead of the wave,” said Huatai Securities Co. Ltd analyst Zhou Lin.
The benchmark Shanghai Composite Index gained 71.02 points, or 1.6%, to 4,568.15. China’s Daqin Railway Co. Ltd rose 4.7% and Poly Real Estate Group Co. Ltd gained 3.5%.
In Australia, shares fell Monday, led by ANZ after the lender said it expects earnings this fiscal year to be crimped by fallout from the global credit crunch.
The benchmark S&P/ASX 200 index closed down 48.2 points, or 0.9%, to 5,558.4 points.
“The banks were thrashed quite mercilessly,” said Bill Bishop, a private client adviser at ABN Amro Morgans Ltd in Sydney.
“The market is being skittish because it doesn’t know what the banks’ unannounced exposure is overseas and is worried about their exposure to local companies such as Allco Finance Group, Centro Properties Group and MFS Ltd,” he said.
Shares in ANZ, the nation’s third largest lender, fell 6.1% percent after it said it may face an A$200 million (Rs722 crore) hit on its exposure to a US debt insurer ACA Capital Holdings Inc.
Elsewhere, markets in South Korea and Taiwan rose, while shares in India, Thailand, Indonesia and Malaysia fell.
In currencies, the dollar bought 107.82 yen midafternoon Monday, up from 107.69 yen late Friday in New York. The euro rose to $1.47 (Rs58.36) from $1.4678.