Asian equities mixed as euphoria fades

Markets in the region put in mixed performances on Tuesday as optimism about the global economic outlook was tempered by disappointing corporate earnings.

In Tokyo, the Nikkei 225 Average pared an early advance to end just 0.2 per cent higher at 10,375.01.

The broader Topix index also gained 0.2 per cent to 959.02, extending its positive run to 13 consecutive sessions.

There was disappointment at earnings from Japan’s smaller carmakers.

Suzuki’s shares dropped 5 per cent to Y2,300 after it acknowledged that its cost- cutting efforts could not counter the negative effect from dwindling sales and exchange rate fluctuations.

Similarly, Yamaha’s shares dropped 9.9 per cent to Y1,096 after the motorbike maker widened sharply its loss forecast for the year to December from Y42bn to Y182bn due to sluggish demand in the US and Europe. The company said it saw no sign of recovery in those regions.

Japan Steel Works also weighed on the broader market after it said its net income dropped 32.7 per cent between April and June.

But trading companies’ shares helped keep the
indices in positive territory as several commodities touched 2009 peaks.

Mitsui & Co gained 5.7 per cent to Y1,247 while larger rival Mitsubishi Corp rose 2.1 per cent to Y1,956.

Hong Kong broke a three-day winning run as Chinese banks suffered from concerns about monetary tightening.

Industrial and Commercial Bank of China fell 3.2 per cent to HK$5.41 and, in Shanghai, Bank of China shed 1.9 per cent to Rmb4.59.

But HSBC jumped 7 per cent to a ten-month high of HK$83.10 as strong interim results were greeted with a wave of broker upgrades. Its shares have nearly trebled since the bank’s massive cash call in March.

However, Hang Seng Bank, 62-per cent owned by HSBC, fell 3.8 per cent to HK$120 after it unveiled a 29 per cent drop in first-half net profits.

Standard Chartered fell 2.3 per cent to HK$182.20 after it unveiled plans for a fundraising.

The Hang Seng index slipped 0.1 per cent to 20,796.43.

But Shanghai made it four days of gains in a row in spite of the financial sector’s weakness. The Composite index edged up 0.3 per cent to 3,471.44.

Taipei suffered its worst one-day decline for three weeks as investors booked profit in the technology sector. The Weighted index fell 1.4 per cent to 6,955.87.

Mediatek, the chip designer, fell 4.6 per cent to T$453, although after the close of trade it reported better-than-expected quarterly earnings and provided solid guidance for the coming three months. HTC, which makes smartphones, fell the daily 7 per cent limit to T$346.50.

Australian stocks rallied to a fresh nine-month high as resources issues benefited from the the latest wave of economic optimism. The S&P/ASX 200 index rose 1.1 per cent to 4,309.3.

BHP Billiton rose 2 per cent to A$38.84 and Rio Tinto climbed 4.3 per cent to A$62.88.

Banks continued to power ahead with National Australia Bank up 3.6 per cent to A$25.84.

Jakarta’s Composite index rose 0.9 per cent to a 13-month high of 2,360.09
as coalmining stocks advanced but the Straits Times in Singapore fell 1.2 per cent to 2,468.76.

In Mumbai, the BSE Sensex ended 0.6 per cent lower at 15,830.98, having briefly pushed above 16,000 earlier in the session for the first time in 14 months.