Posted on 28 Mar 2008
Asian markets mixed after more weak US data and another decline in dollar
Asian markets were mixed Thursday after more weak U.S. economic
data weighed on the U.S. dollar, worrying investors about the earnings of
exporting companies and the strength of the American economy.
Japanese stocks fell as investors sold electronics and auto
shares. The Nikkei 225 Stock Average declined 0.8 percent to 12,604.6 after
slipping 0.3 percent the day before.
"Day by day, I am strengthening my conviction that the U.S. economy is
in tatters," said Hideki Amikura, a senior manager at Nomura Trust and
Banking.
Hong Kong's Hang Seng Index
inched up 0.2 percent to 22,664.22, lifted as traders bought shares in
billionaire Li Ka-shing's Cheung Kong and Hutchison Whampoa after they reported
strong earnings growth for 2007.
Meanwhile, China's
main benchmark tumbled 5.4 percent to its lowest level in nearly a year, dragged
down by dramatic declines in PetroChina and other large cap stocks. The
Shanghai Composite Index fell 195.36 points to close at 3,411.49 points.
In
Tokyo,
one worry is that a stronger yen will hurt company earnings in the fiscal year
starting April 1. A strong yen makes Japanese goods less competitive in
overseas markets, and reduces the repatriated earnings of exporting companies.
"The situation will probably worsen after the new
fiscal year starts," said Koichi Haji, chief economist at NLI Research
Institute.
Among major exporters, Toyota Motor fell 2.9 percent and
Nissan Motor dropped 3.6 percent.
Electronics company TDK Corp. tumbled 7.5 percent after the
Nikkei reported that its group operating profit is expected to be worse than
forecast this fiscal year due to the rising yen.
Also, foreign investors are becoming nervous about the
country's inability to appoint a governor for its central bank.
They "are losing patience with the political situation
in Japan,"
says Patrick Mohr, director of equity research at Nikko Citigroup.
On Thursday, the dollar dipped back below 99 yen, after
having the last few days climbed to around 100 yen as it rebounded from 12 1/2-year
lows hit last week. The dollar recovered slightly late in the day, and at 4:50
p.m. in Tokyo (0750 GMT), was indicated at 99.22
yen, down from 100.00 yen Wednesday in New
York. The euro fell to US$1.5793 from US$1.5815.
Hong Kong's Hang Seng Index
fell as much as 400 points in the morning session, but Li's two flagship
companies reported their strong earnings for last year during the midday break.
Cheung Kong shares rose 1.6 percent and Hutchison Whampoa
rose 0.9 percent, helping the index to eke out its slight gain.
Traders said, though, that Friday's expiry of March stock
futures may spell the end to the index's three-day rising streak.
In mainland trading, PetroChina,
China's biggest
oil producer, led the declines, dropping 8.3 percent to 16.99 yuan, just above
its IPO price of 16.70 yuan.
Analysts said investors were dumping PetroChina stock, fearing
it would follow China Pacific Insurance, whose stock price dropped 7.5 percent
Thursday to 25.89 yuan, well below its IPO price of 30.00 yuan.
Analysts said confidence in China's
markets was weakened further Thursday by a lower-than-expected earnings report
from the listed unit of China's
biggest steel maker by capacity, Baoshan Iron & Steel.
Baoshan dropped 9 percent after announcing its net profit in
2007 fell 2.8 percent to 12.72 billion yuan on higher ore prices.
Disappointment with Baoshan's earnings prompted other blue
chips to fall. China Construction Bank dropped 5.5 percent, Air China dropped 9.1
percent, and China Shenhua Energy dropped 9.8 percent.
Elsewhere in Asia, Australia's
S&P/ASX 200 fell 0.2 percent, the Philippine Stock Exchange rose 0.3
percent, and Taiwan's
Weighted Price Index fell 1.9 percent.
On Wednesday, Washington
released data showing that durable goods orders fell 1.7 percent in February —
much lower than the consensus of a 0.8 percent gain polled by Dow Jones.
The market is now waiting for U.S. weekly jobless claims data and
final gross domestic product figures for the fourth quarter — both set for
release later in the day.
