Asian Shares Lower, Weaker Yen Helps Japan
08/19/2012| 10:05pm US/Eastern
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Asian markets were mostly lower Monday, with Hong Kong falling ahead of a week full of corporate earnings, while Japanese stocks were helped by a weaker yen.
"The eventual bias is skewed downwards, as the recent market rally had priced in plenty of expectations for easing actions from both the U.S. and Europe, and further economic stimulus measures from China," said Ben Kwong, chief operating officer at KGI Asia.
The dollar rose against a number of regional Asian currencies following data Friday showing improved U.S. consumer sentiment, which lowered the chances of a new round of monetary stimulus. This prompted a continuation in the shift away from the region's safe haven currency: at Y79.54, the dollar had stabilized against the yen, after gaining 1.7% against the Japanese currency last week.
The recent softening of the yen is still enough to lure investors back into Japanese equities, though the benefits diminished as the market was caught up in the regional fall. The Nikkei was up by 0.1%, as local exporters continued to climb. Honda Motor was up 0.8% and Panasonic added 1.2%.
Hong Kong's Hang Seng Index dropped 0.8% as investors started to get into position for a week that will be dominated by earnings reports. With more than 300 companies announcing results this week there could be plenty of volatility in individual stocks.
China Merchants Bank and Chongqing Rural Commercial Bank kicked off the earnings season for Chinese banks after the close of trading Friday, and fell 1.4% and up 1.6%, respectively, Monday. China's largest banks, which will report this week and next, were lower: Industrial and Commercial Bank of China dropped 1.6% and China Construction Bank was 0.9% lower.
China Pacific Insurance (Group) fell 2.6% in Hong Kong after reporting that its first-half net profit dropped 54.6% from a year earlier, in part because of lower investment returns.
The Shanghai Composite was down 0.9% as property developers fell amid concerns Beijing will continue to apply property controls after real estate prices increased in some cities: China Vanke dropped 2.7% and Gemdale lost 3.5%.
Australia's S&P ASX 200 was down 0.1% as several index heavyweights were trading ex-dividend--meaning new buyers aren't eligible to receive dividends from the most recent period. This included Telstra Corp., which was 1.1% lower. Resources stocks were also showing some weakness, as iron ore hit a fresh two-and-a-half year low, pushing Fortescue Metals Group down by 1.3%.
South Korea's Kospi was 0.3% lower as the market was weighed by major blue chips: Samsung Electronics fell 1.4% ahead of a U.S. court's ruling on the company's legal battle with Apple. Hyundai Motor was off 1.2% due to concerns over an extended labor strike.
Public holidays shut markets in Indonesia, India, Malaysia, Singapore, and the Philippines.
In corporate news, Rakon gained 16.7% in New Zealand after the company, which produces the crystals used in global position systems, signed a letter of intent with Huawei, which targets a quadrupling of sales to the Chinese company over the next five years.
Write to Daniel Inman at Daniel.Inman@wsj.com
(An earlier version of this article misstated the markets' direction in the headline.)
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