MW: Tokyo stocks decline in spite of rate cut, stimulus
Toyota also drops on report it may post a loss; HSBC drags on Hang Seng
HONG KONG (MarketWatch) -- Japanese stocks finished lower at the end of an eventful and volatile trading session Friday, with banks such as Mizuho Financial Group advancing, while Toyota Motor Corp. and energy-related shares extended losses.
The Bank of Japan cut its benchmark interest rate to 0.1% from 0.3%, as expected, in response to weakening economic fundamentals. Read BOJ rate cut story.
Separately, the government reportedly approved an emergency stimulus package worth 43 trillion yen ($489 billion), including 20 trillion yen for purchasing equity holdings from banks to improve their liquidity. See Japan stimulus story.
The Nikkei 225 Average ended 0.9% lower at 8,588.52, while the broader Topix index dropped 0.5% to 834.43, after changing direction a few times during the session.
Yoji Takeda, head of regional equities at RBC Investment, said the Bank of Japan rate cut wasn't as big a surprise as the U.S. Federal Reserve's sharp reduction in the Fed funds rate earlier this week, but added the liquidity boosting measures by the central bank were a positive.
"Had they not done that, market sentiment would have been very negative," said Takeda. Still, "investors are sort of skeptical at the moment. They want to see some [positive impact] on the economy, and that might take a while."
Banking shares gained on the stimulus plan report, with Mitsubishi UFJ Financial Group (JP:8306: news , chart , profile ) (MTU:
, , ) ending 3.3% higher, while Mizuho (MFG:
5.68, +0.22, +4.0%) (JP:8411: news , chart , profile ) shares climbed 1.2%.
Shares of Toyota Motor (TM:
65.54, -2.93, -4.3%) (JP:7203: news , chart , profile ) dropped 2% after the Nikkei business daily reported the automobile giant was likely to post its first-ever operating loss during the year ending March 31 on plunging worldwide sales.
Hong Kong, others
Other markets in the region ended mixed after also wavering through the session, with indexes in Sydney, Shanghai, Mumbai, Seoul, Singapore and Taipei changing direction at least once.
The choppiness came as overnight losses on Wall Street added to selling pressure, with some funds still keen to buy to boost their year-end portfolios.
In Hong Kong, the Hang Seng Index ended 2.4% lower at 15,127.51. The widely-watched Hang Seng China Enterprises Index, also called the H share index, dropped a more modest 1.4% to 8,435.31, declining for the first time this week.
Steve Cheng, associate director at Shenyin Wanguo in Hong Kong, said in spite of the day's losses, the Hong Kong market seemed "very resilient, as we are getting a lot of support" from Chinese shares traded in Hong Kong.
"The reason might be that people are still expecting more measures from China, especially something like a cut in interest rates or bank reserve ratio. This happens before every weekend, but this time it seems more likely," said Cheng.
Australia's S&P/ASX 200 finished up 1% at 3,615.70, reversing early declines, and South Korea's Kospi rose 0.4% to 1,180.97.
Elsewhere, China's Shanghai Composite rose 0.1% to 2,018.46, Taiwan's Taiex was little changed at 4,694.52 and New Zealand's NZX 50 index lost 1.9% to 2,655.31.
By late afternoon, India's Sensitive Index, or Sensex, gained 0.8% to 10,152.30, while Singapore's Straits Times Index slipped 0.1% to 1,796.68.
Stocks in detail
Hong Kong stocks were weighed down as market heavyweight HSBC Holdings (HK:5: news , chart , profile ) (HBC:
46.66, -5.36, -10.3%) tumbled 6.2%, on top of Thursday's 3.4% decline, on market speculation it may raise capital.
Energy-related stocks dropped across the region, with Woodside Petroleum (WOPEY:
92.11, -7.88, -7.9%) lost 4.9% in Hong Kong and Oil & Natural Gas Corp. fell 2.5% in Mumbai afternoon trading.
January crude-oil futures rose as much as 18 cents to $36.40 a barrel in electronic trading, after sliding 9.6%, or $3.84, to $36.22 a barrel Thursday on the New York Mercantile Exchange.
In Sydney, banks rebounded on bargain-buying after recent losses, with Commonwealth Bank of Australia (CBAUF:
54.26, -2.84, -5.0%) gaining 8.6%.
In Asian currency trading, the U.S. dollar changed hands for 88.76 yen, compared to 89.20 yen Thursday.
Overnight on Wall Street, the Dow Jones Industrial Average ($INDU:
8,604.99, -219.35, -2.5%) fell 2.5% to 8,604.99 and the S&P 500 index ($SPX:
885.28, -19.14, -2.1%) gave up 2.1% to 885.28, while the Nasdaq Composite ($COMPX:
