WSJ: Asian Shares End Mixed; China Stocks Weigh On Markets
SINGAPORE (Dow Jones)--Asian benchmarks erased early gains Tuesday to end mixed, dragged lower by losses in Chinese shares after Beijing dashed hopes that it would relax its tightening policies on the property market.
The Chinese government denied an unsourced report in the state-run Securities Times newspaper Monday that China had loosened some controls on mortgage lending in first-tier cities, with three ministries late Monday reiterating their resolve to stick to tight property policy to curb speculation.
"With the central government reiterating that tightening measures need to be implemented, any loosening of mortgage lending is unlikely in the next three months, particularly when prices haven't come down significantly as yet," JPMorgan analyst Lucia Kwong said.
China's Shanghai Composite index ended down 1.6%, while Hong Kong's Hang Seng index lost 0.2%.
Japan's Nikkei Stock Average ended down 0.1%, Australia's S&P/ASX 200 skidded 0.7% and Taiwan's Taiex was 0.6% lower. South Korea's Kospi Composite eked out a gain of less than 0.1% and India's Sensex was up 0.3% in afternoon trade.
Dow Jones Industrial Average futures were up 48 points in screen trade.
In China, property developers led declines. China Vanke fell 2.4% and Poly Real Estate Group was down 4.3%.
In Hong Kong, mainland developers slipped with Country Garden down 0.9%, Guangzhou R&F Properties off 1.3% and Agile Property 1.2% lower.
Zijin Mining fell 12.2% after China's biggest gold producer said on Monday it halted operations at one of its copper plants in eastern China after a leak of acidic waste water.
In Tokyo, steel stocks closed lower, hurt by the Chinese government's efforts to curb China's steel capacity. JFE Holdings was down 2.4% and Nippon Steel fell 2.3%.
China's Ministry of Industry and Information Technology said on Tuesday the country plans to eliminate steel mills whose 2009 output was less than 1 million metric tons to consolidate the fragmented sector and remove obsolete capacity.
Nissan Motor shed 1.5% after the auto maker said on Monday it will suspend operations at four of its five domestic plants for three days from Wednesday due to a delay in the delivery of engine parts from Hitachi. On Tuesday, Nissan also said the delay could affect its North American production.
Mizuho Financial Group dropped 2.2% to a 2010 low on almost five times normal trading volume, as investors sold on concerns that the total net amount of its fundraising could fall below its expectation for a Y857.6 billion issuance due to the sharp drop in Mizuho's share price in recent weeks. Tuesday marked the start of the pricing window for the offer worth up to Y857.6 billion. After the market close, Mizuho priced it at Y130 per share, representing a 3.7% discount to Mizuho's closing price of Y135 on the Tokyo Stock Exchange Tuesday.
In Australia, BHP Billiton was down 2.6% and Rio Tinto shed 3.2% on the weakness in Wall Street's materials sector on Monday.
The South Korean market managed to end slightly higher after struggling for much of the session.
"Investors are not making aggressive moves today...the market is waiting to check Intel's results tonight," said Samsung Securities analyst Chung Myoung-ji.
Intel is set to release it's second-quarter results later in the global day.
Relatively undervalued financial holding firms were up with Hana Financial 1.6% higher, Shinhan Financial up 1.0% and KB Financial up 1.2%.
Ssangyong Motor fell 4.5% after news the deadline for binding bids to buy the car maker has been extended by three weeks, as some of the six bidders sought more time to complete due diligence on Ssangyong's books.
Hynix Semiconductor was down 3.9% due to rising concerns over slowing global personal computer shipment growth and falling memory chip prices.
"Expectations for "seasonally-strong demand for PCs in the second half are unlikely to be met, which will hurt demand for DRAM chips eventually," said HI Investment & Securities' Song Myung-sub, who recently revised down 2010 global PC shipment forecast to 16%-18% from 20% previously, largely due to Europe's fiscal crisis.
In India, bellwether information technology giant Infosys Technologies was down 3.4% in early trade after its first quarter consolidated net profit dropped 2.4% on-year to INR14.88 billion, missing market expectations.
Investors were ignoring the company's usually keenly watched U.S. dollar revenue guidance, which it raised for the fiscal year 2011 to $5.72 billion to $5.81 billion. Infosys also raised its earnings per American depositary share guidance to $2.42 to $2.52.
"The rise in (earnings per ADS) guidance is less than 1.0%. So there isn't anything to cheer about," said Dolat Capital analyst Rahul Jain.
Elsewhere in the region, New Zealand's NZX-50 ended down 0.1% and Thai shares were down 0.3%. Singapore's Straits Times Index was up 0.1%, Malaysia's KLCI benchmark was up 0.5% and Philippine shares were up 0.8%.
In foreign exchange markets, the euro had lost its early shine, along with stock markets across Asia, while the Japanese yen benefited from some safe-haven bids.
The euro was at $1.2581, compared with $1.2593 in late New York trade Monday, and at Y111.25 from Y111.55. The dollar was at Y88.41 from Y88.59.
Lead September Japanese government bond futures were down 0.05 at 141.40 points. The 10-year cash JGB yield was up 0.5 basis point at 1.125%.
Spot gold was at $1,205.30 per troy ounce, up $8.20 from New York's close on Monday while August Nymex crude oil futures were up 42 cents at $75.37 per barrel in electronic trading.
-Dow Jones Newswires; +65-6415-4140; markettalk@dowjones.com
