MW: Asian markets mostly down as commodity stocks drop
Mumbai stocks bounce; Telecom shares up on appeal as defensive plays
HONG KONG (MarketWatch) -- Asian equity markets ended mostly lower Tuesday as weaker metal and oil prices dragged on commodity and shipping related stocks.
Japanese stocks ended lower for a fifth straight session in spite of broad overnight gains on Wall Street. Indian shares were trading higher, reclaiming some of their hefty post-budget losses in the previous session.
"Sentiment is not really positive," said Mizuho Securities market analyst Yukio Takahashi. "Retail investors who led the Nikkei's rally late last month are less active."
Japan's Nikkei 225 Average ended down 0.3% at 9647.79 while Hong Kong's Hang Seng Index slid 0.7% to 17862.27.
China's Shanghai Composite fell 1.1%, snapping a four-session winning streak, Taiwan's Taiex climbed 1%, Australia's S&P/ASX 200 dropped 0.4%, New Zealand's NZX 50 rose 0.1% and South Korea's Korea's Kospi added 0.4%.
In afternoon trading, India's Sensex was up 0.6% and Singapore's Straits Times Index was flat.
Nikko Cordial senior strategist Tsuyoshi Kawata said the yen's modest strength was hurting technology and auto stocks in Tokyo. A rise in the Dow Jones Industrial Average Monday "doesn't help the Japanese market because it was mostly defensives that gained," he added.
A decline in crude-oil and gold prices hurt resource-related stocks, with Japan Petroleum Exploration Co. (JP:1662 4,940, -160.00, -3.14%) shedding 2.8% in Tokyo, while Rio Tinto (RTP 148.23, -10.26, -6.47%) (AU:RIO 47.35, -1.15, -2.37%) fell 2.4% and New Crest Mining (AU:NCM 29.57, -0.61, -2.02%) (NCMG.Y 23.80, -0.48, -1.98%) slid 2% in Sydney. PetroChina Co. (HK:857 8.17, -0.17, -2.04%) (PTR 105.68, -2.20, -2.04%) lost 2.2% in Shanghai and 2% in Hong Kong, while gold miner Zijin Mining (HK:2899 6.46, -0.13, -1.97%) (ZIJMF 0.87, +0.05, +6.41%) gave up 2% in Hong Kong.
Among shipping companies, Mitsui O.S.K. Lines (JP:9104 567.00, -26.00, -4.38%) (MSLOF 6.45, -0.35, -5.09%) lost 2.7% in Tokyo, Shipping Corp. of India dropped 1.9% in Mumbai afternoon trade, while STX Pan Ocean (SPNOF 1.95, -0.11, -5.34%) skidded 3.1% in Seoul and 0.9% in Singapore trading.
Nymex crude for August delivery lost $2.68 to end at $64.05 a barrel on the New York Mercantile Exchange. The contract was recently down 45 cents at $63.60 on Globex, where copper futures were also trading lower.
Spot gold prices, meanwhile, gave up $2.50 to $922.40 a troy ounce.
Kitco Metals senior analyst Jon Nadler noted the Indian government's budget Monday included an increase in import duty on gold and silver, and said this was an effective way to kill whatever residual demand was left for those metals.
Dow Jones Industrial Average (INDU 8,325, +44.13, +0.53%) futures were recently about 46 points lower in screen trade.
Telecommunications shares were broadly higher across the region with Singapore Telecommunications (SGAP.Y 20.37, +0.16, +0.79%) (SG:Z74 2.99, +0.07, +2.40%) climbing 2.1% recently. NTT DoCoMo (DCM 14.70, +0.27, +1.87%) (JP:9437 140,500, +2,100, +1.52%) rose 1.6% in Tokyo, China Unicom (Hong Kong) (CHU 13.16, +0.55, +4.36%) (HK:762 10.26, +0.24, +2.40%) gained 2.4%, Far EasTone Telecommunications (FEOTF 1.18, 0.00, -0.36%) gained 1.8% in Taipei and Bharti Airtel jumped 4.5% in Mumbai.
Credit Suisse analysts wrote in a report that telecom shares were the most undervalued among defensive sectors in Asia, with the biggest valuation discounts among telecoms found in the Philippines, China, Singapore and Taiwan.
HK:293 10.90, +0.64, +6.24%
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Cathay Pacific Airways (HK:293 10.90, +0.64, +6.24%) (CPCA.Y 6.55, -0.24, -3.53%) soared 6.2% in Hong Kong after J.P. Morgan upgraded the stock to overweight from underweight, saying the airline has passed the bottom of its earnings cycle. Similar upgrades by the brokerage lifted shares of Singapore Airlines (SG:C6L 12.88, +0.20, +1.58%) (SING.Y 17.25, -0.50, -2.82%) 1.6% and Korean Air (KRNRF 28.50, -0.01, -0.04%) shares 0.7%, while Air China (HK:753 3.92, +0.14, +3.70%) (AIRYY 9.88, -0.07, -0.70%) shares gained 3.7% in Hong Kong and China Airlines stock rose 3.3% in Taipei.
Technology stocks were holding up the Korean market on optimism for second-quarter earnings after strong earnings guidance from Samsung Electronics (SSNLF 440.92, -440.92, -50.00%) Monday. Samsung itself ended up 2.5%, while Hynix Semiconductor Inc. (HXSCF 11.87, +0.37, +3.18%) rose 2.3% and LG Electronics (LGEAF 96.98, +3.64, +3.90%) jumped 5.3%.
Shares of China Mengniu Dairy (CIAD.Y 0.00, 0.00, 0.00%) (HK:2319 19.32, +0.22, +1.15%) gained 1.2% on news Chinese state-owned firm Cofco and private equity firm Hopu Investment Management were teaming up to invest around $780 million for a 20% stake in the company.
Malaysia's main share index was down 0.6% and Philippine stocks gained 0.9%, while Indonesian shares recently advanced 1.9%.
Currency-market trade remained very choppy before the week's Group of Eight summit in Italy, with most cues coming from the stock market. The euro was lower, at 132.53 yen from 133.34 yen in late New York trade, and at $1.3936 from $1.3980. The dollar was buying 95.07 yen, from 95.33 yen.
