MW: Asia markets fall as Europe debt jitters weigh
By Virginia Harrison and V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Most Asian stock markets ended with mild losses Thursday on expectations the European Central Bank’s massive lending to banks won’t solve the region’s debt crisis.
Investor caution ahead of the year-end continued to affect trading volumes across most of the region.
Australia’s S&P/ASX 200 index AU:XJO -1.18% shed 1.2% to 4,090.80, China’s Shanghai Composite CN:000001 -0.22% declined 0.2% to 2,186.30, Hong Kong’s Hang Seng Index HK:HSI -0.21% fell 0.2% to 18,378.23, South Korea’s Kospi KR:0100 -0.05% slipped 0.1% to 1,847.49 and Taiwan’s Taiex ended flat at 6,966.35.
Japan’s Nikkei Stock Average JP:NIK -0.75% closed 0.8% lower at 8,395.16, heading into a three-day weekend.
“It is close to the end of the year, volumes are very light, and investors are on the sidelines and in a holiday mood,” said Yoji Takeda, head of Asian equities at RBC Global Asset Management in Hong Kong.
Takeda said some of the day’s losses were tied to “a bit of profit-taking” after Wednesday’s rally for most of the region.
The performance in Asia followed a flat finish for the Dow Jones Industrial Average DJIA +0.03% Wednesday, after an ECB bank-lending program garnered higher-than-expected demand.
The ECB loaned 489 billion euros ($639 billion) to 523 banks for three years. Some analysts said the ECB’s new lending program wouldn’t increase lending between banks and does nothing to reduce the huge debt burdens of European governments.
“The liquidity provisions are not and cannot be the ‘bazooka’ that so many want,” said Marc Chandler, strategist at Brown Brothers Harriman. “It does not cure what ails Europe, but it treats it and will have to continue to do so in the months ahead.”
Takeda said the ECB action and the applications by banks offered “some sense of stability, at least for the liquidity side — it’s not really bad news.”
Major movers
Toyota Motor Corp. JP:7203 -0.60% TM -0.09% fell 0.6% after saying its sales were estimated to fall 6% in 2011, likely costing the company its position as the world’s biggest auto maker by sales. See report on Toyota’s sales warning.
Alibaba.com Ltd. HK:1688 -0.51% ALBCF 0.00% rose 0.5% in Hong Kong and Yahoo Japan Corp. JP:4689 +2.06% YAHOF -0.78% added 2.1% in Tokyo, following reports that Yahoo Inc. YHOO +2.25% was in talks to shed most of its ownership in the Asian assets. See report on possible Alibaba-Yahoo deal.
Technology shares were in focus after the Nasdaq Composite COMP -0.99% underperformed other major benchmarks in the U.S.
Advantest Corp. JP:6857 -4.52% ATE -1.34% lost 4.5% and Renesas Electronics Corp. dropped 0.9% in Tokyo, while Hynix Semiconductor Inc. fell 0.9% in Seoul.
Chip-maker Elpida Memory Inc. JP:6665 +0.27% ELPDF -5.91% rose 0.3%, after a Nikkei business daily report that it was opening talks with Taiwan’s Nanya Technology Corp. to discuss a tie-up and possible integration. Nanya shares lost 0.5% in Taipei.
Elpida also said Thursday it was in discussions with banks to secure fresh working capital. See report on latest Elpida news.
Resource shares were weak in Sydney, with BHP Billition Ltd. AU:BHP -1.37% BHP +0.14% down 1.4% and Rio Tinto Ltd. AU:RIO -1.75% RIO +1.76% 1.8% lower.
Gold miners tracked a loss for gold futures in overnight New York trade. Zijin Mining Group Co. HK:2899 -2.30% ZIJMF 0.00% CN:601899 -0.78% fell 2.3% in Hong Kong and 0.8% in Shanghai; Newcrest Mining Ltd. AU:NCM -3.34% NCMGY +3.77% lost 3.3% in Sydney.
Australian consumer-product retailers extended a recent negative run. Department store Myer Holdings Ltd. AU:MYR -6.16% slumped 6.2%, electronics seller JB Hi-Fi Ltd. AU:JBH -3.80% fell 3.8%, and Harvey Norman Holdings Ltd. AU:HVN -2.39% HNORY 0.00% lost 2.4%.
The losses came after outdoor-clothing retailer Kathmandu Holdings Ltd. NZ:KMD -25.45% AU:KMD -25.45% warned of weak Christmas demand, sending its shares to end down 25.5% on both the Wellington and Sydney exchanges.
