Weaker yen, strong retail sales lift Tokyo despite Elpida bankruptcy
By Virginia Harrison and V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Most Asian markets rose Tuesday against the backdrop of a retreat in crude-oil prices, with a weakened yen and strong retail sales lifting Japanese stocks despite a fall in technology shares after Elpida Memory Inc.’s bankruptcy filing.
Hong Kong’s Hang Seng Index HK:HSI +1.65% added 1.7% to 21,568.73, Japan’s Nikkei Stock Average JP:NIK +0.92% gained 0.9% to 9,722.52, China’s Shanghai Composite CN:000001 +0.20% advanced 0.2% to 2,451.86 and South Korea’s Kospi KR:0100 +0.63% rose 0.6% to 2,003.69.
Australia’s S&P/ASX 200 index AU:XJO -0.11% declined 0.1% to 4,262.70 as poor earnings reports pressured shares of James Hardie Industries SE AU:JHX -4.24% JHX +0.27% and Boral Ltd. AU:BLD -2.73% BOALY -0.86%
“The oil price has pulled back slightly, which is positive. If the oil price is too high, it’s detrimental to parts of the economy and the recovery,” said Peter Lai, director at DBS Vickers in Hong Kong.
”But investors are waiting for catalysts to go higher and looking for more economic indicators from China,” he said.
Retail stocks led Tokyo higher in the afternoon session after a 1.9% year-on-year rise for January retail sales. See report on Japanese retail data.
Fast Retailing Co. JP:9983 +2.08% FRCOY -0.73% added 2.1%, Seven & I Holdings Co. JP:3382 +1.08% SVNDF +0.90% gained 1.1% and Takashimaya Co. JP:8233 +1.68% TKSHF 0.00% rose 1.7%.
The yen’s decline against the dollar and the euro spurred many exporters, lifting Fanuc Corp. FANUY -2.62% JP:6954 +1.96% 2% and Nikon Corp. NINOY -2.55% JP:7731 +1.92% 1.9% and Sony Corp. SNE -0.23% JP:6758 +0.74% 0.7%.
Shares of Nissan Motor Co. JP:7201 -1.08% NSANY -0.15% dropped 1.1% after saying it would recall 79,275 cars over problems with the vehicles’ fuel sensors. Read more on the Nissan recall.
Those gains helped offset weakness in technology stocks after memory chip maker Elpida JP:6665 -23.95% ELPDF +1.92% announced its bankruptcy filing late Monday, due to its inability to restructure or refinance a heavy debt load. Read more on Elpida's bankruptcy filing. JP:6665 -23.95%
Elpida stock plummeted 24%, also dragging down shares of some other technology shares. Renesas Electronics Corp. JP:6723 -3.30% RNECY -0.53% fell 3.3% and Advantest Corp. JP:6857 -1.50% ADTTF +6.54% lost 1.5%.
But Elpida rivals elsewhere gained on hopes investments to boost production capacity will fall, boosting prices. In Seoul, Hynix Semiconductor Inc. HXSCL -18.34% climbed 6.8%, while Samsung Electronics Co. SSNGY 0.00% gained 1.2%.
“We expect Hynix’s earnings to show a positive inflection point in the second quarter of 2012 driven by a DRAM price recovery, which should help drive a share price recovery,” strategists at Deustche Bank wrote in a research note, maintaining their buy recommendation on Hynix.
Samsung, Hynix and Elpida are the world’s three largest DRAM-chip producers. See report on fallout from Elpida bankruptcy.
Several airline stocks in the region rose in the region as crude-oil prices declined. Korean Air Lines Co. gaining 3.2%, Cathay Pacific Airways Ltd. CPCAY -3.51% HK:293 +5.68% jumping 5.7% in Hong Kong, Qantas Airways Ltd. QUBSF +2.31% AU:QAN +1.78% adding 1.8% in Sydney and All Nippon Airways Co. JP:9202 +0.40% ALNPY -3.65% up 0.4% in Tokyo.
Among regional stocks that moved on the back of their earnings reports, Hang Seng Bank Ltd. HK:11 +5.12% HSNGF +0.77% rose 5.1% in Hong Kong after posting a 12% gain in 2011 profit. See report on Hang Seng Bank earnings.
But index heavyweight HSBC Holdings PLC HK:5 -0.65% HBC -0.14% fell 0.7%, tracking the previous day’s losses in London, as earnings results overnight showed profit in line with analysts’ expectations but costs continuing to rise.
“The result was neutral — it met market expectations, but still some investors are demanding more, and there are too many uncertainties in the euro zone,” DBS Vickers’s Lai said. See report on HSBC earnings.
In Sydney, disappointing results from construction-materials provider James Hardie and Boral sent their shares 4.2% and 2.7% lower, respectively. See report on James Hardie results.
Among other movers in Australia, Goodman Fielder Ltd. AU:GFF +33.01% shot up 33% after Singapore-listed Wilmar International Ltd. SG:F34 +0.39% said it had bought a 10.1% stake in the grocery manufacturer. See report on Wilmar’s Goodman Fielder stake buy.
Billabong International Ltd. AU:BBG -2.30% BLLAY +6.83% lost 2.3% after the surf- and snow-wear retailer rejected a sweetened bid from U.S. private-equity firm TPG Capital. Read more about Billabong's rejection.
Property shares sagged on mainland Chinese bourses, meanwhile, coinciding with Credit Suisse research citing cuts in prices and pressure on profits. Read more on Credit Suisse report on Chinese real estate.
Among the major names, China Vanke Co. CN:200002 -2.44% CVKEF 0.00% fell 0.7% in Shenzhen, while Gemdale Corp. CN:600383 -0.66% dropped 0.7% in Shanghai.
Virginia Harrison is a MarketWatch reporter based in Sydney.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
