Tuesday 30 June 2009

Asian Shares End Mixed; Sensex Leads Losers, Falls 1.7%

Asian Shares End Mixed; Sensex Leads Losers, Falls 1.7%

SINGAPORE (Dow Jones)--Asian stock markets ended mixed Tuesday, with overnight gains on Wall Street and higher oil prices setting the stage for an advance in Japan and Australia.

But Chinese and Indian stocks retreated as investors locked in profits on the last trading session of a robust half-year, with some anticipating a pullback in days ahead after hefty gains over the past three months.

"Investors expect that after the recent window-dressing activities, the market will enter a phase of correction," said Ben Kwong, chief operating officer at KGI Asia, referring to purchases made by institutional investors recently to shore up the value of their stock portfolios.

Japan's Nikkei 225 Average closed up 1.8% at 9958.44, failing to stay above the psychologically-important 10,000-point level that it briefly crossed during the session, on caution ahead of the Bank of Japan's tankan business sentiment survey due Wednesday.

Earlier in the day, data showed that all-household spending in May rose 0.3% year-on-year, up for the first time in 15 months, and beating expectations for a 1.2% decline. But that was tempered by the release of May jobless data, which rose to 5.2%, the highest since September 2003, from 5.0% in April.

Australia's S&P/ASX 200 Index advanced 1.8% to 3954.90, with retailers rising on an improved profit guidance from David Jones, which surged 10.2%. Shares of Woolworths edged up 2.7%.

"The upside looks greater than the downside at the moment," said AmFraser's senior vice president of equity sales, Gabriel Gan. "I think the market will remain fairly strong unless we get a really nasty piece of news from the U.S., which looks unlikely, and the July 4 holiday (in the U.S.) is traditionally a good time for the market."

Still, some market watchers warned the rally could fizzle out soon. "I'm skeptical on whether this run up is a return of confidence as I feel investors are still cautious after the market's recent gains," said Westcomb research head Goh Mou Lih in Singapore.

China's Shanghai Composite dropped 0.5% after rising the previous four sessions, also pressuring Hong Kong shares. The Hang Seng Index gave up 0.8% and the Hang Seng China Enterprises Index slipped 0.2%.

India's Sensex slid 1.7%. South Korea's Kospi added 0.1%, New Zealand's NZX 50 gained 0.8%, Taiwan's Taiex rose 0.6% and Singapore's Straits Times was up 0.7%.

Dow Jones Industrial Average futures were recently quoted 14 points higher in screen trade.

Energy shares were broadly higher as August crude-oil futures extended their gains overnight following news of militant attacks on Royal Dutch Shell's oil facility in Nigeria.

Shares of Inpex climbed 5% in Tokyo, while in Sydney, BHP Billiton rose 2.4% and Woodside Petroleum advanced 1.6%. Shares of energy producer Cnooc fell 0.7% in Hong Kong, in line with the broad market. But refiner China Petroleum & Chemical Corp., or Sinopec, climbed 3.3% after China allowed an increase in motor fuel prices.

August crude-oil futures were recently up 76 cents at $72.25 a barrel on Globex, edging further up after rising $2.33 to $71.49 a barrel on the New York Mercantile Exchange.

Japanese steel and real-estate stocks were also higher, with Nippon Steel up 3.6% while Mitsui Fudosan gained 2.8%.

In Mumbai, the fall was led by profit-taking in real estate and automobile stocks, with DLF losing 6% and Tata Motors sliding 5.9% in afternoon trading.

In New Zealand, shares of Pumpkin Patch jumped 10.4% after the company said it was shutting several stores in the U.S. in an effort to cut costs. Telecom, however, slipped 0.4% after the Commerce Commission said in its preliminary view that mobile termination prices - wholesale charges for terminating calls or texts from other fixed or mobile networks - should be regulated.

Malaysia's main share index fell 0.1% despite Prime Minister Najib Razak announcing the government planned to deregulate foreign investment rules, including removing the decades-old 30% ethnic Malays ownership requirement for initial public offerings and raising the foreign ownership limit on unit trust companies and brokerages. He added all property transactions no longer required Foreign Investment Committee approval.

Sterling dominated excitement in currency trading with the pound taking a dive as the U.K.'s first quarter gross domestic product posted its largest quarterly decline in fifty years and the biggest year on year drop on record. The pound dropped half a cent against the U.S. dollar to 1.6605, which is one and a half cents off the day's 1.6746 eight-month high seen during the Asian session after U.K. mortgage lender Nationwide Building Society said U.K. house prices may only post single-digit percentage losses for 2009.

Elsewhere, the euro was at $1.4120, from $1.4077 late in New York, and at 135.34 yen, from 135.22 yen. The U.S. dollar was at 95.84 yen, down from 96.04 yen. Traders said further falls were likely to be limited as players were unwilling to make big bets against the U.S. dollar ahead of the U.S. June non-farm payrolls on Thursday.

Spot gold was at $940.80 a troy ounce, up $3.50 from New York, aided by stronger oil prices.

-Dow Jones Newswires; +65-6415-4140; markettalk@dowjones.com

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(END) Dow Jones Newswires

June 30, 2009 06:05 ET (10:05 GMT)

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