Wednesday, 1 July 2009

Asian Shares End Mixed; Shanghai Stocks Soar 1.7% On PMI

Asian Shares End Mixed; Shanghai Stocks Soar 1.7% On PMI

SINGAPORE (Dow Jones)--Asian stock markets finished mixed on Wednesday, with Chinese stocks ending at their highest level in more than a year after data showed an improvement in manufacturing activity.

Japanese shares ended slightly lower after a turbulent session as investors considered a slightly weaker-than-expected result from the Bank of Japan's tankan survey, while Australian stocks declined, tracking an overnight fall on Wall Street.

"The lack of buying today was very evident," said Stuart Smith, a private client adviser at Bell Potter Securities in Australia. "It was just a crescendo leading up to the 30th of June. On the first of July (the start of a new financial year in Australia), the market let out a breath."

Japan's Nikkei 225 Average ended 0.2% lower at 9939.93. For the second straight session, the benchmark crossed the 10,000-point milestone intraday, but couldn't stay above it.

Hong Kong stock markets were closed for a holiday.

Australia's S&P/ASX 200 fell 2.1%, South Korea's Kospi advanced 1.6% and Taiwan's Taiex jumped 2.3%, a day after the Taiwanese government lifted a bank on Chinese investment in 100 sectors.

India's Sensex rose 1.2% and Singapore's Straits Times climbed 0.8% in afternoon trading, while New Zealand's NZX 50 ended down 0.6%.

Earlier in the day, the Bank of Japan's June tankan survey came in weaker than expected, with the headline diffusion index at minus 48, compared with a minus 43 result expected and a record low of minus 58 posted in March.

Macquarie Research's economist Richard Jerram said the weaker-than-expected result was not a cause for great concern as forecasts for next quarter's survey predict continued improvement.

"The tankan is clearly lagging a long way behind a whole lot of other surveys (that) have been improving over the past five months. That's the most striking feature," he said. "But when the cycle is swinging from such extreme weakness to a firmer position, you're always going to have a lot of numbers showing different trajectories."

China's Shanghai Composite ended up 1.7% at 3008.15, its highest finish since June 2008, after official data showed the mainland's purchasing managers' index rose to 53.2 in June from 53.1 in May. A PMI reading above 50 indicates growth.

Merrill Lynch economists Ting Lu and T.J. Bond wrote in a report that although the increase was lower than their expectations, it delivered a "positive message about the ongoing recovery in China. The rising PMI will support China-related asset prices, especially commodity prices."

Dow Jones Industrial Average futures were recently quoted 30 points higher in screen trade.

In Tokyo trading, All Nippon Airways tumbled 5.9% and financial services major Orix Corp. lost 4.8% on equity dilution concerns after The Nikkei reported that the two companies were considering raising capital through share sales.

Real estate shares were higher, supported by growing expectations that office vacancies may top out in the coming fall-to-winter period, while office rents may bottom out early next year. Mitsui Fudosan ended 0.7% higher, while Mitsubishi Estate Co. rose 0.3%.

Cyclicals were underperforming after weakness in metals prices Tuesday, with BHP Billiton down 2.4% and Rio Tinto down 1.2% in Sydney, Inpex Corp. losing 2.7% in Tokyo and Oil & Natural Gas Corp. losing 1.1% in Mumbai afternoon trading.

Property shares were boosted in Taipei after the government lifted its ban on Chinese investments, with Cathay Real Estate Development Co. gaining 4.9% and Farglory Land Development climbing 5.5%.

In Seoul, the Kospi was aided by news South Korea's June trade surplus hit a record $7.44 billion, better than the $4.76 billion surplus expected.

Samsung Electronics rose 1.9%, though Hyundai Motor Co. was off 1.2% following weak U.S. consumer sentiment data released overnight. Posco climbed 1.8% after the steel major agreed to pay A$7.8 million for a 16.7% stake in Australia's Jupiter Mines.

Malaysia's main index was 0.4% lower and Philippine shares slipped 0.2%, while Indonesia's share index advanced 1.6%.

The dollar was higher against the yen, at Y96.72 compared with Y96.34 in late New York trade, extending its recent rally. The euro was at $1.4065 compared with $1.4025 and at Y136.07 from Y135.13.

South Korea's won gained on news of a record high June trade surplus. The dollar was lower at KRW1,267.4 from Tuesday's close of KRW1,273.9.

Spot gold was at $931 a troy ounce, up $4.40 from New York levels. August Nymex crude futures were recently at $71.18 a barrel, up $1.29 on Globex.

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

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(END) Dow Jones Newswires

July 01, 2009 05:17 ET (09:17 GMT)


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