ASIA MARKETS: Asia Stocks Head Down, Though Japan Gains

By Sarah Turner, MarketWatch

SYDNEY (MarketWatch) -- Asian stock markets traded broadly lower Thursday, with property-share weakness weighing on the Hong Kong bourse, though Tokyo shares rose on hopes for further policy easing.

Japan's Nikkei Stock Average rose 0.2%, after shedding 0.9% over the past two sessions.

In China, Hong Kong's Hang Seng Index declined 0.7%, while the Shanghai Composite Index lost 0.2%.

Likewise, Australia's S&P/ASX 200 index declined 0.8%, South Korea's Kospi fell 0.6%, and Taiwan's Taiex lost 0.3%.

U.S. stocks ended with small gains on Wednesday, with the Dow Jones Industrial Average (DJI) sealing a nine-session streak of gains after stronger-than-expected retail sales data for February. Read: Stocks gain; Dow has longest win steak since 1996

The upbeat data helped the U.S. dollar move back above Yen96 overnight, though it slid during early Japanese trade. Major exporters moved off their opening highs as a result, though many remained solidly higher.

Nikon Corp. (NINOF) rose 3.8%, while Advantest Corp. (ATE) rose 1.4%, and Toshiba Corp. (TOSYY) added 0.6%.

Toyota Motor Corp. (TM), dipped 0.2% and rival Honda Motor Co. (HMC) lost 0.9%, however. Both are among auto companies which have agreed to award bonuses to their workers, as the government has urged such hikes in compensation to achieve its goal of 2% inflation.

Panasonic Corp. (PC) lost 1.9% after an anonymously sourced Nikkei news report said the firm plans to talk with labor unions about lowering wages, as the electronics major looks set to post a loss for the year through March 31.

Meanwhile, hopes for fresh deflation-fighting measures from Tokyo got a boost, as a Wall Street Journal report said three opposition parties had agreed Wednesday to the Japanese government's choice for Bank of Japan governor, who is widely seen as dovish on monetary policy.

Real-estate -- one of the sectors expected to benefit from inflation -- saw gains, with Mitsui Fudosan Co. (8801.TO) up 2.6% and Sumitomo Realty & Development Co. (8830.TO) adding 1.4%.

Hong Kong property mauled

But most of Asia traded in the red, with property stocks dropping in Hong Kong as Deutsche Bank warned of sharp property-price drops ahead, and the state-run China Securities Journal reported that the city of Beijing may hike taxes for home resales, among other curbs.

New World Development Co. (NDVLF) tumbled 4.6%, Sun Hung Kai Properties Ltd. (SUHJY) lost 3.3%, and China Overseas Land & Investment Ltd. (0688.HK) fell 3%.

Mortgage lenders HSBC Holdings PLC (HBC) and Standard Chartered PLC are hiking their borrowing rates in Hong Kong, with the move expected to weigh on the local real-estate market. Shares of HSBC were flat, while Standard Chartered lost 0.9%.

Deutsche Bank analysts said following the HSBC move that "mortgage interest rates in Hong Kong could go up even in the absence of increases in the U.S. interest rates." Hong Kong rates generally follow those in the U.S., as the Hong Kong dollar is pegged in value to the U.S. currency.

"With the new government measures, the potential further rises in mortgage rates, and the expected increases in new supply in the medium term, we expect property prices to show larger corrections, and we expect Hong Kong home prices to fall by 15%-20% in the next 24 months," the analysts said.

In mainland Chinese trading, the real-estate losses were more modest, as the nation's top property developer China Vanke Co. fell 0.6% in Shenzhen, while rival Poly Real Estate Group Co. declined 0.3% in Shanghai.

Australian investors welcomed first-half results from department-store retailer Myer Holdings Ltd. , sending the firm's shares up 4.1%.

Over in Sydney, the benchmark index turned briefly positive after Australian mployment data surprised to the upside, but losses for miners helped drag it back to negative territory.

Among the big mining names, Rio Tinto Ltd. (RIO) lost 2.2%, and BHP Billiton Ltd. (BHP) traded lower by 2.1%.

 
   Similarly, a 2.2% drop for steel maker Posco   helped weigh on the South Korean market. 
 

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