ASIA MARKETS: Asian Stocks Mixed; Tokyo Drops After Roller-coaster

By V. Phani Kumar

Asian markets ended mixed Tuesday as export-related shares and financials broadly advanced but property developers lost ground on a weak outlook for prices.

Australian shares ended higher for the fifth time in six sessions after the government announced a fiscal stimulus plan and the central bank cut a key interest rate by a full percentage point.

Japanese stocks took a roller-coaster ride before being grounded by declines in lenders such as Shinsei Bank and Mitsubishi UFJ Financial Group.

Chinese shares in Shanghai extended gains on hopes the government may unveil more policies to support a weakening economy.

But in Hong Kong, property stocks declined a day after the Hong Kong Monetary Authority said the number of residential-mortgage loans in negative equity nearly quadrupled in the last quarter of 2008 as property prices dropped. Sun Hung Kai lost 4.9% and Cheung Kong (Holdings) shrank 6.1%.

"Maybe on the mainland people are still expecting the government to introduce more policies, but I don't think that's helping Hong Kong markets much," said Linus Yip, strategist at First Shanghai Securities.

China's Shanghai Composite, where trading resumed Monday after a long Chinese New Year holiday, extended gains to finish 2.4% up at 2,060.81.

The performance lifted the Hang Seng China Enterprises Index, also known as the H shares index, 0.7% in Hong Kong. But the benchmark Hang Seng Index closed 0.7% lower at 12,776.89.

In Tokyo, the Nikkei 225 Average closed 0.6% down at 7,825.51. The benchmark flirted with gains a few times and rose as much as 2.7% after the Bank of Japan announced it planned to buy stocks worth up to 1 trillion yen ($11.1 billion) through April 2010 from Japanese banks to help improve the lenders' balance sheets.

Mitsubishi UFJ (MTU) shares fell 0.8% and Shinsei (SKLKF) stock lost 7.4% after Japanese media reported they would slash earnings forecasts. Shinsei after the market closed said it predicts a group net loss for the fiscal year ending in March.

Shipping stocks rose sharply, however, after another rise for the Baltic Dry Index, with Nippon Yusen (NYUKF) rising 5.2% and Mitsui O.S.K. Lines (MSLOF) finishing 4.9% higher.

In Sydney, the S&P/ASX 200 rose 0.3% to 3,508.70, although it gave up some of its early gains after the Reserve Bank of Australia cut its official cash rate target by 100 basis points to 3.25%, as expected. But the market remained supported by the government's plan for an additional A$41.5 billion (US$26 billion) in fiscal stimulus.

"What the government is doing is providing some fairly good support, but it may not be enough to completely offset the damage that's going to be done to businesses and exports from the very sharp downturn in the global economy," said ANZ Bank senior economist Katie Dean.

Shares of Commonwealth Bank of Australia (CBA.AU) jumped 9.8% after the lender forecast its half-yearly profit was likely to be 16% lower than it was in the year-earlier period but 20% higher than consensus analyst estimates.

The prediction lifted other financials, with National Australia Bank (NABZY) gaining 4.5% and Westpac Banking Corp. (WBK) jumping 7.1%.

Banks also advanced in Hong Kong, Mumbai and Seoul, recovering some of their losses from the previous session. Bank of China (601988.SH) gained 1% in Hong Kong, Icici Bank (IBN) climbed 3.6% in Mumbai afternoon trading and Industrial Bank of Korea (IBOKF) rose 3.6%.

In afternoon trading, India's Sensitive Index rose 2.4% to 9,284.02, with DLF extending losses to tumble 12.5% by mid-afternoon after reporting a sharp decline in earnings last week.

Vinod Sharma, director and head of research at Anagram Securities in Ahmedabad, said investor confidence was low in the wake of poor corporate-earnings growth and as foreign investors continued to sell down their holdings.

"Currently, people are looking for opportunities where, if the market goes up they would like to lighten their commitments," he said. "Long-term players are staying away and I don't see serious people entering the market."

Investors mostly looked past the mixed performance on Wall Street on Monday. The Dow Jones Industrial Average (DJI) fell 0.8% and the broader S&P 500 (SPX) was down 0.1%, though the Nasdaq's (RIXF) 1.2% gain boded well for technology stocks.

In Seoul, Samsung Electronics (SSNLF) was up 3.5% and Hynix Semiconductor Inc. (HXSCF) rose 2.4% on hopes of a recovery in chip prices. In Taipei, Hon Hai Precision (HNHAY) gained 2.2% and AU Optronics Corp. (AUO) jumped 5.4%.

South Korea's Kospi ended up 1.4% at 1,163.20 and Taiwan's Taiex gained 2.7% to 4,372.81. Malaysian shares fell 0.7% and Indonesian stocks declined 0.5%, while Thailand's main index added 0.5% by late afternoon. Singapore's Straits Times Index added 0.6% to 1,715.70.

In foreign-exchange markets, the U.S. dollar was buying 89.56 yen versus 89.60 yen Monday afternoon in New York and the euro fetched 115.09 yen, compared with 115.13 yen. Against the dollar, the euro was trading at $1.2856 compared with $1.2847.

The Australian dollar enjoyed a modest bounce after the RBA's expected rate cut, trading at US$0.6387 compared with US$0.6350 before the decision.

March Nymex crude-oil futures were last up 22 cents at $40.30 a barrel after falling in New York trade following the resolution of a refinery labor dispute.

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