Asia markets mixed amid uncertain global outlook

The Associated Press ,  Hong Kong   |  Tue, 06/17/2008 6:18 PM  |  Business

Asian markets were mixed Tuesday as persistent worries over the U.S. economy, oil prices and inflation kept many investors from buying. Chinese stocks, meanwhile, resumed their shady decline.

Markets in Australia, Taiwan and India rose, while Hong Kong, Japan and New Zealand shares closed little changed. Benchmark indices fell in Singapore and South Korea.

The sideways trade followed Wall Street's own mixed session overnight after oil hit a new record just shy of US$140 a barrel before sliding back. In Asian trading, oil prices eased further to fall to around $133 a barrel.

Trading was thin in several markets amid a dearth of positive news about the global economy. Investors also were holding back ahead of second-quarter earnings releases from U.S. banks this week, as well as U.S. producer price index data for May.

"For the market to fundamentally take the next step, it will need some sort of stimulus, like a drop in oil prices or a rise in U.S. stocks," said Hiroichi Nishi, general manager at Nikko Cordial in Tokyo.

"Today, there was little to energize the market."

In Japan, stocks ended virtually flat, stalling robust gains over the last two sessions. The benchmark Nikkei 225 index slipped 0.04 percent to 14348.37 after climbing on Friday and Monday.

Steel companies, hit with ratings downgrades by some brokerages, were among the day's biggest decliners. JFE Holdings, Inc. ended down 1.03 percent and Nippon Steel Corp. dropped 1.25.

Banking stocks were firm following earnings overnight by Lehman Brothers that were largely within expectations, with Mizuho Financial Group and Sumitomo Mitsui Financial Group gaining.

Major exporters also struggled on a faltering U.S. dollar. Toyota Motor Corp. lost 0.9 percent, while rival Honda Motor Co. shed 1.8 percent.

In China, the benchmark Shanghai Composite Index dropped 2.8 percent to 2,794.75.

Despite a slight gain for the Shanghai benchmark on Monday, which broke an eight-session losing streak, investors saw no reason to buy, analysts said.

"Market sentiment is so low that investors are selling in a panic," said Zhang Linchang, a strategist at Guotai Jun'an Securities in Shanghai.

"There are no good data releases, no good signals, no market boosting moves by the government. The market lacks confidence and we don't know where the bottom is," Zhang added.

Market heavyweight PetroChina, hit by worries over the impact of surging crude oil prices on its refining operations, fell 0.9 percent. Airlines lagged, with flag carrier Air China shedding 9.9 percent.

Properties and brokerages also suffered, as did financial institutions. Citic Securities lost 7 percent and Pacific Securities dropped by the 10 percent daily limit.

Hong Kong stocks swung in and out of red territory during a listless session before closing flat. The blue-chip Hang Seng Index edged up about 0.1 percent to 23,057.99, and turnover hit a low for this year.

"The U.S. economy is in the dumps, the mainland market is falling. So nobody wants to take a position," said Francis Lun, general manager of Fulbright Securities Ltd.

Energy companies gained amid hopes that Saudi Arabia would increase output and the Chinese government would lift price caps. Refiner China Petroleum & Chemical Corp, or Sinopec, and PetroChina both climbed.

Airlines were down. Cathay Pacific fell after a bank cut its earnings forecast for the company, while Air China lost after saying its passenger traffic slowed because of the Sichuan earthquake.

Mainland banks ICBC and China Construction also finished lower. China Unicom and its takeover target, China Netcom, provided a bright spot, each climbing more than 3 percent.

In currency dealing, the greenback retreated against the yen and the euro Tuesday after media reports predicted that the Federal Reserve appears unlikely to raise interest rates anytime soon.

The dollar dipped to 107.92 yen Tuesday afternoon, down from 108.17 in late trading Monday. The euro was up at $1.5512 from $1.5464. (****)

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