Asian markets mixed amid high oil prices, uneven US economic data; European indices open lower

The Associated Press , Hong Kong | Fri, 07/04/2008 8:06 PM | Business

Asian markets were mixed Friday as investors digested uneven trading on the U.S. economy and oil prices that remained near records. Japan posted its 12th straight day of losses, while major indices in Europe all fell in early trade.

In Asia, Indonesia's main index rebounded after selling off nearly 4 percent the prior session. Hong Kong and Australia equities also wee higher.

With stocks hit hard recently, some investors were returning to the market. Others who bet on falling prices were starting to take profits, further supporting prices.

"Investors are still bearish, we've been down a lot in the past few weeks. But even those bears are a bit hesitant on selling at this level," said Y.K. Chan, fund manager at Phillip Capital Management in Hong Kong.

Elsewhere, markets in mainland China, South Korea and Malaysia lost ground. European markets also dropped in early trade: Britain's FTSE 100 fell 0.7 percent, German's DAX lost 0.4 percent and France's CAC-40 slid 0. percent.

Investors got little guidance from the U.S. overnight after a mixed assessment on the world's largest economy. While the country's service sectors shrunk, a tame jobs report eased some
worries about the labor market.

Oil continued trading at lofty levels, however, with a barrel of light, sweet crude for August delivery trading near US$145 late afternoon in Asia. The contract hit a record trading high at
$145.85 a barrel Thursday on the New York Mercantile Exchange.

In Tokyo, the benchmark Nikkei 225 Stock Average ended 0.2 percent down at 13,237.89 points. The index has shed more than 8 percent of its value over the 12-day fall - the longest losing streak since the index stumbled 15 straight sessions in 1954.

The market was dragged down by selling in property firms amid reports of credit fears. Weakness in paper marks, retailers and power companies also pulled the market lower.

Oji Paper Co. and Nippon Paper Group Inc. both fell after Deutsche Securities said the companies' earnings could miss projections owing in part to their "optimistic outlook on crude oil prices."

Hong Kong's blue-chip Hang Seng Index cubed nearly 0.9 percent to 21,423.82 points.

Financials help lift the market amid reports that Industrial and Commercial Bank of China, the country's biggest lender, expected net profit to rise 50 percent in the first half. ICBCclimbed 2 percent. Standard Chartered was up 4.2 percent.

Telecoms, seen y some analysts as a safer play during periods of high inflation, rose. China Netcom was up almost 4 percent and its suitor, China Unicom, gained 2.1 percent.

Hong Kong rose despite weakness in mainland China, where the key Shanghai index skidded 1.2 percent to 2,669.89 points.

Chinese coal shares fell on fears of a possible coal resource tax revenue plan, which could be announced this weekend.

One of the day's worst-hit stocks was coal producer China Shenhua Energy Co., which closed down 8.1 percent. China Coal Resources dropped 7.9 percent. Xishan Coal and Electric Corp. plunged by 10 percent, the dail limit.

Most institutional investors remain worried about the big picture, said Fan Zejie, an analyst for Shanghai Leading Investment and Consulting Co. Ltd.

"There are too many uncertainties in the next half-year, like inflationary pressures brought by natural disasters, the management of non-tradeable shares and the high production prices of raw materials," Fan said.

In Indonesia, the Jakarta composite index was up 0.7 percent, led by coal companies and banks.

The dollar was virtually flat against the yen at 106.75.

U.S. financial markets will be closed Friday for the country's Independence Day holiday.(**)

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