Tokyo Slides On Soft Outlook; Seoul Hit By Rate Hike
Asian stocks traded on a mostly weaker note Thursday, with Japan's Nikkei 225 leading the region lower on concerns about the economic outlook after the government downgraded its view on the economy.
Shares in South Korea dipped after the Bank of Korea on Thursday raised it base lending rate by a quarter-point to 5.25%, noting the highest inflation in a decade remains at the forefront of its concerns even though economic growth is decelerating.
The central bank's Monetary Policy Committee noted in a statement economic activity had slackened, but inflation looks set to "remain significantly high for quite some time."
South Korea's Kospi index fell 1.5% to 1,554.33.
"The Bank of Korea is focused on maintaining its credibility as an anti- inflation fighter, and wants to ensure that expectations do not get de-anchored, " wrote Lehman Brothers analyst Young Sun Kwon in a research note Thursday.
Lehman's forecasts the Bank of Korea will remain on hold for the rest of the year before cutting rates in the first quarter of 2009.
Banking giant Mitsubishi UFJ Financial Group led declines among Japanese financials, hurt by weaker after-hours results from American International Group in the U.S.
Shares of Mitsubishi UFJ fell 3.4%.
"Financials across the board are looking quite vulnerable," said Ben Collett, head of hedge fund trading at Daiwa Securities SMBC. "As we proceed through each quarter in 2008, these assets being marked to market are going to create balance sheet problems which are still going to need to be plugged."
The Nikkei 225 Average was down 1.4% at 13,072.89, while the Topix index fell 1.9% to 1,253.38.
Technology shares were among the best performers, following expectations- topping results from network equipment-maker Cisco Systems .
Shares of Elpida Memory Inc. advanced as investors responded to Elpida's announcement late Wednesday it will join a $5 billion joint venture in a chip factory in Southeast China. Shares of the DRAM chip maker were up 1%.
Japan's Cabinet office on Wednesday described the economy as "worsening," signaling what may be the end to Japan's longest postwar boom, after the leading coincident index, which tracks various economic data, retreated in June.
Australia's S&P/ASX 200 fell 0.5% at 4,9461.10, and New Zealand's NZX-50 climbed 0.8% to 3,377.15.
Hong Kong's Hang Seng Index rose 0.3% to 22,020.28. The Hang Seng China enterprise Index fell 0.5% to 11,880.38.
Equity and derivative markets in Hong Kong were closed Wednesday after a severe tropical storm brought gale force winds and heavy rains to the territory.
Taiwan's Weighted Price fell 0.1% and China's Shanghai Composite Index was off 0.5%.
Share of oil and gas explorer Inpex Holdings climbed 3.3% after a Japanese broker recommended investors accumulate shares in the firm. Nikko Citi said the energy producer was likely to report strong first-quarter earnings Friday.
Shares of Toyota Motor Corp were down 1.3% ahead of quarterly earnings results due out later in the day.
Shares of Japan Airlines Corp , the nation's largest carrier by revenue, fell 1.4% after reporting a 3.4 billion yen ($31.1 million) net loss for the April- to-June quarter, compared to a 4.29 billion yen loss in the year-earlier period.
Shares of Cathay Pacific Airlines fell 4.6% after the Hong Kong-based carrier Wednesday posted a net loss of $85 million for the first half, its first loss since the SARS epidemic in 2003.
Shares of Samsung Electronics were down 0.9%.
U.S. financial markets ended slightly higher Wednesday, helped by a further retreat in crude-oil prices, a firmer dollar and upbeat sentiment after renewed takeover action in the mining sector.
The Dow Jones Industrial Average closed 40 points higher, the S&P 500 added 4.3 points and the Nasdaq Composite climbed 28.5 points.
Front-month oil nudged up as much as 29 cents to $118.87 a barrel in late- morning Tokyo trading. Crude-oil for September delivery fell 59 cents to close at $118.58 a barrel Wednesday on the New York Mercantile Exchange.
Shares in South Korea dipped after the Bank of Korea on Thursday raised it base lending rate by a quarter-point to 5.25%, noting the highest inflation in a decade remains at the forefront of its concerns even though economic growth is decelerating.
The central bank's Monetary Policy Committee noted in a statement economic activity had slackened, but inflation looks set to "remain significantly high for quite some time."
South Korea's Kospi index fell 1.5% to 1,554.33.
"The Bank of Korea is focused on maintaining its credibility as an anti- inflation fighter, and wants to ensure that expectations do not get de-anchored, " wrote Lehman Brothers analyst Young Sun Kwon in a research note Thursday.
Lehman's forecasts the Bank of Korea will remain on hold for the rest of the year before cutting rates in the first quarter of 2009.
Banking giant Mitsubishi UFJ Financial Group led declines among Japanese financials, hurt by weaker after-hours results from American International Group in the U.S.
Shares of Mitsubishi UFJ fell 3.4%.
"Financials across the board are looking quite vulnerable," said Ben Collett, head of hedge fund trading at Daiwa Securities SMBC. "As we proceed through each quarter in 2008, these assets being marked to market are going to create balance sheet problems which are still going to need to be plugged."
The Nikkei 225 Average was down 1.4% at 13,072.89, while the Topix index fell 1.9% to 1,253.38.
Technology shares were among the best performers, following expectations- topping results from network equipment-maker Cisco Systems .
Shares of Elpida Memory Inc. advanced as investors responded to Elpida's announcement late Wednesday it will join a $5 billion joint venture in a chip factory in Southeast China. Shares of the DRAM chip maker were up 1%.
Japan's Cabinet office on Wednesday described the economy as "worsening," signaling what may be the end to Japan's longest postwar boom, after the leading coincident index, which tracks various economic data, retreated in June.
Australia's S&P/ASX 200 fell 0.5% at 4,9461.10, and New Zealand's NZX-50 climbed 0.8% to 3,377.15.
Hong Kong's Hang Seng Index rose 0.3% to 22,020.28. The Hang Seng China enterprise Index fell 0.5% to 11,880.38.
Equity and derivative markets in Hong Kong were closed Wednesday after a severe tropical storm brought gale force winds and heavy rains to the territory.
Taiwan's Weighted Price fell 0.1% and China's Shanghai Composite Index was off 0.5%.
Share of oil and gas explorer Inpex Holdings climbed 3.3% after a Japanese broker recommended investors accumulate shares in the firm. Nikko Citi said the energy producer was likely to report strong first-quarter earnings Friday.
Shares of Toyota Motor Corp were down 1.3% ahead of quarterly earnings results due out later in the day.
Shares of Japan Airlines Corp , the nation's largest carrier by revenue, fell 1.4% after reporting a 3.4 billion yen ($31.1 million) net loss for the April- to-June quarter, compared to a 4.29 billion yen loss in the year-earlier period.
Shares of Cathay Pacific Airlines fell 4.6% after the Hong Kong-based carrier Wednesday posted a net loss of $85 million for the first half, its first loss since the SARS epidemic in 2003.
Shares of Samsung Electronics were down 0.9%.
U.S. financial markets ended slightly higher Wednesday, helped by a further retreat in crude-oil prices, a firmer dollar and upbeat sentiment after renewed takeover action in the mining sector.
The Dow Jones Industrial Average closed 40 points higher, the S&P 500 added 4.3 points and the Nasdaq Composite climbed 28.5 points.
Front-month oil nudged up as much as 29 cents to $118.87 a barrel in late- morning Tokyo trading. Crude-oil for September delivery fell 59 cents to close at $118.58 a barrel Wednesday on the New York Mercantile Exchange.
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