Asia Mostly Lower, Toyota Slumps Again

Asian share markets were mostly lower on Thursday, following the sluggish session on Wall Street which saw two of of three major indices finishing in the red.

Japan’s Nikkei average [JP;N225  10318.52 -85.8105  (-0.82%)]fell 0.6 percent by mid-day, weighed down by a slide in Toyota Motor as its recall woes dragged on, though Honda Motor advanced after it lifted annual guidance far above market expectations.

The benchmark Nikkei lost 60.07 points to 10,344.26, after rising 0.3 percent the previous day. The broader Topix retreated 0.8 percent to 908.83.

Toyota shed 3.5 percent to 3,280 yen, extending losses as its unprecedented recall of millions of vehicles with faulty accelerators takes a toll on sales and may force the automaker to cut it 2010 sales forecasts.

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In the latest development in Toyota’s huge U.S. recall, the Obama administration stepped up pressure on the company on Wednesday to address a range of safety issues as investors bolted at signs of a deepening crisis for the world’s largest automaker.

Shares of the automaker, which is set to report third-quarter results after the close of Tokyo markets, have now lost about 30 percent since a recent high on Jan. 21.

Denso, the world’s biggest listed auto parts supplier and an affiliate of Toyota, sank 8.4 percent to 2,474 yen, despite Denso tripling its annual operating profit forecast the previous day.

Other suppliers belonging to the Toyota group also fell. Aisin Seiki dropped 4.9 percent to 2,259 yen and Toyota Auto Body, a car assembler, shed 1.4 percent to 1,552 yen.

Shares of Honda, however, advanced 2.2 percent to 3,210 yen after it lifted annual guidance far above market expectations, with cost cuts driving a jump in quarterly profit, and added that it anticipates further growth next financial year.

Funai Electric fell by its daily limit of 700 yen to 4,005 yen, dropping 14.9 percent, after JP Morgan cut its rating on the TV maker to “neutral” from “overweight”.

October-December results were weaker than expected and a rise in panel prices may slow profit growth in April-September, analyst Yoshiharu Izumi wrote in a note to investors, lowering his price target on Funai to 4,800 yen from 5,800 yen.

Sharp fell 5.4 percent after reporting a smaller-than-expected quarterly profit, reflecting start-up costs at its new display panel plant.

Other Japanese companies set to report results later in the day include Sony, Hitachi and Nikon.

Seoul Stocks Turn Lower

Seoul shares slipped into the red as losses in bank stocks weighed but gains in auto
issues lent support to the market.

Analysts said continued U.S. bank regulation and China tightening worries weighed on sentiment, and were likely to keep the market within a tight range for remainder of the week.

“The auto sector is doing singularly well, but other than that, broader appetite for shares is weak amid existing concerns about U.S. and China risks,” said Chung Myoung-gi, a market analyst at Samsung Securities.

U.S. President Barack Obama pressed Democratic lawmakers on Wednesday to redouble their efforts to pass healthcare and financial regulatory reforms.

The Korea Composite Stock Price Index (KOSPI) was down 0.09 percent to 1,613.55 points  by mid-day.

Banks declined across the board, after the U.S. S&P Financial index shed 1.35 percent.

KB Financial Group, the holding firm of South Korea’s top commercial lender Kookmin Bank, fell 2.11 percent. Hana Financial Group lost 1.81 percent.

But auto issues rallied as stocks of Japanese rival Toyota continued to struggle amid a deepening crisis from its massive recall. Hyundai Motor was up 3.57 percent and Kia Motors
advanced 2.68 percent.

Samsung Electronics rose 0.13 percent after the world’s No.2 handset maker said it aimed to treble its smartphone sales by volume this year, with new models supporting various operating systems.

“Samsung Electronics has been lagging Apple and Motorola in the smartphone business, and today’s statement reaffirms its aims to tackle the smartphone industry seriously,” said Seo Do-won, an analyst at Hanwha Securities.

S&P/ASX 200 Slips As Retailers Drag

Australian stocks declined 0.6 percent, with major retailers hit after poor December retail sales figures.

The S&P/ASX 200 [AU;XJO  4621.6  -26.289  (-0.57%)] fell 28.6 points to 4,619.3. The index gained 0.9 percent on Wednesday.

The nation’s largest department store, Myer Holdings, was down 3.9 percent at A$3.25, while rival David Jones slid 3.3 percent to A$4.77

Australia’s largest gaming group, Tabcorp Holdings, fell 0.6 percent to A$7.01 after it reported a 2 percent drop in first half net profit and warned conditions remained uncertain in 2010.

Building materials and sugar conglomerate CSR fell 7.6 percent to A$1.70 after a court rejected its demerger application on the basis of outstanding asbestos liabilities.

Shares in Karoon Gas dived more than 30 percent to A$4.51 after it reported disappointing drilling results from a key exploration well off the West Australian coast.

HK Loses 1.4%

Hong Kong shares snapped three days of gains on Thursday, with the benchmark Hang Seng Index down 1.4 percent to 20,423.9 points.

Investors took profit after Wall Street stocks ended nearly flat and Bank of China fell on its plan to sell debt.

Bank of China slid 1.56 percent on reports that China’s biggest foreign exchange lender planned to issue 25 billion yuan ($3.7 billion) in subordinated bonds.

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Chinese computer maker Lenovo Group tumbled 6 percent on profit taking ahead of its results announcement today, dealers said. The stock ended up 5.19 percent on Wednesday.

Shares of Kiu Hung Energy outperformed the broader market. It rose 6.45 percent as investors cheered news that its unit had signed a memorandum of understanding to buy a company with three exploration licences for three mining sites in Mongolia.

Dore Holdings surged 11.76 percent after the company said it had signed a memorandum of understanding to pay HK$200 million for a firm with an interest in an agreement that allows it to receive $6 per tonne of iron ore shipped or sold by mines located in Seluma Bengkulau, Indonesia.

Singapore’s Straits Times Index fell 0.6 percent while Malaysia’s KLCI edged down 0.1 percent at 1,265.5 points.

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