Asian Stocks Mixed in Thin Trade Volumes

Asian stock markets were trading mixed on Tuesday. Volumes were thin due to the absence of a trading lead from Wall Street as U.S. markets were closed for the Martin Luther King Day holiday.

The U.S. earnings period accelerates from Tuesday, with some 57 S&P 500 companies set to report this week.

IBM is scheduled to report results on Tuesday while Google is expected on Thursday. Among financials, Goldman Sachs is expected on Thursday, while Bank of America and Morgan Stanley should report on Wednesday.

Japan’s Nikkei 225 Average [JP;N225  10762.28  -92.7998  (-0.85%)   ]slipped 0.3 percent on Tuesday morning, with exporters hurt by a stronger yen, while investors grew cautious ahead of the earnings season in the United States and Japan.

The dollar dipped as low as 90.51 against the yen, hitting its lowest in four weeks. Investors fret about a stronger yen as it curbs exporters’ profits when they are repatriated.

Honda fell 1.3 percent to 3,325 yen and Toyota Motor retreated 1.2 percent to 4,140 yen. Canon shed 1.4 percent to 3,810 yen.

Shares of some companies rose thanks to media reports of positive earnings.

Dowa Holdings jumped 3.2 percent after the Nikkei business daily said the smelter is likely to report an operating profit for the nine months through December, helped by an uptrend in zinc and copper prices.

NEC Electronics also gained, rising 2.1 percent to 793 yen, after the Nikkei business daily reported that the company will likely booked an operating loss of around 8 billion yen ($88 million) in the October-December quarter, roughly half the losses of the preceding quarter and of a year earlier.

Resource-linked shares climbed after metals prices firmed on Monday, with copper up more than 1 percent, gold inching higher and crude prices snapping a five-day losing streak.

Pacific Metals gained 2.2 percent to 687 yen, Mitsui Mining & Smelting rose 1.6 percent to 261 yen and Toho Zinc advanced 2 percent to 467 yen. The market is watching to see how the government will handle the expected bankruptcy filing of Japan Airlines.

The benchmark Nikkei fell 27.74 points to 10,827.34. It lost 1.2 percent on Monday, after finishing last week at its highest in 15 months.

The broader Topix retreated 0.4 percent to 953.88.

Seoul shares rose on Tuesday with gains led by technology issues such as LG Electronics, but rises were limited as investors remained cautious ahead of key U.S. and domestic earnings.

The Korea Composite Stock Price Index (KOSPI) was up 0.54 percent at 1,721.05 points.

Australian stocks drifted 0.1 percent lower in lackluster trade, as weakness by banking shares offset the gains posted by miners on higher base metal prices.

The benchmark S&P/ASX 200 index [AU;XJO  4861.2  -49.866  (-1.02%)   ] slipped 3.2 points, or 0.1 percent, to 4,907.9, after advancing 0.2 percent on Monday.

Share registry business Computershare jumped 7.7 percent to A$12.34 after it upgraded its earnings outlook, saying first half EPS would be about 20 percent higher than a year earlier.

The major banks, which rallied on Monday on hopes of better earnings and further consolidation in wealth management, were down between 0.2 percent and 1.2 percent, with Commonwealth Bank of Australia leading losers with a 1.2 percent drop to A$57.33.

BHP advanced 0.7 percent to A$43.76 as commodities prices improved. The company will releases fourth-quarter production data on Wednesday.

Hong Kong’s benchmark Hang Seng Index was flat at 21,431.9 points in early trade, after hitting a near three-week low in the previous session.

One stock on the move was Xiwang Sugar. Its shares sank 13.22 percent to the lowest
level in more than two weeks and was the top percentage loser in Hong Kong. The company said it would sell 120 million new shares to its controlling shareholder at HK$2.51 each.

The sale price represents a 16.05 percent discount to Monday’s closing price. The controlling shareholder had completed a sale of 135 million existing shares at the same price to third-party investors.

Orient Overseas (International) Ltd (OOIL) jumped 10.68 percent after the company said it had sold Chinese property projects to Singapore’s CapitaLand for $2.2 billion as it seeks to raise cash and focus on its core shipping business.

Taiwan stocks gave up opening gains to slip 0.9 percent, as major tech firms slipped on investor fears that the bourse may have been overbought following recent gains.

Taiwan stocks have risen more than 7 percent since the beginning of December last year, climbing faster than some of its regional peers such as Shanghai and Hong Kong, raising fears that some stocks may now be overvalued.

“Taiwan stocks have risen too much, and profit taking pressure is emerging, especially in the electronics sector,” said Tu Jin-lung, chairman with Grand Cathay Investment Services.

The Taiwan stock market is now the 10th-best performing stock market among 30 tracked by Thomson Reuters so far this year, outpaced only by South Korea and Japan within Asia.

AU Optronics, the world’s No. 3 flat-panel maker, was down 1.5 percent and smaller rival Chi Mei Optoelectronics slid 1.48 percent, with the optoelectronics sub-index 0.79 percent lower.

Other major tech plays also slipped, with Quanta Computer down 1.26 percent and smaller rival Compal Electronics down 1.85 percent. The broader computer and peripherals
sub-index was down 0.79 percent.

TMSC, the world’s largest contract chipmaker, traded flat after the company’s chairman said its research and development expenses are expected to climb 25 percent this year, driven by returning demand for tech products.

Cathay Financial, the island’s biggest listed financial holding firm, bucked the trend. Its shares advanced 2.54 percent, on a newspaper report that ICBC would take a 50 percent stake in the firm’s Shanghai life insurance unit.

The TAIEX shed 74 points to 8263.6, after rising to 8,387.66 earlier. The key index lost 0.23 percent in the previous session.

In Southeast Asia, Singapore’s Straits Times Index edged down 0.17 percent while Malaysia’s KLCI traded a notch higher at 0.16 points at 1,300 points.

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