Europe’s Fiscal Woes Weigh on Asian Stocks

Asian stocks traded mixed on Monday, after U.S. stocks ended almost unchanged, pressured by mixed signals from the U.S. labour market and growing anxiety over fiscal problems in Europe.

The Nikkei Average [JP;XJO  Unavailable  ] hit its lowest in two months below 10,000 at one stage, with exporters such as Sony hurt by a stronger yen, while anxiety over fiscal problems in Europe continued to dent investor confidence.

Kirin Holdings extended losses to slide 5.3 percent to 1,367 yen after the beer maker said it has decided to end merger talks with privately held Suntory, citing differences over how to ensure management independence and transparency in a merged company.

Prior to the news, the stock had ended the morning down 2.5 percent at 1,407 yen.

Panasonic lost 4.6 percent to 1,328 yen after a market analyst said that UBS had downgraded the stock, with additional downward pressure from a stronger yen.

The move came even though the electronics maker on Friday said its quarterly profit jumped more than threefold to the highest level in five quarters as it cut costs and enjoyed robust TV sales, and lifted its outlook to beat market expectations.

Toyota Motor rose after its president apologized on Friday for safety problems and said the automaker would bring in outside experts to review quality controls. But in a sign that its recall woes continue, a dealer said on Sunday that Toyota has decided to recall its new Prius hybrid in Japan to fix a braking software glitch.

Its shares added 0.9 percent to 3,345 yen, in what market players called a rebound, with investors buying on dips.

The benchmark Nikkei was down 0.3 percent at 10,024.58 by mid-day, after falling as low as 9,952.64, its lowest since December 11.

The broader Topix retreated 0.3 percent to 888.80 points.

U.S. stocks ended almost unchanged on Friday after data showing U.S. employers unexpectedly cut 20,000 jobs in January, but the unemployment rate dropped to a five-month low of 9.7 percent.

Sony Corp slipped 1.3 percent to 3,045yen, while Honda Motor declined 0.7 percent to 3,080 yen.

Yamaha Motor fell 3.9 percent to 1,205 yen after it said on Friday it is likely to post a deeper loss than expected for 2009.

Resource-related shares fell after oil slid 2.7 percent on Friday to $71 a barrel in record daily trading volumes for the front month crude contract, while gold fell to its lowest in more
than three months.

Oil and gas field developer Inpex fell 0.2 percent to 661,000 yen, while refiner Nippon Oil shed 1.5 percent to 453 yen.

Seoul Shares Slip

Seoul shares declined with Kumho Petrochemical tumbling amid concerns about the financial health of parent Kumho Asiana Group, while banks also extended losses on worries about Kumho-related exposure.

The Korea Composite Stock Price Index (KOSPI) was down 0.33 percent to 1,561.94 points.

“Sentiment is still fragile amid persisting concerns about Southern European nations, but I think the psychologically significant 1,550 point level will be supported. In fact, if the market hits near that, it may be a buying chance,” said Lee Kyoung-su, a market analyst at Taurus Investment & Securities.

Shares in Kumho Petrochemical tumbled amid worries about parent Kumho Asiana Group, after shares of Kumho Industrial were suspended from trading early Monday on rumours that the company might seek court protection.

Kumho Petrochemical shares were down 7.58 percent to 16,450 won, after dropping to 16,000 won, their lowest since March 2009.

Shares in Asiana Airlines, also a unit of Kumho Asiana Group, fell 4.14 percent. Banking issues also turned lower as worries about their exposure to Kumho Asiana group deepened, analysts said.

Shares in KB Financial Group fell 1.49 percent and Shinhan Financial Group retreated 2.07 percent.

But technology issues rebounded, with Hynix Semiconductor, the world’s No.2 memory chip maker, advancing 3.18 percent and LG Display, the world’s No.2 maker of LCD panels, gaining 3.05 percent.

Shares in automakers also advanced amid the fallout from Toyota’s recalls. Hyundai Motor rose 1.3 percent and Kia Motors gained 1.46 percent.

Australian Stocks Eke Out Gains

Australian stocks rose 0.3 percent, bouncing off a three-month low, as a better-than-expected finish on Wall Street last week spurred bargain hunters to pick up beaten down resource stocks.

Four of Australia’s top companies are due to report results this week: BHP Billiton, Commonwealth Bank of Australia, Rio Tinto and Telstra Corp.

CBA flagged last month that its first-half result would be above what analysts had forecast.

The benchmark S&P/ASX 200 index [AU;XJO  4521.4  7.338  (+0.16%) ] was up 15.9 points at 4,530.0.

Top miners BHP Billiton and Rio Tinto both rose 1 percent, with BHP at A$39.95 and Rio at A$67.24.

CBA rose 0.5 percent to A$52.91 while the other three of Australia’s top four banks were down by up to 0.8 percent.

TV broadcaster Ten Network jumped 9.2 percent to A$1.655 after the federal government said it would slash license fees by a third in 2010 and by half in 2011 for broadcasters who air more Australian shows.

Ten has the biggest pure exposure to TV. Rival Seven Network, which also has newspaper interests, rose 1.9 percent to A$6.85.

Incitec Pivot jumped 2.5 percent to A$3.34 after saying it would resume construction of the Moranbah ammonium nitrate plant in Queensland. It reassured investors the project was still expected to cost A$935 million ($815 million) and it would not need to sell new shares to help fund the work.

Electronics retailer JB Hi-Fi slid 6.6 percent to A$18.77 after saying it expected to achieve a 24 to 27 percent rise in net profit this year. The A$120 million top end of its net profit forecast range was just below analysts’ consensus forecast, according Thomson Reuters I/B/E/S.

HK and Shanghai Retreat

Hong Kong’s Hang Seng Index shed 0.37 percent to 19,592.99 to its lowest level since September, on investor concern over the eurozone debt crisis despite assurances from European finance ministers.

Chinese property developer China Resources Land rose 2.87 percent to a session high of HK$15.04 on news the company will join the benchmark blue-chip Hang Seng Index
on March 8. Its shares held steady at HK$14.82 by mid-day, up 1.37 percent from the previous close.

China State Construction gained 1.9 percent to HK$2.68 after it said it would team with two investors to subscribe for HK$400 million ($51.5 million) of bonds, of which it would subscribe for half. The move will help fund the expansion of its building construction business and
construction-related investments in China.

Shares of high-end fashion group Joyce Boutique sank 11.1 percent to HK$0.20 after it said Allied Wisdom International would take the company private and would buy all outstanding shares it did not already own in Joyce at a discount at HK$0.20 each, for HK$88 million.

Chinese stocks fell in a choppy session amid growing Euro-zone fiscal worries and lingering concerns of further domestic credit tightening.

The key Shanghai Composite Index slipped 0.4 percent to 2926.97 points while the Shenzhen Composite Index lost 0.2 percent at1094.63.

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