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Date Posted: 21:17:12 12/14/10 Tue
Author: 15/12/2010 3:07PM
Subject: [Info] UPDATE:Asian Shares Fall;Weak Manufacturing Outlook Hurts Tokyo
In reply to: Fed meeting overnight===Fish livestock clear station 's message, "sell 268===Wednesday 15/12/2010==morning pre open" on 14:59:34 12/14/10 Tue

UPDATE:Asian Shares Fall;Weak Manufacturing Outlook Hurts Tokyo
15/12/2010 3:07PM

(Adds information, quotes, updates/adds market levels)

By Shri Navaratnam and Ga-Woon Philip Vahn

Of DOW JONES NEWSWIRES

SINGAPORE (Dow Jones)--Asian stock markets were mostly lower Wednesday, with shares in Japan weighed by a report showing a weak outlook for the country's manufacturing sector.

Japan's Nikkei Stock Average was flat, Australia's S&P/ASX 200 rose 0.2% to 4774.8, and South Korea's Kospi Composite was down 0.1% at 2007.65.

The Shanghai Composite Index was down 0.3%, while Hong Kong's Hang Seng Index lost 0.6%, Taiwan's main index fell 0.1% and India's Sensex lost 0.2%. Dow Jones Industrial Average futures were 15 points lower in screen trade.

Trading volumes were generally thin across the region, suggesting that the selling pressure was mild, while losses were limited as Wednesday's gains on Wall Street and strong U.S. retail sales data.

Some market watchers said the rise in U.S. Treasury yields suggested investments will increasingly shift into riskier assets.

"It just feels to me that everything is falling into place for a very positive cyclical/growth/'risk on' environment next year, but I remain of the view that very few institutional investors are truly positioned for what we think is building," said Southern Cross Equities director Charlie Aitken in Sydney. "This is becoming a huge event in U.S. bonds and the yield curve, with the bond bubble clearly burst and the yield curve driving investors out of bonds into cyclical equities and commodities."

In Sydney, the benchmark S&P/ASX 200 index touched a five-week high of 4781.9 in earlier trade.

Bank stocks were mostly higher, with Westpac up 0.7% and National Australia Bank up 0.7%, while resources plays were underperforming with BHP Billiton off 0.6%.

Crane Group was up 20% at a seven-month high of A$9.18 after New Zealand's Fletcher Building launched an offer to buy Crane Group for one Fletcher Building share and A$3.43 in cash for each Crane share.

Origin Energy shares rose 1.7% after the company said Wednesday it will acquire Integral Energy and Country Energy's retail businesses and enter into an arrangement with Eraring Energy's power stations for A$3.25 billion in the privatization of power assets in New South Wales.

The Tokyo market was slightly lower, weighed by the Bank of Japan's tankan survey for December. It showed that sentiment among big manufacturers deteriorated for the first time in seven quarters, although the outcome was slightly better than economists' expectations.

"The (tankan) result is mostly within expectations, but it shows corporate managers have quite a severe view on the outlook," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Toyota Motors was up 1.1%, while Sony was off 0.4% and Sharp fell 1.2%.

Otsuka Holdings rose on its debut, with its shares trading at Y2,199, up 4.7% from its initial public offer price of Y2,100. The pharmaceutical concern's recent $2.3 billion IPO is the largest drugmaker IPO in the world on record, and ranks among Japan's biggest share offers.

The Shanghai market traded in a tight range as the year winds to a close, with some property and construction-related stocks falling on profit-taking after their recent gains. China Vanke fell 1.4%, Poly Real Estate lost 2.5% and Anhui Conch Cement was down 2.3%.

"The Shanghai Composite has been consolidating around its 30-day moving average of 2927," said Wang Fan, an analyst at Donghai Securities. "We think the market will stay in the consolidation mode for another day or two and then will head higher to test 3000," he added.

In Seoul, investors were cautious about pushing the market further up after the main index rose to a 37-month high on Tuesday.

"It is a whole new era (for the stock market) after breaking above 2000 (Tuesday), and investors might be posing a question about its pace," said Han Beom-ho, an analyst at Shinhan Investment Corp.

Shipyard stocks supported the market after Hyundai Heavy Industries on Tuesday inked a $1.45 billion container vessel contract with a German company to build 10 container vessels. Also, Daewoo Shipbuilding & Marine Engineering received a $1 billion order for military ships and technology transfers from a Southeast Asian country.

Hyundai Heavy rose 2.0% and Daewoo Shipbuilding advanced 2.8%.

Electronics exporters were leading losses in Taiwan on concerns the new Taiwan dollar's recent strength will hurt their gross profit margins. The U.S. dollar hit a 13-month low of NT$29.890 late Tuesday in Asian trade.

Among heavyweight tech companies, Hon Hai fell 0.4%, HTC lost 1.4% and Compal was down 1.0%.

Elsewhere in the region, New Zealand's NZX-50 was 0.4% higher, Philippine shares were up 0.7%, Malaysian shares gained 0.4%, while Singapore's Straits Times Index was flat and Thai shares fell 0.2%.

The U.S. dollar was supported against the euro and the yen after a volatile session on Tuesday as stronger-than-expected U.S. data and jitters ahead of the Fed decision buffeted the greenback.

With the Fed retaining its plan to buy $600 billion of bonds, dollar-bulls took heart from rising Treasury yields and expectations for an improved U.S. economic outlook.

"Beyond the Fed, we finally have some decent economic data to chew over, and they have been running better than expected with U.S. retail sales surprising to the upside," said Khoon Goh, senior economist at ANZ Bank in Wellington. "Perhaps the U.S. consumer is finally starting to open up their wallets. Markets certainly took this positively, sending equities higher and bond prices lower."

The single currency was fetching $1.3342 against the U.S. dollar, from $1.3382 late Tuesday in New York, and Y111.87 against the yen from Y111.94. The dollar was at Y83.84, compared with Y83.65.

Lead Japanese government bond futures were down 0.80 at 138.35 points, on weak U.S. Treasurys on Tuesday and the slightly better-than-expected tankan survey. The yield on 10-year cash JGBs was up four basis points at 1.285%.

Spot gold was at $1,394.90 per troy ounce, down 90 cents from its New York close on Tuesday. January Nymex crude oil futures were down 54 cents at $87.74 per barrel on Globex.

-Shri Navaratnam, Dow Jones Newswires; +65-6415-4140; shri.navaratnam@dowjones.com

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(END) Dow Jones Newswires

December 14, 2010 23:07 ET (04:07 GMT)

Copyright (c) 2010 Dow Jones & Company, Inc

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