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Banks lift Hong Kong, utilities hurt Tokyo(Baystreet Foreign Markets Wrap (Canada) Via Acquire Media NewsEdge) Bank shares led a rebound in Hong Kong Thursday on hopes an interest rate increase by the Chinese central bank the previous day may be its last this year, while a sharp decline for utilities helped Japanese stocks snap a seven-day winning streak. In Japan, the Nikkei 225 average settled 11.34 points, or 0.1%, to 10,071.10 Hong Kong's Hang Seng Index regained 12.63 points, or 0.1%, to 22,530.20 In Hong Kong, Chinese banking shares led the advance after the People's Bank of China lifted benchmark deposit and lending rates by a quarter-point late Wednesday. The rate hike "underscores Beijing's confidence in the resilience of its economy and its continued resolve to check inflation," said economists at HSBC, who are in a camp that believes China won't raise interest rates again this year. The PBOC may however raise bank reserve requirement ratio a couple of times more this year to drain out inflation-stoking excess liquidity, HSBC added. Shares of Industrial & Commercial Bank of China Ltd. advanced 0.2%, while Bank of Communications gained 1.2% in Hong Kong. For the banking sector specifically, the latest hike is the most positive for earnings in the current interest-rate cycle, being completely symmetric -- with deposit and interest rates increased by the same amount -- Citigroup analysts said. Shares of Japanese utilities came under selling pressure after the Nikkei newspaper reported that nuclear power plants, which have been offline since the March earthquake, may not restart this summer as the government was considering stress tests for the power plants. Shares of Kansai Electric Power Co. plunged 8.4%, and Chubu Electric Power Co. gave up 7%. Tokyo Electric Power Co. which has lost almost 80% of its value since the start of the year, traded down 3.4%. Auto makers were also lower in Tokyo trading on another Nikkei report that Japan's top seven car makers are likely to post their first combined drop in consolidated net profit, with the total projected to fall 35% in the fiscal year in the wake of the March earthquake. Honda Motor Co. fell 0.9% and Toyota Motor Corp. dropped 0.7%. South Korean stocks edged higher, with Hyundai Cement Co. soaring 14.9% as news that Pyeongchang will host the 2018 Winter Olympics raised hopes for construction-related opportunities. The market gains, which were also aided by strong foreign investor buying, came despite a 2% fall in shares of Samsung Electronics Co. after the company said it expects second-quarter operating profit to fall 26% from a year earlier. Samsung said its liquid crystal display business likely posted a second straight quarterly loss due to slumping demand for televisions and personal computers. In Sydney, shares of News Corp. fell 3.6% in Sydney, after its U.S.-listed shares lost almost 4% in Wednesday's session. The losses follow an announcement by the U.K. government that it will investigate allegations of hacking into the mobile-phone voicemail of a murdered 13-year-old schoolgirl by the News of the World tabloid newspaper. Companies, including Ford Motor Co. and General Motors Co., have suspended advertising in the newspaper pending a police investigation into the matter. CHINA Stocks in Shanghai were also resilient for a large part of the session, but came under selling pressure in afternoon trading amid worries that Beijing may not relax its monetary stance. Shanghai's CSI 300 Index shaved off 12.03 points, or 0.4%, to 3,101.68 ICBC lost 1.4% and Bank of Communications slipped 0.2%. In other markets; Korea's Kospi Index gained 9.40 points, or 0.4%, to 2,180.59 Taiwan's Taiex Index lost 51.02 points, or 0.6%, to 8,773.42 Singapore's Straits Times Index added 11.16 points, or 0.4%, to 3,125.87 New Zealand's NZX 50 Index faded 0.27 points to 3,460.56 Australia's S&P/ASX 200 Index inched ahead 0.50 points to 4,605.50 © 1998 - 2011 Baystreet.ca Media Corp. All rights reserved. |