Barefoot Investor: Asia Trades Lower as Europe Woes Linger

Asian stocks traded softer on Tuesday, as investors feared Ireland's debt crisis could spread, raising the specter of losses by exposed U.S. banks.

The main Wall Street indices fell as initial optimism over Ireland's debt bailout gave way to concerns about the government's future and problems elsewhere in the euro zone. But tech stocks gained some reprieve as the tech-heavy Nasdaq bucked a weaker trend, helped by broker upgrades for chipmaker SanDisk and chip-gear makers Amkor Technology and Teradyne.

North Korea on Tuesday afternoon reportedly fired dozens of artillery shells at a South Korean island. News of the shelling kept equity markets on edge and weighed on the won currency.

The FTSE CNBC Asia 100 Index [.FTFCNBCA 6593.54 -131.87 (-1.96%)] slipped 0.2 percent. Trading was subdued with Japanese financial markets closed for the Labor Day national holiday.

Seoul shares dipped 0.7 percent amid growing European debt worries and as investors wait to see how U.S. Thanksgiving holiday sales turn out.

The Korea Composite Stock Price Index (KOSPI) [.KS11 1944.34 --- UNCH (0)] was down 15.4 points at 1,928.9.

Declines in auto stocks weighed on the market. Hyundai Motor lost 3.0 percent, on concern deepening labour disputes could lead to production disruption at the country's largest automaker. Its affiliate Kia Motors shed 1.5 percent.

Ssangyong Motor gave up early gains and finished 4.5 percent lower after India's Mahindra & Mahindra signed a deal to buy the money-losing automaker for 522.5 billion won ($464 million).

But financials advanced broadly, led by Hana Financial. Its shares jumped as much as 12 percent before trimming gains to end 5.7 percent higher, on news the country's No.4 financial group by assets has decided to buy a controlling stake in Korea Exchange Bank (KEB) for $4.1 billion.

Analysts said a Hana-KEB combination was expected to benefit Hana as KEB had little overlaps with Hana in terms of business strength.

Technology issues advanced, with LG Electronics, the world's No.3 handset maker, gaining 0.4 percent. Shares in LG Display, the world's No.2 flat panel maker, advanced 1.8 percent.

A 1 percent gain in the Baltic Dry Index, which tracks the cost of shipping key commodities, boosted shipping issues. STX Pan Ocean added 1.2 percent and Hyundai Merchant Marine rose 0.7 percent.

Australian stocks eased 1.2 percent to a seven-week low, undermined by offshore concerns about euro zone debt and weakened Chinese demand for metals.

Banks and miners led the way lower, with Westpac down 1.9 percent at A$21.31 and National Australia Bank losing 1.8 percent at A$23.56.

Top miner BHP Billiton retreated as copper prices fell in Shanghai, with the shares down 1.7 percent to A$43.14.

On its second day of trading, rail-freight business QR National extended gains that it had made on debut, rising 0.4 percent to A$2.66. Its debut on Monday was underpinned by support from offshore hedge funds.

The benchmark S&P/ASX 200 index [AU;XJO 4589.068 -54.464 (-1.17%)] fell 54.4 points to 4,589.1, its lowest close since October 1, and breaking through support at 4,600. The index rose 0.3 percent on Monday.

Shares in grocery wholesaler Metcash rose 0.7 percent after the company said it would proceed with its takeover of the struggling Franklins supermarket chain, challenging opposition from the competition regulator.

Qantas shares settled 0.4 percent higher after the airline said it would resume flying its Airbus A380 fleet from Saturday. Its A380 fleet has been grounded since Nov 4 when an engine partly disintegrated in flight.

Ten Network shares lost 3.3 percent after Australia's richest woman, Gina Rinehart, emerged as a 10 percent shareholder, just a month after billionaire James Packer snapped up an 18 percent stake in the free-to-air TV network.

China's Shanghai Composite extended Monday's losses, slumping nearly 2 percent [CN;SHI 2828.2822 -56.0888 (-1.94%)] as miners, property and financial stocks dragged.

Poly Real Estate lost 1.9 percent and Vanke fell 1.4 percent.

Property developers underperformed amid reports that some Chinese trust firms have halted property-related loans after the country's banking regulator ordered trust firms to submit risk, compliance reports on such lending.

Among lenders, Agricultural Bank of China fell 1.1 percent and China Everbright Bank declined 1.8 percent.

Resource-linked stocks also headed south, with Jiangxi Copper down 4.9 percent and Zhongjin Gold slipping 3.0 percent.

Taiwan's key TAIEX share index [.TWII 8328.63 22.5098 (+0.27%)]back tracked from early gains to end down 0.55 percent at 8,328.63, following a decline in Chinese shares.

Tourism shares led declines, down 1.88 percent, chemicals fell 1.6 percent. The electronics sub-index lost 0.5 percent and the financial sub-index shed 0.8 percent.

Hong Kong stocks retreated 2.5 percent at one stage, as selling gathered pace following reports of tensions on the Korean Peninsula.

The benchmark Hang Seng Index[HK;HSI 22896.14 -627.88 (-2.67%)] slumped 572 points to 23,952.7.

Local developers extended losses after the government last week unveiled measures aimed at curbing fast-rising property prices. Cheung Kong lost 1.0 percent and Henderson Land fell 1.8 percent.

BaWang International Group slumped 3.9 percent after the Chinese herbal products maker and trader issued a profit warning, saying turnover for July to October dropped by 31 percent from a year earlier.

Oriental Watch slipped 4.6 percent. The watch trader said it was raising funds through the issuance of 50 million shares at a discount.

Shares of Li & Fung fell 1.6 percent on news the global consumer goods exporter would buy most of the assets of Oxford Apparel, adding to its U.S. onshore menswear platform. Its shares had gained more than 2 percent on Monday.

In Southeast Asia, Singapore's STI [.FTSTI 3140.3 -50.62 (-1.59%)]and Malaysia's KLCI [MY;KLCI 1491.43 -11.77 (-0.78%)] tracked the region's bourses lower.

Thailand's benchmark SET [TH;SETI 1019.19 --- UNCH (0)] lost 0.9 percent in tandem with the weak performance in other Asian markets.

Shares in Thai telecoms group Shin Corporation fell more than 8 percent to a two-week low as the stocks traded ex-dividend.

PTT Exploration and Production was in focus. It signed an agreement with two Canadian subsidiaries of Statoil ASA to buy a 40 percent stake in an oil project in Canada for $2.28 billion.
(Source: Reuters with CNBC)


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