Asian markets end lower, but Shanghai outperforms

Dow Jones Newswires/Singapore
Asian shares ended mostly lower yesterday though China shares managed to rise a tad on demand for consumer stocks ahead of October’s National Day holiday.
“Consumer stocks will continue to attract interest as China enters Golden Week in October, which usually has higher sales than other months,” said Jacky Zhang, an analyst at Capital Securities. China’s National Day holiday is from October 1 to October 8.


The Shanghai Composite Index finished 0.2% higher, while Australia’s S&P/ASX 200, South Korea’s Kospi Composite and Taiwan’s Taiex all dropped 0.3%.
Hong Kong’s Hang Seng Index fell 0.7% and Thailand’s SET dropped 0.1%, though there was some relief that the weekend rally by protesters loyal to former Prime Minister Thaksin Shinawatra ended peacefully. New Zealand’s NZX-50 finished 0.4% higher. Dow Jones Industrial Average futures were 59 points lower in screen trade.
Markets in Japan, India, Malaysia, Singapore, Indonesia and the Philippines were closed for public holidays.
Analysts said investors were looking toward tomorrow’s Federal Reserve meeting for hints on the direction of US monetary policy.
“There is a growing nervousness across a number of asset classes that perhaps the Fed may soon start to clearly signal they will start withdrawing some of the stimulus that has been in the system now for well over a year,” said Benjamin Pedley, managing director of LGT Investment Management in Hong Kong. “If that were the case, it would be a catalyst for a decline in equity markets and a bit of rally in the US dollar.”
Resource stocks were generally lower after London Metals Exchange copper fell 3.3% on Friday. In China, Yunnan Copper fell 0.8% and Baoshan Iron & Steel was down 2.5%. In Sydney, BHP Billiton was down 1.6%, while Newcrest Mining fell 2.4%.
But Metallurgical Corp of China Ltd rose in debut trade in Shanghai, finishing at 6.94 yuan, up 28% from its offer price of 5.42 yuan, though off its intraday high of 7.50 yuan.
Guosen Securities analyst Qiu Bo warned the stock could drop soon because of concerns over the company’s fundamentals. “The company’s core business is building steel works but the industry is already facing severe overcapacity,” the analyst said.
Consumer stocks were also strong in China with Beijing Xidan Department Store rising by the 10% daily upside limit to 10.55 yuan and Shanghai Bailian Group gaining 6.7%.
However, news that 10 companies started pre-marketing road shows for their initial public offerings on China’s long-awaited Nasdaq-style board weighed in the morning session.
The companies didn’t provide details in their statements on when their shares will start trading on the growth enterprise market, but analysts said they expect them to make their debuts on the Shenzhen bourse after the week-long National Day holiday.
In South Korea, dry-bulk shipper STX Pan Ocean Co surged 8.2% on news it was in talks for a long-term iron ore shipping deal with Brazilian miner Vale SA. A STX spokesman said the two are expected to conclude the deal by tomorrow and the contract value could reach around 6tn won, or about $5bn.
Foreign investors were helping limit losses in the Seoul stock market. They have been very aggressively buying local stocks recently, before the country’s inclusion to the FTSE Developed Asia Pacific ex-Japan Index took effect yesterday.
“But they are not expected to turn to sellers in the Korean market any time soon,” said Lee Jin-woo at Mirae Asset Securities, amid ongoing expectations of a solid recovery for the Korean economy and local firms’ earnings.

Posted in: Business-Economic,World News