Asian Markets Mostly Trading Lower

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RTTNews - With weak employment data denting hopes of a revival of the economy, U.S. stocks tumbled on Thursday, setting off a negative start in the markets across the Asia-Pacific region on Friday. Though a few markets are off their morning lows, the mood still remaining quite bearish in the region.

The Australian market started off on a dismal note with key miners plunging sharply on selling pressure. Stocks from banking, energy and healthcare sectors also took a beating this morning. Notwithstanding a few positive reports like the expansion of services sector in June and higher vehicles sales, the market remains deep down in the red at present.

Shares of miner BHP Billiton are down sharply in the red. The stock is currently trading lower by as much as 2.7% on selling pressure. BHP Billiton has announced that it will sell its Yabulu nickel refinery in Queensland for an undisclosed sum and will book US$675 million (A$853.57 million) in writedowns on the sale. BHP Billiton will writedown the carrying value of Yabulu by an estimated US$500 million (A$632.27 million) and by a further US$175 million of unrecoverable tax benefits. The refinery is being sold to companies wholly owned by Professor Clive Palmer and is due to be finalized by the end of this month.

Rio Tinto is under a trading halt as it seeks to subscribers for a shortfall in its Australian rights issue. Rio said it had attracted 94.76% take up of the new shares it offered as part of a 21 for 40 rights issue, totaling 142,149,887 shares. The Australian leg of the issue raised A$4.02 billion. As part of their underwriting obligations, JP Morgan and Macquarie are seeking subscribers for the remaining 7,865,410 new shares offered through the Australian-listed Rio entity, by way of a bookbuild to be undertaken on Friday.

Sims Metal Management Limited, the world's largest listed metal and electronics recycling company, announced today the acquisition of the assets of Fairless Iron & Metal, LLC in Morrisville, Pennsylvania on the East Coast of the United States. Fairless, a full-service ferrous and non-ferrous recycler, operates two principal facilities including a state-of-the-art mega-shredder, non-ferrous recovery systems and a deep-water port export facility. Fairless processes approximately 60,000 tons of scrap metal per month sourced principally from New Jersey, New York, Eastern Pennsylvania and the inland United States via rail. The Sims Metal Management stock is currently trading lower by 2%.

According to a release from the Federal Chamber of Automotive Industries, new car and track sales topped 100,000 in June as the Australian vehicle market showed signs of recovery. Though the figure was down by around 3.5% compared to the same month last year, it was the third highest monthly total on record.

The benchmark Australian index S&P/ASX 200, is off its low of 3,807, but is still trading in the red at 3,825, down by around 52 points from its previous close. The broader All Ordinaries index is down by over 50 points at 3,925.

In Tokyo, the Nikkei was down by 101.32 points or 1.03% at 9,774.83 at the end of the morning session today. Earlier, after opening at 9,752, it had drifted down to 9,691 on heavy selling in stocks across various sectors.

Bank stocks were mostly trading lower. Sumitomo Mitsui Financial, Shizuoka Bank, Sumitomo Trust and Banking, Chiba Bank, Chuo Mitsui Trust Holdings, Resona Holdings, Mitsubishi UFJ Financial, Bank of Yokohama, Fukuoka Financial and Mizuho Financial Group and Mizuho Trust & Banking were down by 2% - 4%.

Shares of other financial services and insurance firms were mostly trading in the red this morning. Chemicals, pharmaceuticals, foods, machinery, steel and non-ferrous metals also exhibited weakness.

Automobile stocks Honda Motor, Suzuki Motor, Toyota Motor, Hino Motors, Nino Motor and Mazda Motor traded weak.

Shares of drug maker Eisai Co. fell sharply after the company announced that it has received notice from the U.S. Food and Drug Administration denying the drug maker's request for a clinical test possibly leading to pediatric exclusivity status for Aricept, the firm's best-selling Alzheimer's treatment. If it had obtained additional FDA approval for the children's version, Eisai intended to extend its U.S. patent of the drug, which expires in November 2010. The stock was trading lower by over 4% at the break.

Seven & I Holdings Co. declined sharply following a sharp 28% year on year drop in net profit to 23.6 billion yen in the March-May quarter. The firm's sales declined 11% to 1.24 trillion yen.

Hoya Corp is trading higher for the fourth straight day on reports that the maker of optical lenses and eyeglasses likely posted a 7-9 billion yen group operating profit in the April-June term, the first positive figure in two quarters. The stock is up by around 1.5% at present.

After opening sharply lower, the Korean market has regained some lost ground with traders indulging in a bit of bargain hunting in technology and automobile stocks.

The KOSPI, which had slipped to 1,389 in early trading, is currently down by around 3 points at 1,408.

Technology stocks Hynix Semiconductor and LG Display LCD are trading higher. Automobile stock Kia Motor is edging up modestly. Ssangyong Motors and Hyundai Motors are off their lows but are still seen trailing their previous closing levels by 1.8% and 1% respectively.

Oil and energy stocks are trading weak. Steel majors Hyundai Steel and POSCO are also trading lower. Airliners Korea Airlines and Asiana Airlines are also exhibiting weakness. Shipbuilders are exhibiting a mixed trend.

In the banking space, Korea Exchange Bank, Woori Finance and KB Financial Group are trading lower by 1.3% - 1.8%. Bucking the trend, Shinhan Financial is edging up modestly.

Among other markets in the Asia-Pacific region, Hong Kong, Indonesia, New Zealand and Singapore are down with notable losses. Taiwan has rebounded into positive territory, recording modest gains.

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