Asia’s declines bring out bargain hunters

Asia-Pacific equities were mixed on Friday, as some investors snapped up bargains after days of declines, but the mood was still extremely cautious as worries about the US economy and surging oil prices eating into company profits were still at the forefront of investors’ minds.

The Nikkei 225 slid for the 12th day, heading towards its longest losing streak since 1954. The longest consecutive days of losses was 15 days in 1954. The stock index was recently down 0.5 per cent at 13,193.64, while the broader Topix slid 0.5 per cent to 1,291.99.

While sentiment in Japan is far from good, many analysts point out that the losing streak has been of relatively small margins each day, often below half a percentage point.

Technology and equipment making shares fell amid concern over the economic outlook. Advantest lost 1.8 per cent to Y2,180, while Tokyo Electron was down 2.4 per cent at Y5,810. TDK slid 2 per cent to Y6,350.

The dollar strengthened overnight as payroll data, while negative, provided some relief as there had been concerns that the statistics could have been worse. The yen’s maintained a weaker trend into Asian trading, recently changing hands at Y106.73. It did little to comfort investors in export stocks.

Honda lost 0.8 per cent to Y3,560, while Toyota fell 0.4 per cent to Y4,890 and Nintendo dropped 0.3 per cent to Y61,000.

One cheery stock was Komatsu, a maker of earth-moving equipment, gained 1.8 per cent to Y2,820 after a local report that the company was likely to post a 7 per cent gain in operating profit to a record in the April-June quarter.

Australian stocks staged a minor rally having sagged close to a two-year low on Thursday, with investors picking up stocks considered oversold. The S&P/ASX 200 gained 0.8 per cent to 5,036.7, with BHP Billiton shares edging up 1.3 per cent to A$40.34, and Rio Tinto gaining 2.3 per cent to A$124.71.

Babcock & Brown Power surged 11 per cent to A$0.73 after it agreed to sell its Uranquinty Power Station to Origin Energy, enabling it to use the proceeds to reduce debt. Origin Energy dropped 1 per cent.

Over in Hong Kong, shares gained 1.3 per cent to 21,524.24, while the index of mainland shares traded in the territory rallied 1.8 per cent to 11,342.67.

The Industrial and Commercial Bank of China provided the market with some cheer after it said preliminary earnings calculations for the first half suggest profit jumped more than 50 per cent compared with last year. Shares rallied 2.4 per cent to HK$5.13. HSBC led the market higher with a 1.2 per cent gain to HK$119.

Cathay Pacific continued its downward slide after issuing a profit warning on Wednesday. The stock fell for a third day, losing 2 per cent to HK$1356.

Shanghai shares dropped 0.5 per cent to 2,689.419, putting an end to the brief two-day gain, as metal-related shares, which had posted large gains on Thursday, were sold off on profit taking. Aluminium Corp of China slid 3.8 per cent to Rmb13.29 and Jiangxi Copper lost 2.2 per cent to Rmb24.95. Ping An Insurance continued its descent, falling 1.4 per cent to Rmb39.99.

Over in Mumbai, the Sensex opened for trading 0.7 per cent higher at 13,184.65, while Taiwanese shares lost 1.3 per cent to 7,300.08.