MW: Asian steelmakers rise, as Japan exporters drop
By V. Phani Kumar, Colin Ng and Wei-Zhe Tan
HONG KONG (MarketWatch) -- Asian stock markets ended mixed Tuesday as declining exporters weighed on Japanese shares, which snapped their four-day rally on renewed worries about the yen's strength, and steelmakers climbed on expectations of higher prices.
Among decliners, Japan's Nikkei Share Average dropped 0.8%, Australia's S&P/ASX 200 declined 0.1%, and South Korea's Kospi lost 0.3%.
Gainers included China's Shanghai Composite Index, up 0.1%; Hong Kong's Hang Seng Index, up 0.2%; and India's Sensex, up 0.3% in afternoon trading.
Some markets showed modest trading volumes in the absence of overnight cues from the U.S., where markets were shut Monday for the Labor Day holiday.
Futures on the Dow Jones Industrial Average (DJIA 10,448, +127.83, +1.24%) futures dropped 58 points at last check. George Kanaan, UBS head of sales in Sydney, said he expected Wall Street to continue pricing out a double-dip recession this week.
"The bigger issue is whether or not we have a double-dip recession in the U.S.," Kanaan said. "I think the more data we get in support of economic recovery, the more the equities markets will be supported."
Japanese exporters declined as the yen appreciated against major currencies, although the Bank of Japan held interest rates unchanged and left open the possibility of additional emergency action to support the economy. Read more about the Japanese central bank's decision.
"We think the prolonged yen appreciation is due to the cautious outlook for the U.S. economy, the inability of the Japanese authorities to halt the trend, little impact on the market from currency intervention alone, and higher real interest rates in yen compared to any advanced economy's currency," Junko Nishioka, chief economist for Japan at Royal Bank of Scotland, wrote in emailed comments.
Shares of Advantest Corp. (ATE 19.51, +0.37, +1.93%) (JP:6857 1,655, -31.00, -1.84%) fell 1.8%, Elpida Memory Inc. (ELPDF 0.00, 0.00, 0.00%) (JP:6665 1,008, -31.00, -2.98%) gave up 3%, and Honda Motor Co. (HMC 33.89, -0.11, -0.32%) (JP:7267 2,815, -40.00, -1.40%) lost 1.4%.
Real-estate developer Tokyo Tatemono (JP:8804 319.00, +10.00, +3.24%) rose 3.2% and Nippon Electric Glass (JP:5214 1,080, +15.00, +1.41%) climbed 1.4% on news they would be included in the Nikkei 225 Share Average, while Clarion (JP:6796 157.00, -16.00, -9.25%) lost 9.3% as it was removed from the benchmark. Mitsubishi Rayon (JP:3404 334.00, +3.00, +0.91%) (MRYZY 19.40, 0.00, 0.00%) , which was also removed, rose 0.9%, in line with a 1.7% rise in Mitsubishi Chemical Holdings Corp. (JP:4188 426.00, +7.00, +1.67%) as the two companies are merging.
Regional steelmakers got a boost from extended gains for their Chinese counterparts after a report Monday in the state-run Economic Information Daily said 18 small steelmakers in Wuan city, Hebei province, were ordered to suspend steel production for roughly 20 days in a bid to meet China's goal to cut energy consumption.
"The cutback by the small mills should help reduce overproduction and increase pricing and profitability for the larger players in the industry," Morgan Stanley wrote in a report.
JFE Holdings (JP:5411 2,695, +64.00, +2.43%) (JFEEY 0.00, 0.00, 0.00%) gained 2.4% in a downbeat Tokyo market, while Posco (PKX 104.28, +1.40, +1.36%) jumped 4.5% in Seoul, China Steel Corp. (CISXF 0.00, 0.00, 0.00%) climbed 3.2% in Taipei, and Steel Authority of India added 0.8% in Mumbai.
Among Chinese steel shares, Maanshan Iron & Steel Co. (CN:600808 3.94, +0.36, +10.06%) (HK:323 4.83, +0.26, +5.69%) (MAANF 0.51, +0.02, +3.03%) advanced 5.7% and Angang Steel (ANGGY 0.00, 0.00, 0.00%) (HK:347 13.02, +0.48, +3.83%) (CN:000898 8.89, +0.24, +2.78%) climbed 3.8% in Hong Kong. The stocks jumped 10.1% and 2.8%, respectively, on mainland bourses. Read full story on Chinese steel shares in Asia Markets.
Banking shares were broadly lower in Seoul in cautious trade ahead of the Bank of Korea's policy meeting Thursday, which is also "quadruple-witching day"-- when stock index options and futures, plus stock options and futures, all expire.
