HONG KONG (MarketWatch) — Most Asian stocks declined on Friday as fears that the European debt crisis was deepening outweighed positive U.S. economic indicators and hopes for strong U.S. jobs data later in the day.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +0.89% closed 1.2% lower at 8,390.35, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.46% dropped 1.2% at 18,593.06 and Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.43% declined 0.8% to 4,108.50.
South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.07% dropped 1.1% to 1,843.14 and Taiwan’s Taiex gave up 0.2% to 7,120.51.
“The bond auctions in Europe are still weighing on the minds of investors,” said Louis Capital Markets’ head of Japanese equities Ben Collett, referring to an increase in borrowing costs for the French and Italian governments Thursday.
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The Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 +0.26% gained 0.7% to 2,163.39, staging a rebound from its 34-month closing low a day earlier.
Mainland Chinese stocks advanced as energy producer PetroChina Co. jumped after Beijing raised a threshold for a so-called windfall tax, effectively reducing tax payments for oil producers. Banks and resource stocks also climbed after hefty losses recently, although many property developers declined on Chinese bourses.
PetroChina Co. /zigman2/quotes/204979431/delayed HK:857 0.00% /zigman2/quotes/205108732/composite PTR +0.38% /zigman2/quotes/206980083/delayed CN:601857 -0.37% shares climbed 1.6% and China Petroleum & Chemical Corp., or Sinopec, /zigman2/quotes/202085942/delayed HK:386 +0.24% /zigman2/quotes/202783176/composite SNP +0.55% /zigman2/quotes/207158391/delayed CN:600028 -0.21% added 0.8% in Shanghai.
Shares of China Construction Bank Corp. /zigman2/quotes/208058581/delayed CN:601939 +0.15% /zigman2/quotes/207732534/delayed CICHY +1.33% added 1.5% and Jiangxi Copper Co. /zigman2/quotes/204256025/delayed JIXAY -2.94% /zigman2/quotes/201334192/delayed CN:600362 -0.54% rose 1.7%, while Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 -0.13% shed 0.9%.
In Hong Kong, shares of PetroChina added 2.3% and Sinopec climbed 1.9%, while Cnooc /zigman2/quotes/203421416/delayed HK:883 +0.67% /zigman2/quotes/204964401/composite CEO +1.53% advnaced 3%. See report on China oil-tax change.
In a note Friday, Citigroup said the tax change should boost PetroChina earnings by 16%, and those of Cnooc and Sinopec by about 10% each. See report on Citi analysis of oil-tax change.
But those gains in Hong Kong were far outweighed by losses in financial and other shares amid worries over Europe, and despite optimism about the U.S. nonfarm payrolls data for December due later on Friday. See U.S. jobs report preview.
Shares of HSBC Holdings PLC /zigman2/quotes/202687335/delayed HK:5 -1.30% fell 2%, while Ping An Insurance Group Co. /zigman2/quotes/202212125/delayed PNGAY +0.04% /zigman2/quotes/210315058/delayed HK:2318 +0.44% lost 4.5% in Hong Kong. Financials also weakened elsewhere, with National Australia Bank Ltd. /zigman2/quotes/210431826/delayed AU:NAB +0.11% /zigman2/quotes/205253475/delayed NAUBF +0.50% dropping 1.4% in Sydney, KB Financial Group Inc. /zigman2/quotes/200043823/composite KB -0.54% losing 1.6% in Seoul and Chinatrust Financial Holding Co. /zigman2/quotes/204306512/delayed TW:2891 +0.87% shed 3.3% in Taipei.
Louis Capital’s Collett also cited disappointment after the White House denied speculation that the U.S. was considering a massive trillion-dollar mortgage-refinance program for the day’s losses. See report on White House denial.
“I think we’re seeing some mid-market selling because there was a lot of excitement about rumors” of such a package, he said. “We opened far too optimistically this morning.”
Japanese exporters with large exposure to Europe were among the market casualties Friday, as the euro /zigman2/quotes/210561215/realtime/sampled EURJPY -0.0452% lost further ground against the Japanese yen overnight, falling below the ¥99 level.
Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 +1.45% /zigman2/quotes/208567357/composite SNE +0.65% lost 2% and Advantest Corp. /zigman2/quotes/206869087/delayed JP:6857 +4.07% /zigman2/quotes/202479540/delayed ADTTF -9.55% dropped 3.3%, while Nissan Motor Co. /zigman2/quotes/208298710/delayed JP:7201 +2.00% /zigman2/quotes/207656007/delayed NSANY +1.83% gave up 2.2%.
Several energy stocks moved lower after benchmark crude oil futures lost ground overnight on the New York Mercantile Exchange. Japan Petroleum Exploration Co. /zigman2/quotes/201212147/delayed JP:1662 -0.80% /zigman2/quotes/202925532/delayed JPTXF -1.12% dropped 1.5% in Tokyo, and Santos Ltd. /zigman2/quotes/207349564/delayed AU:STO +1.49% /zigman2/quotes/207933640/delayed STOSF +0.54% fell 0.4% in Sydney.
Shares of Samsung Electronics Co. /zigman2/quotes/203012110/delayed SSNGY 0.00% fell 1.4% in a downbeat Seoul market, failing to find support from its fourth-quarter outlook of a 73% rise in operating profit. See report on Samsung Electronics’ earnings outlook.