By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — Chinese and Japanese markets managed to shrug off early losses to finish higher Monday, though several other major Asian bourses saw losses.
Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.58% rose 0.7%, while the Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -0.40% added 0.2%, and Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -1.63% edged up 0.1%.
On the downside, however, Australia’s S&/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO +0.22% declined 0.7%, Taiwan’s Taiex shed 0.5%, and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -2.42% slipped 0.1%.
Asian equities had started the day on a down note after U.S. stocks skidded Friday, pressured by data and some poorly received earnings from some major companies.Read: U.S. stocks slammed on worst day since June.
AMP Capital head of investment Shane Oliver said early Monday that over the past few weeks, global share markets have been consolidating in the wake of strong gains made since June.
“Given uncertainties regarding the global outlook, this may have a bit further to run,” he said of recent Asian market weakness.
Still, Oliver said share markets may eventually resume broad gains due to recent supportive policy measures from global central banks.
Financials and related firms gained in Hong Kong on Monday, with bourse operator Hong Kong Exchanges & Clearing Ltd. /zigman2/quotes/200234512/delayed HK:388 -3.37% /zigman2/quotes/201215503/composite HKXCY -2.75% climbing 3.5% after the territory was forced to enter the market to depress its currency, suggesting strong investing inflows.
Linus Yip, chief strategist at First Shanghai Securities, said that the Hong Kong market is firm compared to its Asian peers, helped by Chinese gross domestic product data last Thursday that showed growth in line with expectations during the third quarter.
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The GDP and some above-forecast September data are a sign that the Chinese economy could be bottoming out, and given those circumstances, “it’s reasonable for money to be coming into Hong Kong,” he said.
The Hong Kong Monetary Authority stepped into the market last Friday for the first time in three years to weaken the Hong Kong dollar so as to maintain its peg with the U.S. dollar, according to reports. Yip said the move was a clear sign of inflows to Hong Kong. Read Craig Stephen commentary: Liquidity party restarts in Hong Kong.
Property companies, which also tend to benefit from strong investment inflows, likewise moved higher, with Sun Hung Kai Properties Ltd. /zigman2/quotes/209086152/delayed HK:16 -2.02% /zigman2/quotes/205427525/composite SUHJY -0.65% up 1%, and Henderson Land Development Co. /zigman2/quotes/208724890/delayed HK:12 -3.48% /zigman2/quotes/206540703/composite HLDVF +1.90% finishing with a gain of 2.1%.
However, some Hong Kong-listed exporters weakened, with Li & Fung Ltd. down 0.9%, Lenovo Group Ltd. /zigman2/quotes/205368244/delayed HK:992 +4.05% /zigman2/quotes/201114980/composite LNVGF +2.36% losing 1.1%, and Foxconn International Holdings Ltd. /zigman2/quotes/205017351/delayed HK:2038 -2.56% /zigman2/quotes/207122890/composite FXCNF -5.44% retreating 3.7%. A Wall Street Journal report late Friday said that Japan’s Nintendo Co. /zigman2/quotes/208063194/delayed JP:7974 -2.42% /zigman2/quotes/206371241/composite NTDOF -3.29% , a client of Foxconn’s parent group, planned to investigate the company’s use of child labor.
Over in Tokyo, the market opened sharply lower, suffering as Japanese trade data early Monday showed that the country’s exports fell a larger-than-expected 10.3% in September compared to a year earlier, hit by a heavy drop in shipments to China and Western Europe. Read: Japan exports drop 10.3%
Exporters help lead the early losses for Japan, but many major names swung to gains in the afternoon as the dollar rose against the yen.
By the Tokyo close, the U.S. currency was trading at ¥79.56, well above its ¥79.31 level in late trading Friday. The advance above ¥79.50 in particular helped trigger stop-loss orders that supported the dollar against the yen, according to Dow Jones Newswires.
Amid a weakening yen, Pioneer Corp. climbed 2.1%, NEC Corp. /zigman2/quotes/205173342/delayed JP:6701 -0.19% /zigman2/quotes/203814274/composite NIPNF -3.13% added 2.2%, Mitsubishi Motors Corp. /zigman2/quotes/202404490/delayed JP:7211 -4.44% /zigman2/quotes/200876874/composite MMTOF -1.18% improved by 2.9%, and Mazda Motor Corp. /zigman2/quotes/204777714/delayed JP:7261 -3.67% /zigman2/quotes/206646681/composite MZDAF -7.43% advanced 1%.
Shares of Sharp Corp. /zigman2/quotes/203224600/delayed JP:6753 -2.38% /zigman2/quotes/207472799/composite SHCAF +3.84% rallied 7.4% after recent losses, following reports that the firm is set to increase the number of plants that will produce its latest liquid-crystal-display panels. Read: Sharp reportedly to boost LCD panel production.
On the downside, however, Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 +0.55% shed 0.4% after the company said Friday it plans to cut some 2,000 Japan-based jobs to cut costs, while Mitsubishi Corp. /zigman2/quotes/208582984/delayed JP:8058 -1.19% dropped 1.8% after the trading house late Friday cut its revenue and profit forecast for the current fiscal year.
In South Korea, Hyundai Motor Co. /zigman2/quotes/206684590/delayed KR:005380 -2.49% /zigman2/quotes/204364212/composite HYMTF +0.63% gave up 0.9%, and LG Electronics Inc. /zigman2/quotes/209966407/delayed KR:066570 -3.35% LGEIY 0.00% lost 1%, though heavyweight Samsung Electronics Co. /zigman2/quotes/209800866/delayed KR:005930 -1.38% /zigman2/quotes/202367843/composite SSNLF +30.66% managed to gain 1%.
Korean financials also saw some sharp losses, with Hana Financial Group Inc. /zigman2/quotes/208370876/delayed KR:086790 -3.19% dropping 2.6% and Woori Finance Holdings Co. ending down 1.4%.
Commodity futures recorded steep losses in New York on Friday as investors flocked to the U.S. dollar, with benchmark oil futures down 2%, gold futures dropping more than $20 an ounce, and copper futures losing nearly 11 cents per pound. Read more on Friday’s metal losses.
Though some commodities pared those losses Monday, the declines helped weigh on Australian miners. Rio Tinto Ltd. /zigman2/quotes/200083756/delayed AU:RIO -1.98% /zigman2/quotes/202627887/composite RIO -0.40% fell 2.4%, while Fortescue Metals Group Ltd. /zigman2/quotes/202351558/delayed AU:FMG -3.35% /zigman2/quotes/204116626/composite FSUMF -5.62% lost 2.1%, Alumina Ltd. /zigman2/quotes/210515632/delayed AU:AWC -2.18% gave up 2%, and BHP Billiton Ltd. /zigman2/quotes/201448516/delayed AU:BHP +2.07% /zigman2/quotes/208108397/composite BHP +0.41% dropped 0.9%.
On the upside, Australian agribusiness concern GrainCorp Ltd /zigman2/quotes/210558012/delayed AU:GNC +2.72% resumed trading after a halt to jump 39%.
The firm said that it received a conditional cash takeover proposal from U.S. firm Archer Daniels Midland Co. /zigman2/quotes/203479136/composite ADM -4.01% of 11.75 Australian dollars ($12.12) a share. Monday’s gains led GrainCorp to close above the offer price at A$12.30.