By Sarah Turner and V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Most Asian markets fell Thursday, with Japanese shares retreating from their highest level since September 2008 as the yen appreciated, while Chinese stocks slipped ahead of the Lunar New Year holiday.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +2.20% lost 0.9% after Wednesday’s 3.8% surge, while Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.72% slid 0.3% and China’s Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -0.17% fell 0.7% ahead of next week’s Lunar New Year holidays.
“I think that investors are packing away for the New Year holiday. That’s why trading motivation is not great,” KGI Asia chief operating officer Ben Kwong said.
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“The market sentiment has turned a bit cautious — A-shares have softened,” he said, referring to yuan-denominated Chinese shares. “I think this is reasonable, as the market has had a good run.”
Elsewhere in Asia, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.54% slipped 0.2% and Taiwan’s Taiex ended flat.
Bourses in mainland China, Taiwan and Vietnam will be closed the whole of next week for Lunar New Year holidays, while the market in Hong Kong will be shut from Monday through Wednesday.
Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +1.00% defied the broad region-wide decline to inch up 0.3%, aided by some positive earnings reports.
Telecom giant Telstra Corp. /zigman2/quotes/201936124/delayed AU:TLS +0.69% /zigman2/quotes/202275272/composite TTRAF +3.53% climbed 1.3% after it posted a modest profit gain, while keeping its dividend payout and full-year guidance unchanged. Read: Telstra first-half profit rises 8.8%.
National Australia Bank Ltd. /zigman2/quotes/210431826/delayed AU:NAB +1.01% /zigman2/quotes/205253475/composite NAUBF +0.66% climbed 1.9%, helped by a 4% rise in quarterly adjusted earnings. Read: National Australia Bank Q1 cash earnings up 4%.
News Corp. /zigman2/quotes/209121543/delayed AU:NWS +1.13% /zigman2/quotes/201755982/composite NWSA +0.59% fell 2.6%, however, after the media major cut its fiscal year outlook, even as it reported its second-quarter net profit more than doubled. News Corp. owns MarketWatch, the publisher of this report.
Over in Tokyo, Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 +2.29% rose 2.6% after announcing a deal on Wednesday to form an electronic-parts-mounting joint venture with sewing-machine maker Juki Corp. /zigman2/quotes/207528252/delayed JP:6440 +1.94% Shares of Juki added 5%.
Several exporters, which had put in a strong performance the previous day as the yen weakened to multi-year lows against the dollar, gave up some of those gains as the yen edged higher. Citizen Holdings Co. /zigman2/quotes/202792467/delayed JP:7762 +0.79% /zigman2/quotes/206882802/composite CHCLY +3.96% fell 2.3% and Advantest Corp. /zigman2/quotes/206869087/delayed JP:6857 +3.38% retreated 2.7%.
KGI’s Kwong said the yen hasn’t yet depreciated alarmingly, though if the dollar rises above ¥100, it “will raise concern about a currency war.”
/zigman2/quotes/210598069/delayed 180721 2,615.41, +14.05, +0.54%
A currency war refers to competitive currency devaluation by nations trying to boost their export competitiveness.
Some Japanese forms were also hit hard by poor earnings, with Nikon Corp. /zigman2/quotes/203281219/delayed JP:7731 +2.41% /zigman2/quotes/203151879/composite NINOF +10.35% diving 19% after cutting its full-year outlook and posting below-forecast results.
On the other hand, a swing to profit and full-year forecast hike sent shares of Mazda Motor Corp. /zigman2/quotes/204777714/delayed JP:7261 +6.68% /zigman2/quotes/206646681/composite MZDAF +2.01% climbing 12%.
Some exporters were firmer in South Korea, where concerns about yen-fueled competition from Japanese firms have kept the market under pressure since the start of the year.
LG Electronics Inc. /zigman2/quotes/209966407/delayed KR:066570 +3.33% LGEIY 0.00% climbed 2%, while chip maker SK Hynix Inc. /zigman2/quotes/206420319/delayed KR:000660 -1.45% HXSCL 0.00% rose 2%.
But those gains may prove short-lived, according to Brown Brothers Harriman strategist Win Thin.
“The sharply weaker yen has negative implications for regional producers and exporters of high-end electronics and manufacturing, such as Korea and Taiwan,” he said.
In Hong Kong trading, computer maker Lenovo Group Ltd. /zigman2/quotes/205368244/delayed HK:992 -0.27% /zigman2/quotes/204000062/composite LNVGY +0.36% jumped 5.2% on news it will be included in the 50-component Hang Seng Index next month.
At the same time, shares of Aluminum Corp. of China Ltd. /zigman2/quotes/202960704/delayed HK:2600 -2.75% , which Lenovo will be replacing in the benchmark, dropped 2.8%.
“I think that the [Hong Kong] market will be choppy around this level,” said KGI’s Kwong. “After the Lunar New Year, I think investors will shift attention to fundamentals — upcoming earnings and the health of the Chinese economy,” he said.
In mainland Chinese trading, banks were among the worst performers, with China Merchants Bank Co. /zigman2/quotes/210188047/delayed CN:600036 +0.03% /zigman2/quotes/208876947/composite CIHKY +2.25% down 2.9% and China Citic Bank Corp. /zigman2/quotes/206411273/delayed CN:601998 +2.58% /zigman2/quotes/206611395/composite CHCJY -1.19% down 2.8%.