By V. Phani Kumar, Colin Ng and Wei-Zhe Tan
HONG KONG (MarketWatch) -- Asian markets ended mixed in choppy trading Friday as investors remained cautious ahead of U.S. jobs data and on deepening concerns of an economic slowdown.
Australian shares ended flat, offsetting weakness in energy producers after an overnight drop in crude-oil prices.
This came on the heels of the government announcing a compromise for its controversial tax on Australian mining projects. The revision offers the industry major concessions compared to the original draft.
Interview: Japan's Senior Vice Finance Minister
Motohisa Ikeda, senior vice finance minister of Japan, speaks about the yen and the Bank of Japan in an interview with The Wall Street Journal.
"With increasing signs of cooling in both domestic and overseas economies, investors are getting jittery and prefer to remain on the sidelines," said Wang Junqing, analyst with Guosen Securities in Shanghai.
Australia's S&P/ASX 200 finished little changed after declining in the previous eight sessions, and Japan's Nikkei Stock Average climbed 0.1%, snapping a five-session losing streak. Both benchmarks overcame intraday losses as several regional indexes wavered between gains and losses.
/zigman2/quotes/210598065/realtime DJIA 30,040.03, +448.76, +1.52%
China's Shanghai Composite rose 0.4%, Hong Kong's Hang Seng Index dropped 1.1%, South Korea's Kospi fell 0.9%, Taiwan's Taiex advanced 1.1% and India's Sensex inched up 0.2% in afternoon trading.
Dow Jones Industrial Average (DOW:DJIA) futures were one point lower in screen trade, as U.S. investors awaited key data on nonfarm payrolls for June.
"Equity markets have succumbed again to the deflationary signal being sent in recent weeks by the dramatic rally in the U.S. government bond market," CLSA managing director and equity strategist Christopher Wood wrote in a note.
"The odds favor a further decisive decline, sooner or later, most likely driven by continuing negative focus on the accelerating deflationary condition of certain parts of euro-land, and the negative consequences this poses to euro-land bank balance sheets," he added.
In Australia, the mining-tax revision is a big win for the industry, said Select Equities analyst David Spotswood. The changes should remove somewhere between a third to half of the impact of the original tax proposal on a company like BHP Billiton (ASX:AU:BHP) (NYS:BHP) , he noted, adding that the original tax proposal had foreign investors worrying about the potential for the government to make more surprise tax and regulatory changes.
"There was a lot of selling from offshore investors of Australia shares last month. ... This should alleviate that, so it is good news," he said.
Shares of Rio Tinto (NYS:RTP) (ASX:AU:RIO) rose 0.3% and Fortescue Metals Group (ASX:AU:FMG) climbed 2%, while Alumina (ASX:AU:AWC) added 0.7%. Read full story.
Regional energy companies' shares broadly declined after crude prices ended below $73 a barrel on the New York Mercantile Exchange.
Santos (ASX:AU:STO) lost 1.1% and Woodside Petroleum (ASX:AU:WPL) (OTC:WOPEY) shed 2.2% in Sydney, while Cnooc Ltd. (NYS:CEO) (HKG:HK:883) tumbled 3.3% and China Petroleum & Chemical Corp., also known as Sinopec (NYS:SNP) (HKG:HK:386) , gave up 2.2% in Hong Kong, and Cairn India fell 0.3% in Mumbai trading.
Most gold producers also sustained losses. Gold prices fell Thursday and as lingering concerns weighed over slowing global demand after weaker-than-expected economic data out of the U.S. and China recently.
Shares of Zhongjin Gold (SHG:CN:600489) tumbled 4.9% and Shandong Gold-Mining (SHG:CN:600547) sank 4.6% in Shanghai, with Zijin Mining Group (SHG:CN:601899) (OTC:ZIJMF) skidding 3.2% in Hong Kong, Newcrest Mining (ASX:AU:NCM) (OTC:NCMGY) losing 3.2% in Sydney and Sumitomo Metal Mining (TKS:JP:5713) shedding 0.9% in Tokyo.
August Nymex crude-oil futures moved up 21 cents at $73.16 a barrel. Spot gold was at $1,211.80 per troy ounce, up $12.40 from late dealings Thursday in New York.
Also lower, shares of Aluminum Corp. of China (HKG:HK:2600) (NYS:ACH) fell 3.2% in Hong Kong after announcing the termination of a planned bauxite-mine investment in Australia due to "various unfavorable factors" and on reports it had cut alumina spot prices by 7%.
In Seoul, shipbuilders and steelmakers advanced although broad market demand was subdued.
Posco (NYS:PKX) rose 1.3% and Hyundai Heavy Industries Co. added 3% on bargain-hunting after recent losses. Samsung Heavy Industries added 2.4% after winning a 1.27 trillion-won ($1.03 billion) order to build 10 container ships in Asia.
However, GS Engineering tumbled 4.4% on news its 1.42 trillion-won South Pars gas plant project in Iran had been cancelled due to sanctions by the United Nations against Teheran.
Buyers test the Tokyo waters
Japanese stocks inched higher as bargain buyers scooped up exporters that had recently been heavily sold. The buying was fueled by the U.S. dollar's rise from Thursday.
"It's not that worries about a strong yen have abated, but current share prices are attractive," said Yoshinori Nagano, senior strategist at Daiwa Asset Management.
Shares of Canon (NYS:CAJ) (TKS:JP:7751) rose 1.1%, helped also by Mizuho Securities' upgrade to outperform from a neutral rating previously, while Kyocera (TKS:JP:6971) added 0.9% and Sony (NYS:SNE) (TKS:JP:6758) rose 0.6%.
Toshiba (OTC:TOSYY) (TKS:JP:6502) gained 1.6%, rising as the company said that it's jointly developing car battery systems with Mitsubishi Motors (TKS:JP:7211) (OTC:MMTOF) , and that it hopes to eventually supply rechargeable lithium-ion batteries for use in the auto maker's electric cars. Mitsubishi shares ended unchanged.
Elsewhere in the region, New Zealand's NZX 50 gained 0.2% and Philippine stocks ended 0.7% lower. Singapore's Straits Times Index added 0.6%, Indonesian shares fell 0.3% and Thailand's SET Index advanced 0.3%.
In foreign-exchange markets, the euro was confined to a range against the U.S. dollar, as traders avoided large positions ahead of the numbers on nonfarm payrolls.
The euro was at $1.2501 compared with $1.2514 in late New York trading Thursday and at 110.15 Japanese yen, from 109.58 yen. The dollar was at 87.97 yen from 87.56 yen.
"Recently, markets have found it hard to decide whether to sell the [U.S. dollar] due to weaker economic data or buy it on higher risk aversion," said Credit Agricole Corporate & Investment Bank in a note.
Credit Agricole said weak recent data -- including Thursday's U.S. pending-home sales, the Institute for Supply Management's June manufacturing index and weekly jobless claims -- have weighed on the greenback. "The news will probably get much worse today, with the release of the U.S. June jobs report set to deliver further disappointment," it added.
Lead September Japanese government bond futures contract fell 0.28 to 141.60 points, while the 10-year cash JGBs were three basis points higher at 1.090%.