HONG KONG (MarketWatch) — Asia stocks traded in a downbeat fashion Tuesday as dividend worries weighed on Japanese utility firms while concerns over lackluster third-quarter earnings dragged on shares in Shanghai.
Japan’s Nikkei Stock Average (NIKKEI:JP:NIK) put in a flat performance, while the Shanghai Composite Index (SHE:CN:000001) lost 0.9% and South Korea’s Kospi (KOREA:KR:180721) benchmark declined 0.8%.
Australia’s S&P/ASX 200 index (S&P:AU:XJO) managed to gain 0.1%, and Singapore’s Straits Times was up 0.2%. Markets were closed for a holiday in Hong Kong, which made new headlines on the foreign-exchange front.
The Asia Dow (DJX:XX:ADOW) was marginally lower, easing 0.1% late.
The Hong Kong Monetary Authority intervened in the currency markets for a second time in less than a week on Tuesday, stepping in to sell the Hong Kong dollar in an attempt to halt appreciation of the currency after it traded near the lower channel of its trading band against the U.S. dollar (XTUP:USDHKD) .
The authority sold $3.914 billion Hong Kong dollars ($505 million), on the heels of having sold last Friday HK$4.67 billion during New York trading, its first intervention since 2009.
Most Asian markets have gained so far this month, gains that have been made against emerging Asian economies that “are not really booming but [are] still quite robust,” said Lucinda Chan. division director at Macquarie Private Wealth.
Investors and emerging markets
Markets from India to Brazil are getting a closer look after several years of lagging behind markets in the West. What’s behind the renewed interest?
In addition, U.S. earnings results out in recent days “have been quite reasonable,” she said, while the U.S. economy has shown some signs of improvement.
The third and final debate between President Barack Obama and Republican challenger Mitt Romney took place during Asian morning trade. U.S. stock futures edged lower after the debate wrapped up, then deepened further.
Both contenders commented on China, with Obama saying he will insist that Beijing play by the same rules as everyone else. Romney echoed those comments and reiterated his pledge to immediately label China a currency manipulator should he be elected.
“Coming into tonight’s debate, President Obama retained a small structural advantage, and I suspect that he will retain that advantage after this debate,” said Nomura economist Lewis Alexander in a note.
Dividend concerns weighed on the Japanese utility sector, as Kansai Electric Power Co. (TKS:JP:9503) (OTC:KAEPY) fell 13% after a Nikkei report that the electricity supplier won’t pay a dividend at the end of the fiscal year. This would be its first dividend omission in 61 years.
Kansai Electric’s rivals also traded weak, with shares of Chubu Electric Power Co. (TKS:JP:9502) (OTC:CHUEF) shedding 9.9% and Tokyo Electric Power Co. (TKS:JP:9501) (OTC:TKECY) falling 1.5%.
Energy-sector firms likewise declined in Tokyo, with JX Holdings Inc. (TKS:JP:5020) (OTC:JXHGF) down 1.6% and Japan Petroleum Exploration Co. (TKS:JP:1662) (OTC:JPTXF) down 1%. The pullback came after a 1.5% drop for crude-oil futures in New York on Monday. Read: Oil ends lower; pipeline, Mideast, dollar in focus
In the currency market, the U.S. dollar (XTUP:USDJPY) briefly traded over 80 Japanese yen for the first time since early July, up from ¥79.91 on Monday, before falling back to ¥79.77 as immediate central bank-easing hopes faded. The euro (XTUP:EURJPY) reached its highest point against the yen since May but then also retreated.
Despite the yen’s rebound, the dollar was still at relatively elevated levels against the Japanese currency, and some exporters held their gains in Tokyo on Tuesday, with Casio Computer Co. (TKS:JP:6952) (OTC:CSIOY) trading up 2.8%, Nikon Corp. (TKS:JP:7731) (OTC:NINOY) adding 1.6% and Panasonic Corp. (TKS:JP:6752) nudging ahead by 0.6%.
In focus: Fuji Heavy and Korean steel makers
Meanwhile, shares of Fuji Heavy Industries Ltd. (TKS:JP:7270) (OTC:FUJHF) , maker of Subaru brand vehicles, gained 3.8% after raising its net profit view to ¥40 billion from a prior estimate of ¥23 billion.
In South Korea, steel makers were adding pressure to the market, with Posco (KRX:KR:005490) (NYS:PKX) , the world’s fourth-largest producer, trading 2.1% lower ahead of its earnings report due late Tuesday.
Standard & Poor’s downgraded its long-term-debt rating on Posco to BBB+ from A- late Monday, saying that the firm will struggle to secure financing and that its operational performance will likely be weaker than previously expected.
Among its rivals, Hyundai Steel Co. (KRX:KR:004020) declined 1.7% while Dongbu Steel Ltd. (KRX:KR:016380) eased 0.1%.
Mainland-listed Chinese commodity firms were weak, with Aluminum Corp. of China (SHG:CN:601600) (NYS:ACH) trading down 1% in Shanghai.
Mainland steel makers were also lower amid expected sluggish earnings and what’s believed to be government plans for a forced consolidation of the sector. Shares of Angang Steel Co. (SHE:CN:000898) fell 1.4% as Baoshan Iron & Steel (SHG:CN:600019) retreated 0.2%.
And Air China Ltd. (SHG:CN:601111) dropped 1% after abandoning a plan to raise funds in a private placement with China National Aviation Holding Co., its state-owned parent. Tuesday’s session marked the first for the Beijing-based carrier since its shares were suspended earlier in October.
In Australia, commodity extractors underpinned gains for Sydney stocks, with Oz Minerals Ltd. (ASX:AU:OZL) up 1.9% after saying that it’s on track to meet its fiscal-year production targets for copper and gold.
Also in the sector, Fortescue Metals Group Ltd. (ASX:AU:FMG) (OTC:FSUMF) advanced 1.7% while Rio Tinto Ltd. (ASX:AU:RIO) (NYS:RIO) (NYS:RIO) rose 0.1%.