HONG KONG (MarketWatch) — Asian stocks fell Tuesday as investors locked in profits after strong recent gains and on caution ahead of the U.S. earnings season, with Japanese shares dropping as the yen strengthened.
China’s Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 -2.78% and Taiwan’s Taiex gave up 0.4% each, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.16% slid 0.7%, and Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO +0.30% shed 0.6%.
“News flow [is] light and investors cautious after the recent rally, but I think we continue to see newly allocated monies continuing to support the market,” said Hong Kong-based market commentator Andrew Sullivan.
Fires rage across southern Australia
Wildfires are raging through parts of southern Australia, leaving behind a path of destruction.
The decline came after a lower finish on Wall Street Monday, before the start of the fourth-quarter earnings season this week, with markets also watching political developments to resolve the debt ceiling issue. Read: U.S. stocks retreat after last week’s climb.
Several exporters weakened in Tokyo as the dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0101% slipped to ¥87.44 from ¥87.83 in late North American trading on Monday and ¥88.13 on Friday. Read: Dollar falls as traders watch ECB, Fed.
The drop for Tokyo stocks came even as Kyodo News reported, citing unnamed sources close to the matter, that Japan’s emergency fiscal stimulus package to boost its economy will be worth more than 20 trillion yen ($229 billion).
Furthermore, the yen advanced as ministers were quoted in other media reports as saying the government will make a 2% inflation target part of a new policy accord with the Bank of Japan, but won’t set a deadline for reaching that target.
“[The] yen appears to be stabilizing as investors wait for the next Bank of Japan meeting,” said Sullivan, adding that traders were also mindful of technical indicators suggesting the market was “overbought.”
Mazda Motor Corp. /zigman2/quotes/204777714/delayed JP:7261 -0.36% /zigman2/quotes/206646681/delayed MZDAF +6.12% fell 5%, Nissan Motor Co. /zigman2/quotes/208298710/delayed JP:7201 -0.97% /zigman2/quotes/207656007/delayed NSANY +0.04% dropped 1.1% and Casio Computer Co. /zigman2/quotes/202492162/delayed JP:6952 +1.88% /zigman2/quotes/206719136/delayed CSIOY +0.40% lost 3.1%.
Consumer electronics firm Sharp Corp. /zigman2/quotes/203224600/delayed JP:6753 -0.63% /zigman2/quotes/207472799/delayed SHCAF -0.94% managed to buck the lower trend, rebounding 3.9% from recent losses. The stock is still down more than 3% so far this month.
Also ranking among decliners, Aozora Bank Ltd. /zigman2/quotes/202607094/delayed JP:8304 +0.90% /zigman2/quotes/204479122/delayed AOZOY +0.94% extended steep losses from the previous session — when reports emerged that Cerberus Capital would sell most of its stake — with a 4% decline.
/zigman2/quotes/210561789/realtime/sampled USDJPY 108.5900, -0.0110, -0.0101%
In Hong Kong, meanwhile, losses were led by profit-taking in energy, insurance and property sectors after their strong performance recently.
Shares of China Resources Land Ltd. /zigman2/quotes/209191868/delayed CRBJY +1.67% /zigman2/quotes/202417326/delayed HK:1109 -7.88% dropped 2.7%, oil major Cnooc Ltd. /zigman2/quotes/204964401/composite CEO +0.51% /zigman2/quotes/203421416/delayed HK:883 -0.50% fell 1.8% and China Life Insurance Co. /zigman2/quotes/202359856/delayed HK:2628 -0.10% /zigman2/quotes/206573290/composite LFC -0.32% lost 3.3%.
Elsewhere in the region, South Korean heavyweight Samsung Electronics Inc. /zigman2/quotes/209800866/delayed KR:005930 +1.79% /zigman2/quotes/202367843/delayed SSNLF 0.00% fell 1.1% after announcing fourth-quarter operating profit and sales guidance figures that broadly met analyst estimates. Read: Samsung estimates record profit in fourth quarter.
Major miners declined in Sydney, with BHP Billiton Ltd. /zigman2/quotes/208108397/composite BHP +0.53% /zigman2/quotes/201448516/delayed AU:BHP +1.17% dropping 0.8% and Rio Tinto Ltd. /zigman2/quotes/202627887/composite RIO +0.66% /zigman2/quotes/200083756/delayed AU:RIO +1.49% shedding 1.2%.
But with Nymex light sweet crude futures staying over $93 a barrel in electronic trading, the energy sector provided support. Santos Ltd. /zigman2/quotes/207349564/delayed AU:STO +0.26% /zigman2/quotes/207933640/delayed STOSF +7.18% climbed 0.8% and sector heavyweight Woodside Petroleum Ltd. /zigman2/quotes/203437212/delayed AU:WPL +0.03% /zigman2/quotes/206770672/delayed WOPEF +7.26% gained 1%.
Insurer QBE Insurance Group Ltd. /zigman2/quotes/207050271/delayed AU:QBE +0.48% /zigman2/quotes/201857553/delayed QBEIF +3.73% lost 2.1%, as fires continued to threaten homes and properties in the southeastern parts of the country.