By V. Phani Kumar, Colin Ng and Kirsty Green
HONG KONG (MarketWatch) -- Asian shares ended mostly lower Thursday, with Chinese banking and property shares losing ground a day before the mainland's annual National People's Congress amid concerns about policy tightening.
Hong Kong stocks were led down as heavyweight stock China Mobile extended losses after the telecommunications giant said it was in talks to buy a stake in Shanghai Pudong Development Bank Co. Japanese stocks declined as a stronger yen hurt exporters, with Mitsubishi Motors plunging after it scrapped talks with PSA Peugeot-Citroen for a capital-alliance.
Japan's Nikkei 225 finished down 1.1%, South Korea's Kospi slipped 0.3%, Australia's S&P/ASX 200 rose 0.3%, Hong Kong's Hang Seng Index dropped 1.4%, China's Shanghai Composite fell 2.4% and Taiwan's Taiex declined 0.8%.
Dow Jones Industrial Average futures fell 30 points lower in screen trade.
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Traders said investors were also cautious ahead of the European Central Bank's interest rates decision later Thursday and U.S. jobs data Friday, while recent developments around debt-strapped Greece were also being watched closely.
"Europe is center stage. There's a sense that there could be another potential shoe to drop (following on from Greece's problems), so people are going to tread carefully," said UOB KayHian research head Andrew Chow.
Moreover, "the U.S. jobs data on Friday may be a wild card in the deck," said Brown Brothers Harriman in a note to clients. "It is a difficult number to forecast even in the best of times and weather appears to have played havoc with a number of recent economic reports."
In afternoon trading, India's Sensex fell 0.2% and Singapore's Straits Times slid 0.6%.
Chinese banking and property shares fell sharply ahead of the upcoming annual meeting of China's top advisory body the CPPCC and the National People's Congress. Taifook Securities said that the two meetings "will be of particular importance" this year as the 12th Five-Year Plan will be drafted.
Industrial & Commercial Bank of China /zigman2/quotes/202525815/delayed CN:601398 -0.61% lost 1.8% and China Merchants Bank Co. /zigman2/quotes/210188047/delayed CN:600036 -2.52% gave up 2.2% in Shanghai amid concerns about monetary tightening. China Vanke Co. /zigman2/quotes/205643772/delayed CN:000002 -0.39% lost 2% in Shenzhen, on expectations policymakers may act to cool property prices in some cities.
"A key watch point is whether there will be any mention of property tax... High property prices stood out as the issue that delegates are most worried about, and the government is under huge pressure to address this," said analysts at Credit Suisse. But the analysts also expect some positive news out of the meetings, saying the government may turn its attention from infrastructure development to boosting domestic consumption, and could focus on raising the exemption level on salary taxes.
In Hong Kong, China Mobile /zigman2/quotes/204514293/composite CHL -0.52% /zigman2/quotes/200868736/delayed HK:941 -2.20% dropped 2.4%, extending losses to a third straight session on the company's plan to buy a stake in Shanghai Pudong Development Bank /zigman2/quotes/204296742/delayed CN:600000 -0.32% . Locally traded shares of Chinese banks added to the selling pressure, with China Construction Bank Corp. /zigman2/quotes/208974133/delayed HK:939 -1.18% /zigman2/quotes/207732534/composite CICHY +1.20% dropping 2.9% and ICBC /zigman2/quotes/201401473/delayed HK:1398 -1.48% shedding 2.5%.
In Tokyo, investors weren't keen to take on large positions before Friday's U.S. non-farm payrolls data, said traders. "What investors are watching the most [for] is whether the yen will weaken or rise against the dollar," said Yukio Takahashi, market analyst at Mizuho Securities.
Mitsubishi Motors /zigman2/quotes/202404490/delayed JP:7211 +2.12% /zigman2/quotes/200876874/composite MMTOF -5.36% tumbled 10.6% on news the auto maker couldn't reach an agreement with PSA Peugeot-Citroen for a capital-alliance. Sony /zigman2/quotes/201361720/delayed JP:6758 +0.56% /zigman2/quotes/208567357/composite SNE +0.03% dropped 1.1% and Canon /zigman2/quotes/207639533/delayed JP:7751 -1.35% /zigman2/quotes/210242912/composite CAJ +4.80% lost 0.8%, with both reversing early gains.
Some shipping companies advanced after a rise in the Baltic Dry Index, with Nippon Yusen /zigman2/quotes/208117193/composite NPNYY +3.76% /zigman2/quotes/203488100/delayed JP:9101 +2.30% gaining 0.6% and Kawasaki Kisen Kaisha /zigman2/quotes/201857679/delayed JP:9107 -0.56% rising 1.9%.
Elpida Memory climbed 1.4% on news it has reached an agreement to acquire flash memory research-and-development operations from U.S. chipmaker Spansion, which filed for Chapter 11 bankruptcy protection last year.
Australian miners helped support the Sydney market after commodity prices gained ground Wednesday. BHP /zigman2/quotes/208108397/composite BHP +0.67% /zigman2/quotes/201448516/delayed AU:BHP -0.65% rose 1.5%, Rio /zigman2/quotes/200083756/delayed AU:RIO -0.76% added 0.7% and Fortescue Metals Group /zigman2/quotes/202351558/delayed AU:FMG +1.89% advanced 0.6%. See related story.
However, banks retreated after their recent run on the back of good results from Westpac Banking Corp. /zigman2/quotes/203084975/delayed AU:WBC -1.27% /zigman2/quotes/206661702/composite WBK +0.08% and Australia & New Zealand Banking Group /zigman2/quotes/205482049/delayed AU:ANZ -0.68% /zigman2/quotes/203732563/composite ANZBY 0.00% . ANZ slid 0.9% and Westpac slipped 0.2%, with Commonwealth Bank of Australia /zigman2/quotes/200638713/delayed AU:CBA -0.72% /zigman2/quotes/207018701/composite CBAUF -0.24% dropping 0.3%.
The Taiwanese market fell after an earthquake that shook Taipei earlier in the day, but losses were contained. "The earthquake is unlikely to affect investor sentiment today, as it doesn't seem to have a big impact on companies' operations so far," said Randy Chang, trader at KGI Securities.
Liquid crystal display maker Chi Mei Optoelectronics /zigman2/quotes/209320667/composite CMOPF +26.71% fell 0.9% after it halted factory operations to evaluate condition of plants and offices after the earthquake.
Elsewhere, New Zealand's NZX 50 ended up 0.5% and Philippine shares ended 1.2% lower. In afternoon trade, Indonesian shares gave up 0.1% and Thailand's SET Index shrank 0.3%.
In foreign exchange markets, the euro was buying $1.3649, compared with $1.3703 in late New York trade Wednesday, and 120.62 yen, versus 121.17 yen. The dollar dropped to 88.34 yen from 88.43 yen.
Japanese government bonds were higher, as "investors are reluctant to move ahead of key events tomorrow, such as the U.S. employment report for February and the National People's Congress in China," said Mitsubishi UFJ Securities strategist Katsutoshi Inadome. Lead March JGB futures rose 0.23 to 140.01 points, while the 10-year cash yield was unchanged at 1.330%.