MUMBAI (MarketWatch) — Asian shares mostly lost ground on Friday, with investors taking a lead from the U.S. and sending technology stocks lower, although emerging monetary-policy support helped lift China.
South Korea’s Kospi (KOREA:KR:180721) led the region lower with a 1.3% loss as a poor earnings report from LG Chem weighed. In Tokyo, the Nikkei Stock Average (NIKKEI:JP:NIK) fell 0.3%.
In China, however, the Shanghai Composite Index (SHE:CN:000001) ended with a 1.2% gain, while Hong Kong’s Hang Seng Index (HONG:HK:HSI) rose 0.1%.
Australia’s S&P/ASX 200 index (S&P:AU:XJO) gained 0.1%.
“I think that Asian markets right now have already factored in some short-term unfavorable factors. Markets are stabilizing, and easing of monetary policy is already on the way,” said Linus Yip, strategist at First Shanghai Securities in Hong Kong.
“India has already cut rates, and China is still going for easing policy. So Asian markets as a whole I think will enter into a rebound in the next couple of weeks,” Yip said.
Still, any bounce will likely be limited for Asian equity markets, Yip believes, unless signs emerge of more U.S. central bank action.
“The market is waiting for more liquidity — whether there will be [...] QE3 in the U.S.,” he said.
U.S. shares took a second straight day of losses Thursday, as jobless claims hovered around a four-month high and as Europe’s debt woes cast a cloud over markets. Read U.S. Market Snapshot.
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Chinese consumers are snapping up Louis Vuitton handbags but are increasingly buying them abroad, where prices are lower, raising concerns that the luxury-goods industry is headed for a slowdown in China. Photo: Getty
“We believe the jury is still very much out on what direction things will take in peripheral [European] countries in the coming months. With a number of event risks, volatility is likely to remain elevated for the time being,” said strategists at Barclays Capital.
Overnight weakness in U.S. techs, with sharp falls for Apple Inc. (NAS:AAPL) and EMC Corp. casting a shadow over the Japanese technology sector.
Toshiba Corp. (TKS:JP:6502) (OTC:TOSYY) dropped 2.4%, Advantest Corp. (TKS:JP:6857) (OTC:ADTTF) traded down 0.3%, and Fujitsu Ltd. (TKS:JP:6702) (OTC:FJTSY) moved lower by 2.5%.
The Korean market also felt the weight of tech-share losses, with semiconductor giant Samsung Electronics Co. (OTC:SSNLF) down 1.9%, LG Electronics Inc. off 1.5%, and SK Hynix Inc. losing 4%.
LG Chem Ltd. tumbled 9.2% in Seoul after unveiling a much weaker-than-expected 42% drop in first-quarter net profit compared to the year-ago period. Elsewhere in the sector, Honam PetroChemical Corp. fell 8.3%.
In Hong Kong trading, Internet major Tencent Holdings Ltd. (HKG:HK:700) (OTC:TCTZF) fell 1.4%, while shares of Foxconn International Holdings Ltd. (HKG:HK:2038) (OTC:FXCNF) dropped 2.7%.
Hong Kong-listed financials mostly recovered from early weakness by the close. Bank of Communications Co. (HKG:HK:3328) (OTC:BKFCF) (SHG:CN:601328) was off 0.5%, and Bank of China Ltd. (HKG:HK:3988) (OTC:BACHY) (SHG:CN:601988) finished flat, with both lenders due to report earnings next week.
Insurer AIA Group Ltd. (HKG:HK:1299) (OTC:AAGIY) was unchanged after reporting strong operational data for the first quarter. Read more on AIA’s report.
Among Asian energy and materials firms, Hong Kong-listed oil giant Cnooc Ltd. (HKG:HK:883) (NYS:CEO) fell 0.6%, and Jiangxi Copper Co. (HKG:HK:358) (OTC:JIAXF) shed 0.9%.
Japan’s JFE Holdings Inc. (TKS:JP:5411) (OTC:JFEEF) lost 3.3% in Tokyo after a Nikkei report saying the steel maker planned to increase its three-year investment target by 25%.
In Australian trading, miners were weak, though they recovered ground by the close. Fortescue Metals Group Ltd. (ASX:AU:FMG) (OTC:FSUMF) fell 1.1%, and BHP Billiton Ltd. (ASX:AU:BHP) (NYS:BHP) finished unchanged.
However, Oil Search Ltd. (ASX:AU:OSH) (OTC:OISHF) jumped 5.7% after the firm said that it has found more gas in Papua New Guinea.
Also in Sydney, U.S.-exposed building-materials firm Boral Ltd. (ASX:AU:BLD) (OTC:BOALF) dropped 2.9% after it cut its fiscal-year profit guidance, citing bad weather and a softer housing market. See report on Boral’s cut to profit outlook.