HONG KONG (MarketWatch) — Japanese stocks fell Tuesday as the yen strengthened and some disappointing earnings reports weighed, while shares in Sydney jumped after a bigger-than-expected interest rate cut from the Reserve Bank of Australia.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.57% closed 1.8% lower at 9,350.95, while the Australian S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -2.43% rose 0.8% to 4,429.50.
The gains in Sydney came after the Reserve Bank of Australia cut its key cash rate by 0.5 percentage points to 3.75%, surprising markets that had priced in a quarter-point cut to interest rates. Read more on RBA move.
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“The main reason behind the bigger-than-expected cut is the fact that the RBA doesn’t expect the big banks to pass on the full rate cut. This has resulted in equities extending their gains,” said Stan Shamu, a market strategist at IG Markets.
Earlier, gains for Australian stocks gathered steam after official Chinese manufacturing data showed further improvement for the sector. Read more on China’s official PMI data.
Still, market reaction to the Chinese data appeared muted, with Chinese markets, along with those in Malaysia, the Philippines, South Korea, Taiwan and Thailand, closed for a public holiday.
The Japanese share market, returning Tuesday from a three-day weekend, saw losses for exporters as the U.S. dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.2296% fell below the ¥80 mark overnight for the first time since late February.
The dollar’s weakness against the Japanese currency, along with mild losses for U.S. shares, followed a soft reading on Chicago manufacturing and further worries about the euro zone.
In Tokyo trade, shares of TDK Corp. /zigman2/quotes/208948266/delayed JP:6762 -3.99% /zigman2/quotes/201622098/delayed TTDKY -5.78% plunged 6.6%, Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 +1.75% /zigman2/quotes/208567357/composite SNE -3.94% dropped 3.9% and Toyota Motor Corp. /zigman2/quotes/200537742/composite TM -2.70% /zigman2/quotes/203803129/delayed JP:7203 +0.74% slid 3.5%.
Japan investors were also catching up with corporate earnings. Nippon Electric Glass Co. /zigman2/quotes/202964268/delayed JP:5214 -1.47% /zigman2/quotes/203913997/delayed NPEGF -7.61% tumbled 8.6% after issuing weaker-than-expected profit guidance, while Sharp Corp. /zigman2/quotes/203224600/delayed JP:6753 +0.56% /zigman2/quotes/207472799/delayed SHCAF -8.82% slumped 9.3% after posting its worst-ever fiscal-year loss on Friday. Read more on Sharp financial results.
Honda Motor Co. /zigman2/quotes/200490352/delayed JP:7267 -3.48% /zigman2/quotes/207173990/composite HMC -6.14% surrendered 3.4% after its profit growth missed estimates, although it also forecast its profit for the fiscal year ending March 2013 would double. Read more on Honda earnings.
Banks were broadly weaker after a poor session for financials in Europe Monday. Standard & Poor’s Ratings Services took an axe to ratings for 16 Spanish lenders in the wake of a double-notch downgrade of Spain’s credit rating last week. Read more on Europe markets.
Among Japanese financial names, Mitsubishi UFJ Financial Group Inc. /zigman2/quotes/207520099/delayed JP:8306 -2.68% fell 3.4%, while Daiwa Securities Group Inc. /zigman2/quotes/201391978/delayed JP:8601 -2.54% /zigman2/quotes/206649614/delayed DSECF -9.61% dropped 5.9%.
Nomura Holdings Inc. /zigman2/quotes/206251373/delayed JP:8604 -2.97% /zigman2/quotes/207276383/composite NMR -6.79% traded down 4.6%, failing to draw support from a forecast-beating 86% increase in quarterly net profit. Read more on Nomura results.
Australian banking shares ended well off the day’s lows after the RBA surprise decision.
National Australia Bank Ltd. /zigman2/quotes/210431826/delayed AU:NAB -5.43% /zigman2/quotes/205253475/delayed NAUBF +3.23% finished 0.1% lower, while Australia & New Zealand Banking Group Ltd. /zigman2/quotes/205482049/delayed AU:ANZ -5.57% /zigman2/quotes/204542251/delayed ANEWF +3.46% climbed 0.3% and Commonwealth Bank of Australia /zigman2/quotes/200638713/delayed AU:CBA -4.48% /zigman2/quotes/207018701/delayed CBAUF -1.43% advanced 1.7%.
Sydney-listed retailers also advanced, amid hope that consumer spending could start to pick up a bit under the lower rates, with department-store owner David Jones Ltd. up 2% and rival Myer Holdings Ltd. /zigman2/quotes/200987583/delayed AU:MYR -4.84% 3% higher.
Among other movers, Woodside Petroleum Ltd. /zigman2/quotes/203437212/delayed AU:WPL +0.61% /zigman2/quotes/206770672/delayed WOPEF +2.20% rallied 3.7% after announcing the sale of a minority stake in its proposed Browse gas-export project in Australia to a Japanese consortium for $2 billion. Read more on Woodside’s Browse stake sale.
Among the consortium’s key members, Japanese trading house Mitsubishi Corp. /zigman2/quotes/202447683/delayed MSBHY -3.11% /zigman2/quotes/208582984/delayed JP:8058 -2.03% dropped 2.1% and rival Mitsui & Co. /zigman2/quotes/205346820/delayed JP:8031 -1.35% /zigman2/quotes/206658933/delayed MITSY -4.70% lost 1.8% in the downbeat Tokyo market.