By Ese Erheriene
Asian shares were broadly lower Monday morning, with the Nikkei giving up early gains, driven by a sharp decline in electric utilities stocks after a nuclear-power skeptic’s weekend win in a Japanese gubernatorial race.
The Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.39% was recently flat, after gaining as much as 0.5% earlier in the session. Elsewhere in the region, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.13% was off 0.8%, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.33% fell 0.4%, and Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.49% declined 0.1%.
“Most investors will continue to be cautious and focus on economic data,” said Castor Pang, head of research at Core Pacific-Yamaichi International. He said regional markets will watch key economic data for signs of what action the U.S. Federal Reserve might take on interest rates before the end of the year.
In Japan, stocks were initially boosted by gains in U.S. financial stocks on Friday, after lenders J.P. Morgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. reported earnings that beat analysts’ estimates.
But the market’s strength didn’t last, with shares of electric power companies declining broadly after an antinuclear power candidate won the gubernatorial election in the Niigata prefecture, where Tokyo Electric Power Co., or Tepco, operates a big nuclear power plant.
Tepco /zigman2/quotes/202771076/delayed JP:9501 -0.23% shares are down 7.9%, while another regional utility, Chugoku Electric Power Co. /zigman2/quotes/208729841/delayed JP:9504 +0.54% , was off 1.8% at ¥1,207.
Meanwhile, the Japanese yen rose Monday, gaining 0.2% against the U.S. dollar. Local exporters, however, largely shrugged off the yen’s strength. Among key stocks, Toyota Motor Corp. /zigman2/quotes/203803129/delayed JP:7203 +1.10% was up 0.4%, Dai-ichi Life Holdings Inc. /zigman2/quotes/208507587/delayed JP:8750 +0.89% rose 0.7% and Panasonic Corp. /zigman2/quotes/201785256/delayed JP:6752 +0.50% added 1.8%.
Investors in Japan were also digesting comments early Monday by Bank of Japan Gov. Haruhiko Kuroda, who showed a softening in tone on further easing.
“We will continue to make necessary policy adjustments to maintain the momentum toward our price-stability target, based on economic and price conditions,” Kuroda said.
These remarks contrast with Kuroda’s earlier firm commitment to take additional easing, either by expanding asset purchases or lowering a subzero short-term interest rate, “without hesitation.” Financial stocks were encouraged by his comments, with the Topix banking subindex recently rising 0.2%.
In Australia, declines in commodity prices offset gains from financial shares, which edged up 0.1%.
Brent crude, the global oil benchmark, was recently down 0.4% at $51.75 a barrel. Producers of the commodity felt the pinch, with Santos Ltd. /zigman2/quotes/207349564/delayed AU:STO -1.86% down 2.7%, Oil Search Ltd. /zigman2/quotes/204702973/delayed AU:OSH -0.47% shedding 1.8% of its value and Woodside Petroleum Ltd. /zigman2/quotes/203437212/delayed AU:WPL -0.15% falling 1.6%.
Among the region’s bigger stock movers, Korea’s Hanjin Shipping Co. gained 5.6% on news it was seeking buyers for some of its ships in order to pay its creditors. Elsewhere, Australia’s Crown Resorts Ltd. /zigman2/quotes/202248880/delayed AU:CWN -1.18% was off 8.6%, after Chinese authorities said they had detained a number of its employees on suspected gambling crimes.
On the data front, retail sales figures out of the U.S. on Friday rose 0.6% as expected, hardly moving the needle on federal-funds futures and having little impact on the probability of a Fed rate increase in Asian markets.
Within the region, market participants are watching out for third-quarter GDP data from China, due Wednesday.