Japanese stocks miss out on Asian rally

Japanese stocks bucked the broadly firmer trend seen elsewhere in the region on Tuesday as investors returned from a three-day break in bearish mood.

The Nikkei 225 Average closed 1.2 per cent lower at 9,300.46, having dropped as much as 1.7 per cent earlier in the session. The broader Topix index shed 1 per cent to 832.26.

Technology stocks led the retreat after investors responded negatively to quarterly revenue figures from Texas Instruments’ and IBM. Tokyo Electron, the chip equipment manufacturer, fell 2.9 per cent to Y4,680 while components maker TDK shed 2.1 per cent to Y4,995 and Fujitsu lost 1.7 percent to Y581.

Other big exporters were hurt by the strength of the yen, which hovered around a seven-month high against the dollar. Honda Motor fell 1.8 per cent to Y2,605, Toyota slid 2.6 per cent to Y3,055, while Sonylost 2.8 per cent to Y2,336.

Daiwa Securities shed 3.1 per cent to Y376 following local press reports that the brokerage had probably suffered a second successive quarterly net loss between April and June, due to financial market turmoil stemming from the eurozone debt crisis.

But there was a more sanguine mood in Shanghai amid persistent hopes that the Chinese authorities would unwind policy tightening measures in the second half of 2010.

The Shanghai Composite index rose 2.2 per cent to 2,528.73, giving a gain of 4.3 per cent so far this week – its best two-day advance since May.

Property stocks continued to lead the way ahead, with Poly Real Estate up 2.9 per cent to Rmb11.93 and Gemdale gaining 2 per cent to Rmb6.69.

Among the banks, Industrial and Commercial Bank of China added 1.2 per cent to Rmb4.24 and China Construction Bankedged up 0.8 per cent to Rmb4.81.

Financials also gained ground in Hong Kong after China said it would allow the sale of renminbi-denominated financial products in the territory – a move seen as an important step in internationalising the Chinese currency, and one that would provide an important new revenue stream for financial groups.

BOC Hong Kong rose 1.8 per cent to HK$19.10 and was the day’s most active stock, while China Life Insuranceadded 1.5 per cent to HK$33.65.

The Hang Seng index rose 0.9 per cent to 20,264.59.

Australian stocks snapped a three-session run of losses as commodity stocks were boosted by higher metal and oil prices.

BHP Billiton rose 1.5 per cent to A$38.30 while Rio Tintoclimbed 2.3 per cent to A$66.50. Aquarius Platinumbounced 13.6 per cent to A$4.51. after slumping 25 per cent on Monday, after South African authorities indicated it would hav some flexibility on improving safety at its mines.

The S&P/ASX 200 index rose 1 per cent to 4,403.6.

Jakarta set a record closing high as gains for agriculture stocks helped the market recover from early weakness.

The composite index rose 0.7 per cent to 2,995.44, less than a point away from a record intra-day intra-day high struck on May 4. Astra Agro Lesta, the palm oil producer, climbed 6.6 per cent to Rp20,250 and London Sumatrajumped 7.6 per cent to Rp8,500.

Optimism over the domestic earnings outlook bolstered Taipei as investors looked beyond results from the US. Taiwan Semiconductor Manufacturingrose 0.7 per cent to T$61.50 and Mediatekadded 0.9 per cent to T$468, while HTC, the smartphone maker, jumped 1.9 per cent to T$577.

The weighted index rose 0.8 per cent to 7,712.03.

In Singapore, the Straits Times inched up 0.1 per cent to 2,948.61, the Kospi benchmark in Seoul rose 0.3 per cent to 1,736.77 but Mumbai’s BSE Sensex slipped 0.3 epr cent to 17,878.14.