Australia bucks weaker regional trend

Asian stocks mostly edged back as investors largely shrugged off an overnight rally on Wall Street and focused instead on a fresh downgrade to Italy’s credit rating.

Activity in the region was subdued by holidays for Hong Kong and Shanghai.

Shares in Tokyo hovered near levels not seen since the earthquake this year as foreign investors continued to sell, according to traders.

The Nikkei 225 Average fell 0.9 per cent to 8,382.98, after touching 8,343.01, the lowest since March 15. The broader Topix index shed 1.4 per cent to 726.25.

Banking stocks remained under pressure amid persistent concerns about their European counterparts.

Mitsubishi UFJ Financial fell 1.8 per cent to Y325 and Sumitomo Mitsui Financial shed 2.3 per cent to Y2,066.

Exporters also continued to retreat as the stubborn strength of the yen continued to fuel earnings uncertainty.

Toyota Motor fell 2 per cent to Y2,517, TDK lost 3.8 per cent to Y2,451 and Sony gave up 1.8 per cent to Y1,404.

Fast Retailing fell 4 per cent to Y13,340 as disappointing sales numbers from the budget clothing group triggered selling.

Seoul was also hit by selling from overseas investors, as well as a lack of buying support from pension funds, and the Kospi index closed 2.3 per cent lower to 1,666.52.

Construction stocks were among the biggest fallers amid concerns that they might not meet their order guidance for this year.

Daewoo Engineering and Construction fell 7.7 per cent to Won8,030 and Hyundai Engineering and Construction shed 9.1 per cent to Won52,200.

Australian stocks bucked the broadly weaker trend in the region with the S&P/ASX 200 index rising 1.4 per cent to 3,926.5 as mining and resource stocks attracted buyers.

Woodside Petroleum jumped 4.1 per cent to A$32.80 and BHP Billiton climbed 3.8 per cent to A$35.13.

Mumbai lost ground for a fourth successive session, with financials leading the retreat.

State Bank of India fell a further 3.9 per cent to Rs1,718.40 in the wake of Tuesday’s rating downgrade while ICICI Bank shed 2.7 per cent to Rs779.25.

The BSE Sensex index fell 0.5 per cent to 15,792.41.