The FINANCIAL — According to Dow Jones, Asian markets mostly declined on July 4, with Japanese shares extending losses as shares of automobile giants Toyota Motor Corp. and Honda Motor Co. dropped after reporting lower U.S. sales in July. Regional banks such as Sumitomo Mitsui Financial Group and Industrial & Commercial Bank of China dipped after a lower finish on Wall Street.
South Korean shipbuilding stocks slumped after Daewoo Shipbuilding and Marine Engineering Co. and Hyundai Mipo Dockyard Co. announced cancellation of ship orders Friday because customers had failed to pay. Regional shipping shares also dropped sharply, tracking global freight rates.
Australian stocks wavered between gains and losses as advances in energy producers such as Woodside Petroleum were countered by declines in banks.
Linus Yip, a strategist at First Shanghai Securities in Hong Kong, said investors were likely to adopt a wait-and-watch attitude ahead of key corporate results and the U.S. Federal Reserve's Federal Open Markets Committee's decision on interest rates this week.
"Investor sentiment is quite cautious. Turnover is shrinking and the market is losing momentum," said Yip. "I don't think (good) results will surprise the market. But if they aren't as good as expected, there could be more downside."
Japanese indexes took losses into a second session, with the Nikkei 225 Average dropping 0.9% to 12,972.05 after briefly crossing over into positive territory, while the broader Topix index gave up 1.3% to 1,256.51.
In Hong Kong, the Hang Seng Index fell 1.1% to 22,603.83 and the Hang Seng China Enterprises Index gave up 1.3% to 12,376.87. China's Shanghai Composite dropped 0.9% to 2,776.83, after closing 0.9%higher in the previous session.
Australia's S&P/ASX 200 index recently slipped 0.1% to 4,899.40, after climbing as high as 4,936.40 earlier in the day. South Korea's Kospi lost 2.3% to 1,536.88 and New Zealand's NZX 50 index rose 0.5% to 3,319.11. Singapore's Straits Times index shed 1.1% and Taiwan's Taiex gave up 0.5%.
India's Sensitive Index, or Sensex, fell 0.4% to 14,597.80 in early trading after closing 2.1% higher in the previous session.
Regional detail
Shares of Toyotasank 3.7% and Hondaskidded 6.3% on weak U.S. sales reports. Toyota sales dropped 11.9% in July from the year-earlier month, while Honda, which was expected to post gains, saw its sales fall 1.6%.
In Seoul, Daewoo Shipbuilding stock plummeted 14.1% after the company Friday said it had canceled a $610 million order to build eight container ships. Hyundai Mipo Dockyard Co.stock tumbled 8.1% after it canceled a 197 billion won ($194 million) order for four product carriers, according to reports.
"Operationally at the micro level, there should be no earnings impact for both yards through 2010 as a result of these events. We are more concerned that these two separate events may have industrywide macro implications," wrote Credit Suisse analysts in a note.
"If these announced events are beginnings of a genuine credit crunch, current global backlog size as reported may be overstated on recent order additions, and these conditions may lead to further contraction in new (ship) building contract consummations in our view," they added.
Shipping stocks also declined on a sharp fall in freight rates recently, with Mitsui O.S.K. Linesdropping 4.5% in Tokyo and STX Pan Ocean Co.dropping 4.2% in Seoul and 6.5% in Singapore.
Shares of Korea Exchange Bank dropped 2.7% in Seoul on reports that HSBC Holdings Plc.is seeking to negotiate a lower price to buy Lone Star Funds' 51% stake in Korea Exchange Bank, in view of a decline in the South Korean lender's shares over the past 11 months. According to a Bloomberg report, people familiar with the matter said HSBC still is in talks to buy Lone Star's stake in KEB, but wouldn't say how much of a price reduction it is seeking.
HSBC shares slipped 0.6% in Hong Kong trading, ahead of its April-June period earnings report, due later in the day.
Most regional financials dropped on persistent worries about the health of the global credit markets, with Sumitomo Mitsui Financial Grouplosing 5% in Tokyo and Bendigo & Adelaide Bankshedding 2.5% in Sydney, while Samsung Securities Co. declined 1.9% in Seoul.
In Shanghai, shares of China Life Insurance Co.gave up 1%, after rising 3.1% on Friday, while Industrial & Commercial Bank of China declined 1.2%. In Hong Kong, China Lifedropped 0.3%, while ICBCshares gave up 0.9%.
Some energy stocks advanced on higher crude-oil prices, with Inpex Holdingsrising 1.3% in Tokyo and Woodside Petroleumclimbing 2.8% in Sydney.
September crude-oil futures climbed as much as $1.17 to $126.27 a barrel in electronic trading, after adding $1.02 to $125.10 a barrel Friday on the New York Mercantile Exchange on August 1.
In Asian currency trading, the U.S. dollar bought 107.63 yen, compared with 107.70 yen in New York on August 1.
Friday on Wall Street, the Dow Jones Industrial Averagedropped 0.5% to 11,326.32 and the Nasdaq Compositegave up 0.6% to 2,310.96, while the S&P 500 indexshed 0.6% to 1,260.31.
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