Asia Market Report

Asia: Mixed end to poor week

Asian markets were mixed, with the Japanese market retreating while Hong Kong stocks were firmer on balance.

Japanese stocks eased back after capital spending by Japanese businesses fell for the ninth quarter in succession in the three months to end-June.

Investment house Daiwa tumbled after its banking partner Sumitomo Mitsui Financial divulged that the two companies are in tlks aimed at dissolving their partnership.

Silicon wafer maker Sumco crumbled after a newspaper report that it is cutting back production capacity.

On the bright side camera and printer maker Canon climbed after reasonable August sales figures from some US retailers.

The Nikkei 225 fell 27 points to 10,187.

In Hong Kong holding company China Resources Enterprise, which operates in many sectors including retailing and ports, was a stand-out after JP Morgan and Nomura Holdings both upgraded the stock. JP Morgan lifted its rating from ‘neutral’ to ‘overweight’ and Nomura upgraded the stock to ‘buy’.

Banking shares were wanted after China’s banking regulator watered down draft proposals on lenders’ capital bases. Industrial and Commercial Bank of China and China Construction Bank led the sector higher.

Property shares were also in fashion with China Vanke sharply higher after reporting improved year on year sales in August.

The Hang Seng index rose 556 points to breach the 20,000 level. It ended the week lower than it started it, however, at 20,318.