Asian stock markets mixed as Europe finance jitters offset flurry of corporate deals

Monday, September 27, 2010

Asia shares mixed as bank worries offset deals

BANGKOK — Asian stock markets were mixed Tuesday as renewed worries about the health of Europe’s banks offset optimism from a flurry of corporate deal making.

The region’s lackluster performance followed a down session on Wall Street, where losses were led by financial stocks after Moody’s Investors Service cut its rating on Anglo Irish Bank Corp., one of Europe’s more troubled lenders.

With no major economic reports to drive trading, investors also focused on major deals in the airline, consumer products and retailing industries. The acquisitions are seen as a sign of improved corporate confidence but weren’t enough to extend the gains that U.S. stocks have made in September.

Japan’s Nikkei 225 stock average fell 68.94 points, or 0.7 percent, to 9,534.20 with exporters hurt by the yen’s sustained strength.

Investors are closely monitoring the Japanese currency, which authorities may try to weaken again soon after the central bank earlier this month bought dollars to weaken the yen for the first time in six years. The Nikkei financial daily reported that the central bank will discuss further monetary easing when it meets next week.

South Korea’s Kospi lost 0.4 percent to 1,861.40, Hong Kong’s Hang Seng was off 0.1 percent at 22,314.14 and the Shanghai Composite Index fell 0.3 percent to 2,618.85.

Among gaining markets was Australia where the S&P/ASX 200 benchmark rose 0.1 percent to 4,679.70. Indexes in India, Singapore, Taiwan, Malaysia and Indonesia also advanced.

Shares of Asian banks retreated on the financial sector worries, with Japan’s Sumitomo Mitsui Financial Group sliding 3.1 percent and Korea’s Shinhan Financial Group down 1.7 percent.

Hyundai Motor Co. tumbled 3.1 percent in Seoul, losing ground for a second day the Korean automaker announced a recall of 139,500 Sonata sedans in the U.S.

In New York on Monday, the Dow Jones industrial average fell 48.22, or 0.4 percent, to close at 10,812.04.

The Standard & Poor’s 500 index dropped 6.51, or 0.6 percent, to 1,142.16, while the Nasdaq composite index fell 11.45, or 0.5 percent, to 2,369.77.

In deal news, consumer products giant Unilever NV agreed to buy beauty products maker Alberto Culver Co. for $3.7 billion. Southwest Airlines Co. will purchase AirTran Holdings Inc. for about $1.4 billion. Wal-Mart Stores Inc. proposed to buy South African consumer goods distributor Massmart Holdings Ltd. for about $4.25 billion.

Benchmark crude for November delivery was down 38 cents at $76.13 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 3 cents to settle at $76.52 on Monday.

In currencies, the dollar slipped to 84.19 yen from 84.26 yen late Monday in New York. The euro rose to $1.3463 from $1.3431.

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