Asian-Pacific Markets Decline;
Nikkei Falls on Profit Warnings
A WALL STREET JOURNAL ONLINE News Roundup
Asian-Pacific markets finished mostly lower Wednesday as sluggish pre-holiday trading in the U.S. offered little inspiration to a lackluster trading session in Asia.
Profit warnings from several software companies weighed down U.S. stocks, leading the Dow Jones Industrial Average 0.21% lower and the Nasdaq Composite Index down 0.37%.
In addition, U.S. markets closed at 1 p.m. EDT Tuesday ahead of the Fourth of July holiday and will be closed all day Wednesday, giving investors in the Asia a reason to hold onto their positions until U.S. stocks resume trading on Thursday.
Tokyo's Nikkei 225 average fell 1.5%, led by futures selling due to lingering anticipation of profit warnings from Japan's technology companies and firms in other sectors.
Recent downward earnings revisions from non-tech firms such as Showa Denko and Toagosei have weighed down Japan's market as these are among the lower-priced and larger-volume shares that have attracted many buyers lately.
Taiwan shares tumbled as the Taiwan Stock Exchange Weighted-Price Index shed 104.66, or 2.2%, to 4739.16, its lowest close this year. Investors were concerned that problems at Wellphone Securities could spread. Late Monday, Wellphone said it had shut down to check its books, which include about NT$6 billion in debt. Government regulators are investigating the company's financial dealings.
Philippine shares finished lower for the tenth straight session amid foreign selling triggered by the weak peso and lingering political and economic concerns. The dollar reached as high as 53.10 pesos in morning trading after closing at 52.94 pesos on Tuesday.
Singapore's stocks slipped, led by bank issues, as chances of a bidding war in the consolidating sector appear to be growing increasingly faint. Overseas Union Bank, which is considering takeover bids from United Overseas Bank and DBS Group Holdings, fell 2.1% after DBS president Jackson Tai said that UOB's offer for OUB is close to fair value. His remarks -- suggesting that DBS may only at best match UOB's offer -- disappointed investors, who have been hoping for a bidding war.
Market Focus
1Japan: Profit Warnings Sink Shares
2Hong Kong: Shares Close Slightly Higher
Meanwhile, Hong Kong stocks edged higher in trading dominated by Pacific Century CyberWorks, which jumped 7.8% as investors bet on positive news from its new Internet strategy expected to be announced by Chairman Richard Li after the market closes. Earlier, the company announced 340 job cuts3 as part of the plan.
While CyberWorks' job cuts won't translate to huge savings for a company with more than 15,000 employees, "the cuts show signs that it's quite eager to streamline operations and improve prospects," said Ben Kwong, associate director at KGI Asia.
Indian shares ended flat as continued concerns about the financial position of the country's largest mutual fund, Unit Trust of India, were offset by bargain hunting by foreign funds in select blue chips.
Early morning, trading on India's National Stock Exchange was suspended for over an hour due to an abnormal trading which resulted in the index surging by close to 40% to 1494.60.
But for the most part, India markets remained weak amid fears that UTI will reduce its equity exposure as part of its plan to restructure operations. Markets also received a jolt after UTI Chairman P.S. Subramanyam resigned Tuesday night following the Finance Ministry's decision to scrutinize their operations.
In dollar terms, at 6 a.m. EDT, the Asian-Pacific sector of the Dow Jones Global Indexes was down 1.03 to 86.60, after rising 0.21 on Tuesday. The Dow Jones World Stock Index shed 0.74 to 189.78, after sliding 0.80 in the previous session.
Agriculture and shipbuilding shares led the Dow Jones Global Industry Groups, while consumer-electronics and wireless-communications issues were among the laggers.
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