Shanghai stocks ended sharply higher Wednesday on speculation that the Chinese government was considering a fiscal stimulus package, boosting shares in Hong Kong and paring losses in some other regional markets.
The benchmark Nikkei 225 index fell 13.36 points or 0.1% to finish at 12,851.69 while the benchmark Hang Seng index closed up 446.89 points or 2.18% at 20,931.26.
On the economic front, Japan's all-industry activity index dropped 0.9% on month in June, the Ministry of Economy, Trade and Industry reported Wednesday. The decline matched the estimates of most analysts. The index for the three months to June rose 0.5% from the previous quarter. The ministry also said that the index in June was 1.2% below its level a year earlier.
Meanwhile, the Bank of Japan said in its Monthly Report of Recent Economic and Financial Developments for August that the Japanese economic growth has been sluggish. According to the central bank, high energy and material prices and weak exports growth contributed to the sluggishness.
The financial sector recouped some of the early losses and closed mixed. Mitsubishi UFJ Financial Group fell 1.5% and Sumitomo Mitsui Financial Group lost 1.0%, but Resona Holdings rose 0.9% and Mizuho Financial Group edged up 0.2%. Insurers also closed mixed, with Mitsui Sumitomo Insurance plunging 3.0% and Sompo Japan Insurance gaining 0.4%.
Toyota Motor lost 1.8% following a report that the automaker will hike the price of some domestically sold hybrids and commercial vehicles by around 1-3% in September. Among other exporters, Sony plunged 2.8%, Canon fell 2.0%, Nissan Motor declined 0.9% and Honda Motor dropped 1.7%.
Shippers finished lower, with Kawasaki Kisen falling 1.5%, Mitsui OSK Lines plummeting 2.5% and Nippon Yusen losing 2.7%. Oil and gas miner Inpex Holdings jumped 2.5%, Nippon Mining Holdings added 0.9% and Nippon Oil gained 1.2% after oil rebounded Tuesday. Among trading houses, Marubeni and Itochu added 1.5% each and Mitsubishi Corp. soared 4.3%, while Mitsui & Co. slipped 0.2%.
Seven & I Holdings advanced 1.2% on the back of a report that the retailer will open its first discount store in Tokyo on August 29. Fast Retailing rose 1.1%.
The Chinese market closed sharply higher on expectation that the government will soon undertake measures to boost the economy and the stock market. Investment bank JPMorgan said in a note that the Chinese government is considering a stimulus package of 200-400 billion yuan. Brokerages, property developers and banks surged.
The benchmark Shanghai Composite Index closed up 178.81 points or 7.63% at 2,523.28. The index has lost 9.09% since the beginning of the month and 52% so far this year.
CITIC Securities surged by the 10.0% daily limit and Haitong Securities also jumped 10%. Among property developers, China Vanke gained 8.4% and China Merchants Property Development climbed 9.0%. In the banking space, Industrial Bank rose 7.4% after the bank reported that first-half net profit rose 79.6% from a year earlier. Industrial and Commercial Bank of China advanced 6.5% and Huaxia Bank soared 10.0%.
Power producers also closed higher, with Huadian Power International gaining 4.4% and Huaneng Power International adding 0.8%. China South Locomotive & Rolling Stock, which debuted in Shanghai on Monday, moved up 4.9% after rising nearly 70% in the first two trading days.
Tsingtao Brewery gained 7.1% after the company reported that its first-half net profit rose 32.39% on year-over-year basis to 381.13 million yuan. Hainan Airlines advanced 7.1% after the company projected a 50% increase in first-half net profit on year-over-year basis.
Elsewhere:
Taiwan's Taiex closed up 0.9% at 7,040.
Singapore's STI closed up 0.9% at 2,751.
Malaysia's KLCI closed up 0.4% at 1,073.
Indonesia's Jakarta Composite index closed up 1.3% at 2,069.
India's Sensex closed 1.0% at 14,688.
South Korea's Kospi slipped 0.1%.
New Zealand's NZX 50 index added 0.4%.
Australia's All Ordinaries index advanced 67.1 points or 1.4% to finish at 4,997.5.
with files from other wire services
