Asian stocks erased gains and traded mostly lower Thursday as investors assessed whether the latest round of interest rate cuts will boost business. Shares of China Life led Chinese financial stocks higher after Beijing indicated it would increase liquidity in the banking system.
The benchmark Nikkei 225 Stock Average shed 79.9 points or 1% to 7,924.2 while Hong Kong's Hang Seng index closed down 0.6% at 13,509.
On the economic front, Japanese capital spending continued to fall in the third quarter, suggesting downward revision to GDP numbers next week. Capital spending declined 13% in three months to September from the previous year, a report released by Ministry of Finance showed. This marked the sixth consecutive decrease in capital investment. The drop was steeper than the 9.8% decrease expected by economists. Excluding software, capital spending decreased 13.3% during the third quarter, while economists had expected a 10.9% annual drop.
Automakers fell on firmer yen and after a report issued on Tuesday showed the U.S. auto sales plunged in November to their lowest level since 1982. Honda plunged 6.2%, Toyota Motor shed 3.6%, and Nissan Motor plummeted 6.4%. Adding to the gloom, Honda said Thursday that it expects the U.S. vehicle market to fall by about 5% next year.
Panasonic tumbled 5.2% after the Nikkei business daily said that the world's biggest maker of plasma TVs has raised its buyout offer for Sanyo Electric by 10 yen to 130 yen per share. Goldman Sachs said Thursday that it has rejected an offer from Panasonic to buy its shares in Sanyo, as the offer price was too low.
However, Japan's top refiner Nippon Oil climbed 3.4% and sixth-ranked Nippon Mining Holdings surged 11.3% after they said that they are planning to merge next October to better compete in the global oil market.
Bank shares fell, with Japan's top lender Mitsubishi UFJ Financial Group losing 2.1% and Mizuho Financial Group falling 2.8%.
CHINA
The Chinese stock market extended its gains, with the key Shanghai composite index closing above the 2,000 mark, led by heavyweight insurers, banks and oil stocks. The benchmark Index closed up 36.1 points or 1.8% at 2,001.5, but off the day's high. The smaller Shenzhen Component Index added 89.9 points or 1.3% to close at 7,130.9.
China Merchants Bank advanced 2.9% and Bank of China rose 1.6%, while CITIC Securities climbed 2.9%, Haitong Securities jumped 3.7% and Sinolink Securities rose by the daily limit of 10%.
Market heavy weight PetroChina gained 1.8% and Sinopec surged 5.8%. China Life Insurance added 5.4% and Ping An Insurance soared 7.5%.
In the property sector, China Vanke edged up 0.4%, but Gemdale lost 0.5% and COFCO Property slipped 0.2%.
Elsewhere:
Taiwan's Taiex closed down 1.2% at 4,254.
Singapore's STI closed up 0.2% at 1,643.
Indonesia's Jakarta Composite Index closed up 1.1% at 1,205.
Malaysia's KLCI closed little changed at 846.
India's Sensex closed up 5.5% at 9,229.
Australia's S&P/ASX 200 also closed nearly flat for the day, easing 0.04% to 3,532.40.
New Zealand's NZSX-50 up 0.9% at 2,730.68.
with files from other wire services
