Australian stocks declined Tuesday after the central bank trimmed the nation’s economic growth outlook and Chinese banks slipped after Moody’s said a mainland audit has understated risk to lenders from loans to local governments.
In Japan, the Nikkei 225 average gained a slight 7.37 points, or 0.07%, to 9,972.46
Hong Kong’s Hang Seng Index settled back 22.52 points, or 0.1%, to 22,747.90
Many regional markets were confined to narrow ranges, straddling Monday’s closing levels in the absence of cues from U.S. markets, which were closed for a holiday Monday. The tone was also cautious as traders awaited U.S. nonfarm payrolls data due this week.
The drop in Sydney stocks came after the Reserve Bank of Australia left its policy interest rate unchanged at 4.75%, with Gov. Glenn Stevens said that the nation’s "growth through 2011 is now unlikely to be as strong as forecast earlier."
Shares of National Australia Bank Ltd. gave up 1.1% and Commonwealth Bank of Australia lost 0.5% to lead the financial sector broadly lower. That offset mild gains among the big miners, led by a 0.5% rise in shares of BHP Billiton Ltd. and a 0.2% advance for Rio Tinto Ltd.
Some consumer stocks also advanced in Hong Kong after a surge in the city’s retail sales in May, with apparel maker Esprit Holdings Ltd. adding 1% and Haier Electronics Group Co. gaining 2.1%.
In Tokyo, meanwhile, Fast Retailing Co. shed 1.8% after the firm’s same-store sales figure for June slipped 0.5%.
Shares of Tokyo Electric Power Co. Incsurged 5.1% after it said it would pay estimated additional compensation of up to ¥48 billion ($593 million U.S.) for evacuees from the nuclear disaster at its Fukushima Daichii plant in March.
NEC Corp. climbed 1.6% after the company and Lenovo Group Ltd. announced details of their joint venture for personal computers in Japan. Lenovo rose 1.3% in Hong Kong.
Deal speculation also lent a hand to some regional stocks, with Hynix Semiconductor Inc. climbing 3.9% in Seoul on reports that Hyundai Heavy Industries Co. may bid for a controlling stake in the chip maker. Hyundai Heavy shares fell 1.3%.
Shares of Osaka Securities Exchange Co. surged 8% on the Jasdaq exchange after an Asahi Shimbun report said the Tokyo Stock Exchange may launch a takeover bid for the rival bourse
CHINA
Chinese banks were pressured after Moody’s Investors Service said it believed that last month’s audit report by the National Audit Office is "understating the size of the local government loans that could become problematic."
Shanghai’s CSI 300 Index inched up 0.52 points to 3,122.50
Based on its assessment of the loan classifications and risk characteristics, "we conclude that the potential scale of the problem loans at Chinese banks may be closer to our stress case than our base case," Moody’s said.
China Construction Bank Corp. lost 1.2%, while Bank of Communications Co. fell 0.7% in Hong Kong; in Shanghai, they dropped 1% and 0.5%, respectively.
Also weighing on sentiment, shares in Hong Kong and Shanghai, Chinese media reported Tuesday that the country’s central bank has heightened expectations of an imminent interest-rate increase, with one newspaper saying a hike could come as soon as this weekend.
Mainland Chinese real-estate major China Vanke Co. jumped 1.5% in Shenzhen after posting strong June sales. The move helped lift the broader sector, with China Resources Land Ltd. climbing 3.4% in Hong Kong.
In other markets;
Korea’s Kospi Index progressed 16.45 points, or 0.8%, to 2,161.75
Taiwan’s Taiex Index added 9.72 points, or 0.1%, to 8,784.44
Singapore’s Straits Times Index dumped 23.75 points, or 0.8%, to 3,129.69
New Zealand’s NZX 50 Index faded 4.90 points, or 0.1%, to 3,473.59
Australia’s S&P/ASX 200 Index removed 12.60 points, or 0.3%, to 4,598.10
