Chinese shares in Shanghai and Hong Kong went downhill Thursday, reversing some gains from the previous session, when they soared on speculation that Beijing will announce a stimulus plan to support a slowing economy.
The benchmark Nikkei 225 index settled near a five-month low at 12,752.21, down 99.48 points or 0.8% while the benchmark Hang Seng index closed down 539.20 points or 2.58% at 20,392.06.
On the economic front, the Ministry of Finance said that Japan's merchandise trade balance plummeted 86.6% in July to 91.1 billion yen, marking the fifth straight month of decline, well short of analyst expectations of 235 billion yen and less than the revised 121.9 billion yen surplus in June. The unadjusted merchandise trade balance was 172.4 billion yen in July, less than the 351 billion yen forecast and the revised 131.3 billion yen surplus in the previous month.
The Ministry of Finance also said that foreign residents became net buyers of Japan stocks last week, reversing their recent course. Foreigners purchased a net 43.8 billion yen worth of Japan equities for the week ending August 10 and were buyers of a net 504.6 billion yen worth of Japan bonds and notes for the third straight week last week.
Meanwhile, the Japan Machine Tool Builders Association confirmed the preliminary report and said that Japan's machine tool orders declined 8.9% year-on-year to 123.81 billion yen in July. In June, orders were down 2.7%. On a monthly basis, total orders fell 3.6% compared to a 3.5% fall recorded in June.
In the banking space, Mizuho Financial Group fell 1.7%, Mitsubishi UFJ Financial Group dropped 0.9% and Sumitomo Mitsui Financial Group lost 2.1%.
Among exporters, Toyota Motor declined 0.8% following a report that the automaker plans to trim its global sales target for 2009 to around 9.8 million vehicles from an earlier forecast of 10.4 million. Honda Motor shed 1.4%, digital camera maker and exporter Canon dropped 1.0% and Sony gave away 1.2%.
Tech stocks closed weak. Advantest declined 1.5%, Kyocera plunged 2.5%, Fanuc gave away 0.7%, Matsushita Electrical Industrial eased 0.9%, NEC plummeted 3.0% and Fujitsu dipped 1.7%.
Oil-related stocks advanced on the back of higher oil prices. Inpex Holdings rose 2.7%, Nippon Oil added 1.7% and Nippon Mining Holdings gained 1.4%.
The Chinese market closed sharply lower on profit taking following Wednesday's rally. Investor sentiment was dented, as the government failed to confirm rumors of a package of measures to stimulate the economy and markets. Steelmakers and power producers fell, while brokerages extended their gains. The benchmark Shanghai Composite Index closed down 91.57 points or 3.63% at 2,431.72.
Among steelmakers, Baoshan Iron & Steel shed 5.1% and Maanshan Iron & Steel fell 4.8%. Panzhihua New Steel & Vanadium advanced 0.7% after its first-half profit rose by 0.33% on year.
In the power sector, Huadian Power International tumbled 8.4%. The company said that it has raised its on-grid tariffs by an average 22.59 yuan per megawatt hour or 5.78% from today after the government announced a power tariff hike. Huaneng Power International and GD Power Development plunged 10.0% each.
However, brokerages extended their gains. CITIC Securities rose 3.7% and Haitong Securities gained 4.7%.
China South Locomotive & Rolling Stock, which debuted on Monday, tumbled by the 10.0% daily limit after rising 78% in the first three trading days. Its Hong Kong shares debuted with modest gains today.
Banks retreated, with China CITIC Bank falling 1.5% after the bank said that first-half net profit rose 162.6% from a year earlier to 8.42 billion yuan. Industrial and Commercial Bank of China fell 2.9%.
Bank of Nanjing shed 4.7%, despite reporting a first-half net profit increase of 125.6% to 788.32 million yuan. Shenzhen Development Bank dropped 3.1%. The company siad that its first-half net profit rose by 90.7% to 2.14 billion yuan from a year ago.
China Petroleum & Chemical gave away 6.6%, while index heavyweight PetroChina declined 3.7%.
Elsewhere:
Taiwan's Taiex closed down 1.7% at 6,918.
Singapore's STI closed down 1.4% at 2,713.
Malaysia's KLCI closed down 1.8 points at 1,071.
Indonesia's Jakarta Composite index closed up 0.9% at 2,088.
Australia's S&P/ASX 200 fell 1.1%.
South Korea's Kospi dropped 1.8%.
New Zealand's NZX 50 index ended little changed.
with files from other wire services
