Asian stock markets traded mostly higher Monday, with shares in Sydney resilient despite uncertainty over who would form Australia's next government after the country's federal election resulted in a hung parliament.
Japan’s Nikkei 225 Index slid 62.69 points, or 0.7%, to close out the week’s first session at 9,116.69
Hong Kong’s Hang Seng Index stumbled 92.81 points, or 0.4%, to 20,889.01
Another liquidity-driven rally for the rest of 2010 can't be ruled out as the price-to-earnings valuation of most stock markets worldwide are in the low teens while interest rates remain low.
Australia's two major parties, the centre-left Labour administration of Prime Minister Julia Gillard and the Liberal-National conservative bloc of Tony Abbott, said Sunday a new government likely won't be formed for a number of days.
Negotiations were beginning with independent lawmakers who could decide who takes power in the country's first hung parliament in 70 years.
Mining stocks were mostly higher, with BHP Billiton up 1.0%, Rio Tinto 1.2% higher, while Alumina rose 2.6%.
Westpac fell 2.2% after a weaker than expected third quarter earnings report, which showed the bank struggling to grow revenue.
Foster's was up 5.5% after reports over the weekend indicated that brewing major SABMiller is considering a GPB7 billion bid for the group's beer arm, which is more than the group's total market capitalization at Friday's closing price.
Investors in Tokyo were reluctant to take large positions, with shares weighed by Japan's Finance Minister Yoshihiko Noda saying Monday he hasn't heard that Prime Minister Naoto Kan and Bank of Japan Gov. Masaaki Shirakawa will meet this week.
Several local media reported last week that Kan and Shirakawa may meet this week--possibly as early as Monday--to discuss ways to cope with a rising yen and slowing economic growth. There has been growing market speculation that the central bank may ease policy further if the governor does indeed meet with the prime minister.
Exporters were weak with Toshiba down 1.7%, Nikon off 1.5%, Honda Motor off 1.4%. Sharp dropped 2.6%, extending Friday's 2.7% fall, on concerns about possible weakness in liquid crystal display panel demand.
In Seoul, buying by foreign investors helped to bolster the benchmark index.
Builders rose on expectations the government may soon take measures to boost the local real estate market. Hyundai Engineering & Construction added 2.8% and GS Engineering tacked on 3.5%.
Ssangyong Motor added 12.8%, helped by news India's Mahindra & Mahindra moved one step closer to buying a controlling stake in the Korean company by signing a memorandum of understanding for the purchase.
Woori Finance shares shed 1.5% amid concerns South Korea's largest financial holding company by assets may be looking for ways to avoid merging with a domestic rival by trying to put together a block of financial investors.
KT Corp. said Monday it has been approached by Woori about acquiring a portion of the 57% stake the government put up for sale. A Woori official said the company had no comment, while a KT spokesman said the firm hasn't decided whether it will bid.
In the foreign-exchange markets, the yen gained ground after Kyodo reported that Kan and Shirakawa held talks by phone on Monday to exchange views on recent developments in financial markets, but they didn't discuss intervention to cap the Japanese currency's recent strength.
Against the yen, the U.S. dollar was buying Y85.31, compared with Y85.75 late in New York on Friday, while the euro was trading at Y108.47, compared with Y108.71. The euro was at $1.2713 against the U.S. dollar, from $1.2706.
Elsewhere;
Shanghai’s CSI 300 Index stepped back 2.14 points, to 2,896.19
Singapore’s Straits Times Index lopped off 10.49 points or 0.4%, to 2,925.99
Korea’s Kospi index fell off 7.83 points, or 0.4%, to 1,767.71
Taiwan’s Taiex Index moved up 48.62 points, or 0.6%, to 7,975.93
New Zealand’s NZX index improved 16.37 points, or 0.6%, to 3,016.78
Australia’s S&P/ASX 200 ducked back 1.90 points to 4,429
