via Khmer NZ
JULY 21, 2010
By COLIN NG And LESLIE SHAFFER
Most Asian markets finished higher Wednesday as steel stocks rallied on news China is aiming to consolidate the local industry while Japanese shares were hurt on fears that the strong yen would hurt profits.
Japan's Nikkei Stock Average shed 0.2% to 9278.83, but Hong Kong's Hang Seng Index advanced 1.1% to 20487.23, and China's Shanghai Composite rose 0.3% to 2535.39, stretching its winning run into a third straight session.
Indonesia shares ended up 0.6% at a record high of 3013.40 as local institutional funds bought commodity- and consumer-related blue chips in anticipation of strong first-half earnings.
Steel shares around the region rallied on news China is aiming to slash the number of steel makers in the country by about 75%. Hopes that spot prices had reached a bottom also supported prices, with Deutsche Bank analysts writing that about 40 medium to small mills in China had raised their prices modestly in the past two days.
"With steel spot prices bottoming out, we believe the short-term market sentiment will be positive, supported by the spot steel price hikes, large-scale production cuts and a government crackdown on overcapacity/high energy-consumption producers," Deutsche Bank analysts said.
Angang Steel Co. surged 7.9% and Maanshan Iron & Steel Co. jumped 7.5% in Hong Kong, while Baoshan Iron & Steel Co. rose 1.1% and Wuhan Iron & Steel Co. advanced 1.3% in Shanghai. Posco gained 2.4% in Seoul, and Tata Steel climbed 4% in Mumbai trading.
Although Japanese technology shares rose in early trading in the wake of strong fiscal third-quarter earnings from Apple, worries about the yen's strength erased some of those gains. Elpida Memory tumbled 3.5%.
The yen's strength hurt other exporters. Nissan Motor Co. dropped 1%.
Nomura Holdings fell 3.8% and Daiwa Securities Group slid 3.5%, hurt by U.S. financial giant Goldman Sachs Group's weaker-than-estimated results. Investors were also concerned the two financial companies may need to raise capital.
LG Chem rose 4.4% in Seoul after the company reported record second-quarter earnings Tuesday that beat estimates, driven by strong sales of petrochemicals and rechargeable batteries.
Material stocks were generally higher around the region after the rebound on Wall Street and on an increase in crude-oil prices.
In Sydney, BHP Billiton advanced 1.2% after reporting a strong performance in its fourth quarter, with production of iron ore and metallurgical coal both up 16% on the year. Chinese oil company Cnooc climbed 2.4%, while Aluminum Corp. of China advanced 3.2% in Hong Kong.
In other market news, Cambodia said it would postpone the opening of its stock market to July next year due to technical issues and global economic uncertainty. This was the second delay for the new market; in December, officials said Cambodia's stock market would open by the end of this year after initially targeting it to begin operating in 2009.
Write to Colin Ng at colin.ng@dowjones.com
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