By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Most Asian markets retreated Tuesday
in choppy trade as investors pondered whether the U.S. Federal
Reserve will maintain its monthly bond purchases, with Hong Kong
stocks dragged lower by a drop in mainland Chinese property and
banking shares.
Australia's S&P/ASX 200 fell 0.9%, the Shanghai Composite
dropped 0.3%, Hong Kong's Hang Seng Index shed 0.7%, and Taiwan's
Taiex slipped 0.1%.
Japan's Nikkei Stock Average fell 0.7%, but South Korea's Kospi
was up 0.2%, with both changing direction multiple times during the
session.
The broad losses in Asia came despite a triple-digit point gain
for the Dow Jones Industrial Average (DJI) overnight.
Trading in the U.S. and other global markets has been volatile,
as investors remain focused on the Federal Open Market Committee
policy decision Wednesday, which investors are hoping will provide
clues on how long the Fed will maintain its $85-billion-a-month in
bond purchases.
"We expect this nervousness to continue to dominate until the
FOMC rate decision and Chairman [Ben] Bernanke's press conference
on Wednesday, with asset prices remaining vulnerable to news
headlines, keeping the volatility elevated," Barclays analysts
wrote to clients.
Property stocks fell sharply in Hong Kong but rose on mainland
Chinese bourses after official data showed home prices rose in a
vast majority of the Chinese cities surveyed in May. According to
Dow Jones Newswires calculations, the average home price rose 0.86%
from the level in April, and was 5.32% higher than in May 2012.
Shares of China Overseas Land & Investment Ltd. (CAOVY) fell
1.9%, and China Resources Land Ltd. (CRBJF) dropped 3% in Hong
Kong. However, Gemdale Corp. gained 1.5% in Shanghai, and the
yuan-denominated A-shares of China Vanke Co. added 0.5% in
Shenzhen.
"The fact that the monthly data doesn't show significant rises
should mean that we are unlikely to get new [property-sector] curbs
in the short term. But it also means that we are not likely to get
any [policy] easing," said Andrew Sullivan, director of sales
trading at Kim Eng Securities. He said the price trends represented
a slightly negative data point for the sector.
Shares of major Chinese banks rose on mainland bourses following
news that state-owned investment agency Central Huijin Investment
Co. has increased its stakes in the four largest state-owned
lenders.
In Shanghai, shares of Agricultural Bank of China Ltd., or ABC
(ACGBY), added 0.8% and China Construction Bank Corp. (CICHY)
climbed 0.7%.
However, the banks' Hong Kong-listed shares dropped to return
some recent gains, with CCB shedding 1.3%, and ABC slipping
0.3%.
In Japan, some real-estate, insurance and brokerage stocks
climbed alongside a few major exporters in the wake of the higher
finish on Wall Street, although some banks and telecommunication
stocks fell.
Mitsubishi Estate Co. (MITEY) rose 1.2%, Nomura Holdings Inc.
(NMR) climbed 2.3% and MS&AD Insurance Group Holdings Inc.
added 1%, finding buyers after suffering steep losses earlier in
the month.
Shares of Toyota Motor Corp. (TM) added 0.7% on reports the auto
giant has raised its Japan sales target, while steel maker JFE
Holdings Inc. (5411.TO) advanced 2.2% on news it plans to invest
$300 million to build an automotive steel sheet plan in
Indonesia.
Shares of Sharp Corp. (SHCAY) gained 0.5% after the Asahi
Shimbun reported the company was considering producing photocopiers
for Samsung Electronics Co. (SSNLF), with a fresh investment from
Samsung potentially part of the deal. Samsung shares rose 0.3% in
Seoul.
On the downside, shares of Mitsubishi UFJ Financial Group Inc.
(MTU) fell 1%, and KDDI Corp. (9433.TO) lost 1.8%.
In Sydney, banks and retailers found little support, even as
minutes from the Reserve Bank of Australia's last meeting showed
the central bank was ready to cut interest rates further, if need
be.
National Australia Bank Ltd. (NABZY) dropped 1.5% and
Commonwealth Bank of Australia shares (CBAUY) retreated 1%, while
Woolworths Ltd. (WOLWF) declined 1.3%.
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