Asian stocks turn mixed as oil price concerns offset early gains
Stock markets across Asia were mixed in late afternoon trade on Friday as oil prices jumped sharply overnight, raising concerns about inflation and growth in the U.S., a key market for Asian goods.
Benchmarks in Australia and Hong Kong held up as resource companies soared. But Japan gave up early gains sparked by reports that U.S. government officials were weighing a plan for the state to take over the nation’s two largest mortgage financiers, Fannie Mae and Freddie Mac.
The New York Times reported, quoting people briefed about the plan that Bush administration officials are considering a plan to have the government take over one or both of the mortgage finance companies and place them in a conservatorship if their problems worsen.
Under conservatorship, the shares of Fannie and Freddie would be worth little or nothing, and any losses on the mortgages they guarantee would be paid by taxpayers, the New York Times said in the report published late on Thursday.
High oil prices remained very much on investors’ radar screens, keeping equity gains in check.
World oil prices jumped sharply overnight on concerns about global crude supplies and tensions with Iran, and continued to move higher in Asian trading on Friday. New York’s main oil futures contract, light sweet crude for August delivery, rose 13 cents to $141.78 a barrel in the morning after jumping $5.60 to close at $141.65 Thursday on the New York Mercantile Exchange.
Just last week, the crude benchmark hit new record peaks near $147 amid speculation that oil could hit $200 a barrel. South Korea’s Kospi gained almost 2 percent to 1,567.51, while the Hang Seng index in Hong Kong advanced 1.3 percent to 22,111.65.
Tokyo’s Nikkei 225 index slipped 0.2 percent to 13,039.69, and the Topix index lost 0.4 percent at 1,285.91.
In Sydney, the S&P/ASX 200 rose 0.9 percent to 4,979.9 and the All Ordinaries added 0.9 percent to 5,067.8. “There’s some buying in the resources sector though investors remain reluctant to push prices too much higher — they’re still wondering whether the bottom has been reached though there is a bit of life,” said Michael Heffernan, an equities analyst with Austock Securities.
Index leader BHP Billiton was up nearly 4 percent at A$40.35 while its takeover target, Rio Tinto, added 3.6 percent to A$126.00.
National Australia Bank Ltd, which fell as much as 4 percent earlier in the session, closed down 0.6 percent at A$27.45. In Japan, banks clawed their way into positive territory on the New York Times report about Fannie Mae and Freddie Mac. Mizuho Financial Group gained 1.7 percent to 535,000 yen, Sumitomo Mitsui Financial rose 0.6 percent to 836,000 yen and Mitsubishi UFJ Financial was up 0.4 percent at 992 yen.
Banks also advanced in Korea with Kookmin Bank ending 2.1 percent higher at 59,000 won and Shinhan Financial rising 3.4 percent to 45,500 won.
Elsewhere in Asia, the Philippine composite index was down 0.5 percent at 2,437.99 while the Jakarta composite index had barely moved at 2,276.99.
The Taiwan weighted index gained 2.4 percent to 7,244.76. The Shanghai composite index lost 0.7 percent to 2,856.63.
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