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Market Update

Asian Shares Mostly Lower; China, Japan Buck Trend

Asian shares closed mostly lower Wednesday but with the Nikkei erasing early losses after the yen subsided against the dollar in noon trade and investors picked up bargains.

The Nikkei closed up 0.1% while the Shanghai Composite also ended 0.2% higher. The Hang Seng lost 0.9% and the S&P/ASX 200 gave up 0.7%. The Sensex slipped 0.5% at close.

Japan's Cabinet Office released better than expected numbers reflecting optimism about the country's consumer spending. Quarterly GDP numbers as also the yearly GDP Price Index figures are expected later this evening.

Stocks on the Move

Japanese bank stocks closed higher after JP Morgan raised its ratings on the country's major banks to "overweight" from "neutral." Mitsubishi UJF Financial Group was up 0.8%. Both Sumitomo Mitsui Financial Corp. and Mizuho Financial Group closed 0.8% higher.

Utilities lost ground after a media report that said all of the island nation's nuclear plants may remain idle for a while. Tokyo Electric Power was off 7.4% while Tohoku Electric and Chubu Electric Power Co lost 3.7% and 2.1% each, respectively.

Shares of Nintendo dropped 5% after the company disappointed investors with the new Wii U, the successor to its hit Wii video game console.

Financials and property stocks weighed on the Hang Seng with HSBC Holdings losing 1%, the heaviest drag on the index. The company said it has agreed to pay $62.5 million to investors in a fund it serviced that lost money.

ICBC closed down 2.5% and Agricultural bank of China lost 2.3%.

Wharf closed 1.4% lower after a media report that said the company may raise more funds to expand its China property portfolio. The company already raised HK$10.05 billion earlier this year and also issued a HK$6.22 billion convertible bond last month.

Foxconn International, the world's biggest contract electronics supplier, lost its blue-chip status after being dropped from the Hang Seng Index, a stock exchange official said. AIA, one of Asia's largest listed life insurers, and Hengan, a major Chinese producer of toilet tissue and nappies were added to the index.

The changes took effect Tuesday.

On the mainland, property stocks were helped by news China Vanke's sales rose 76% in May from a year ago. The stock closed up 3.7% on the Shanghai Composite index. Poly Real Estate also gained 3.6% and China Merchants Property Development ended 2.1% higher.

China Aluminum Corp. of China closed up after touching the daily 10% limit on news its parent company Aluminum Corp. of China has established a company from the consolidation of five rare-earth companies in Jiangsu Province.

Hero Honda, ONGC and Hindalco were the top losers on the Sensex, each closing 3.6%, 2.3% and 1.9% lower, respectively. HDFC, Bajaj Auto, Maruti Suzuki, Sterlite Industries, HDFC Bank, SBI and Reliance Industries ended between 0.9% and 1.6% lower.

Reliance Communications gained 2.5% after a media report that cited sources saying American tower firm Crown Castle has entered the race for acquiring Reliance Infratel, the Reliance's tower arm.

In Sydney, Australian Agricultural Company went into a trading halt as the government suspended all live-cattle exports to Indonesia for up to 6 months due to animal cruelty. Indonesia is a significant market for Australia as it buys around 60% of the country's cattle shipments.

Energy stocks also ended lower with Woodside Petroleum, Santos and Oil Search sliding 2.6%, 2% and 0.7% each, respectively.

Retailers Woolworths and Wesfarmers also dropped 0.5% and 0.8% each.

Financials were mixed with Westpac and ANZ adding 0.1% each while NAB and CBA lost 1.5% and 0.8% each, respectively.

Data from the Australian Bureau of Statistics showed home loans rose 4.8% as compared to an expectation of 2.4%. Employment data is due Thursday with the market expecting the unemployment rate to remain unchanged at 4.9% for the third straight month and for approximately 25,000 jobs to have been created in May.

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