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Market Update

Asian Markets Pare Losses; End Mixed

Asian markets recouped early losses amid choppy trade and closed mixed Thursday after key economic data pointing to higher-than-expected inflation in China and a wider drop in core machinery orders in Japan dampened sentiment.

At close, the Nikkei was down 0.1%. The Shanghai Composite was up 0.1% while the Hang Seng ended flat. The Sensex added 0.9%. The ASP/ASX All Ordinaries was down 0.2%.

Markets had drifted lower in early trade after data suggested China’s consumer prices in January rose at a faster-than-expected 4.5%, trouncing expectations of easing monetary policy. In Japan, core machinery orders for December declined 7.1% against an estimated 5%, which further weighed on sentiment.

Stocks on the move

In Tokyo, shares of China-linked industrial firms were hit by the inflation data. Komatsu erased 0.7%. Hitachi Construction Machinery was down 1.4%, while Kawasaki Heavy Industries gave up 1.4%.

Carmakers also edged lower. Nissan Motor was down 1% on profit booking; the company had reported a 3.2% rise in third-quarter net profit yesterday.

Honda Motors shed nearly 0.6% and Toyota Motors slipped 0.2%.

On the plus side, Nippon Paper Group soared 6% after the company posted improved earnings yesterday. Mitsubishi Paper Mills, too, jumped nearly 11% on better prospects. 

On the earnings front, Daikin Industries lost 2.1% after the country’s largest manufacturer of air-conditioners revised its annual net profit outlook downwards by 21.7% to 36 billion yen.

In Shanghai, property firms extended gains after China’s central bank yesterday pledged support for first-time home purchasers.

The broader Shenzhen-listed shares of China Vanke soared 7.5%, while Poly Real Estate Group climbed 1.3%

In Hong Kong, China Resources Land was up 5.6% and Evergrande Real Estate gained 7.4%.

Shares of banks were affected by Chinese inflation data. Hong Kong listed shares of Bank of Communications were down 2.5% while Agricultural Bank of China shed 0.8%.

ICBC also lost 0.7% while Citic Securities gained up to 1%.

Refiners showed some momentum with Sinopec Shanghai Petrochemical Co. adding 2.2%. CNOOC was up 1.8%% while PetroChina erased 0.7%.

In Mumbai, stocks recovered losses towards the day-end taking positive cues from European markets.

Among gainers, Sterlite Industries was up 4% while Jindal Steel, Bajaj Auto and HDFC Bank gained around 3%-4%.

Technology players, Wipro, Infosys and TCS added around 1%-2%.

Oil and gas producer, Cairn gained almost 2% based on increased output of 133,000 barrels per day at its Rajasthan block.

Hindalco retreated 1.2% after the company posted a slight decline in net profit.

In Sydney, resources shares were hit, China being the country’s biggest export market.  

BHP Billiton ended lower 1.7% while Fortescue Metals shed 0.7%. Rio Tinto gave up 0.2% ahead of its full-year results due after the bell.

Index heavyweight, Telstra dropped 2% after Australia’s largest telco reported a less-than-expected 22.9% increase in its half-year net profit.

More on earnings, News Corp added around 1.6% after the media giant reported  65% increase in second-quarter profit.

Tabcorp Holdings was up 1.8% after the wagering and gaming firm lifted its first half underlying profit by 14.1%.

In financials, Bank of Queensland added almost 1% after it said it would hold its standard variable mortgage rates unchanged.

Westpac and Macquaire Group both added around 1% each.