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Market Update

Asia Down on Growth Concerns Before Jackson Hole

Asian markets were mostly lower Friday as downbeat industrial output data in Japan and South Korea dented investor confidence ahead of Fed Reserve Chairman Ben Bernanke’s speech in Jackson Hole later in the global trading day.

Japan’s Nikkei was down 1.1% at 11:45 a.m. Tokyo time. The Shanghai Composite was trading little changed while the Hang Seng lost 0.4%. The Sensex edged up 0.1% and the S&P/ASX All Ordinaries eased 0.2%.

Markets have been growing less hopeful of Bernanke announcing a fresh round of quantitative easing at the Jackson Hole annual symposium of central bankers and economists on Friday.

Investors preferred to sell off and stay on the sidelines ahead of this important event even as disappointing data from Asia added to global growth concerns.

Data released earlier today showed Japan's industrial output fell unexpectedly in July, raising concerns that weak global demand is hurting the country's export-dependent economy.

Meanwhile, industrial production in South Korea also declined for a second time in July with demand for exports dropping due to the European debt crisis.

Stocks on the move

In Tokyo, Sharp Corp. tumbled more than 11% after chairman of Taiwanese Hon Hai Precision cancelled a press conference and returned to Taiwan, stoking concerns about the company’s investments plan to purchase a 9.9% stake in Sharp Corp.

Other exporters were also sharply lower with chipmakers Sumco Corp. and Advantest Corp. retreating nearly 3% each.

Steel players were also in focus after reports said Japanese steel mills suffered due to increased competition from cheap Chinese steel.

Sumitomo Metal Industries plunged 5.1% and Nippon Steel also dropped 5% after the two companies, which are expected to merge in October, widened their net loss forecast for the six months ending September 30.

The news weighed on other players in the segment as well – Kobe Steel lost 3.2% while JFE Holdings erased 3.6%.

On the other side of the spectrum, some retail players gained ground after reports said consumer spending in July was stronger-than-expected.

J Front Retailing added 0.5% while Fast Retailing edged up 0.1%.

Also going against the tide were some power players and pharma companies. Tokyo Electric Power gained 0.8% and Kyushu Electric Power inched up 0.5% as investors stashed more of the defensives.

Among pharma firms, Towa Pharmaceuticals rose 1.8% following a ratings upgrade from J.P. Morgan. Takeda Pharmaceuticals climbed 0.8%.

In Hong Kong, oil players slipped tracking the slide in crude oil prices overnight. China Petroleum & Chemical Corp. dropped 1.2% and CNOOC gave up 0.4%. PetroChina retreated 0.7%.

Among other resources, metal players were trading mixed. Jiangxi Copper and Zijin Mining Group added over 1% but Angang Steel and Aluminum Corp. of China erased 2.5% and 0.6% respectively.

On the earnings front, ICBC posted a 13% rise in first half profit. Shares of the bank were up 1% while Bank of Communications rose 1.4% after posting an 18% jump in first-half profits.

China Eastern Airlines, which also reported earnings, dropped 1.7% after its first-half profits declined. But others in the sector gained – Air China rose 1.3% and Cathay Pacific Airways edged up 0.2%.

Also supporting on the upside were some property players. Poly Real Estate Group jumped 2% while Sun Hung Kai Properties climbed 0.9% after posting sharp losses in the previous session.

Stocks in Mumbai tracked the global markets down with investors turning cautious ahead of the June quarter GDP numbers on Friday. Analysts believe the economic growth figures are likely to come in disappointing.

Almost all sectors were trading in the red except some defensives like pharma and telecom shares. On the gainers’ side, Cipla topped the list with a 2.4% gain while Bharti Airtel tacked on a percent.

But dragging the index were metal players, auto stocks, banks and IT firms. Coal India dropped 2.4% ahead of its crucial board meeting today to finalize supply agreements.

Among metal players, Hindalco Industries lost 2%, Tata Steel retreated 0.9% and Sterlite Industries edged down 0.2%.

Some defensives were in demand in Sydney too. Drug maker CSL Ltd climbed 0.5% while Sigma Pharmaceuticals added 0.3%.

Besides, all major banks were back in the green with Westpac and NAB adding around 0.5% each.

But miners languished. BHP Billiton shed 0.4% even as close rival Rio Tinto added 1.3%. Fortescue Metals Group lost 0.6% and gold miner Newcrest Mining tumbled over 3%.