Asia markets mixed as India shares drop on worries over industrial production, inflation

Fri, Jul 11 05:45 PM

HONG KONG (AP) _ Asian markets were largely mixed Friday as Hong Kong stocks rose for a third day and Indian shares dropped sharply after a worrisome readings on the country's industrial production. In Japan, the benchmark Nikkei 225 index fell 0.2 percent to 13,039.69.

Mainland China stocks also fell as high oil prices prompted investors to take profit; markets in Australia, Taiwan and South Korea closed up. Wall Street's overnight rise helped some Asian markets, offsetting climbing crude oil prices.

On Friday, oil rose to a new trading record of US$145.98 a barrel in electronic trade on the New York Mercantile Exchange after another missile launch by Iran stoked worries that escalating political tensions in the Middle East could cut off supplies out of the region. In India, investors were rattled by domestic trends.

According to government figures, the country's industrial output grew at a slower rate than expected in May, dropping to 3.8 percent for the month from an expansion of 10.6 percent a year ago. On the Bombay Stock Exchange the benchmark Sensex index shed 3.3 percent to 13,469.85 points.

Indian markets have been volatile in recent weeks, with several sharp declines as investors worry over inflation soaring to 11.89 percent for the week ended June 28 and the stability of the federal government. Hong Kong stocks, meanwhile, advanced as investors bought beaten-down shares in a mobile phone maker and China's largest aluminum producer.

The blue-chip Hang Seng Index added 1.7 percent to close at 22,184.55. The market having suffered heavy losses in recent weeks and down almost 22 percent for the year was due for an upturn, analysts said.

Wall Street's higher finish overnight also helped. "I think the market was oversold, it was bound to have some technical recovery," said Ben Kwong Man Bun, the chief operating officer at KGI Securities.

"Sentiment is approving, confidence is picking up, but it all depends on the overseas markets." Handset manufacturer Foxconn International Holdings led the gains, soaring 10.1 percent.

Many investors thought shares in the company, Motorola's primary contract manufacturer, were attractively priced after taking a beating lately. Meanwhile, Aluminum Corp.

of China climbed amid reports that producers had agreed to an output cut that could put upward pressure on prices. The company, known as Chalco, was also upgraded by HSBC. Its shares jumped 6.2 percent.

Japanese shares ended slightly lower after a late rally erased early damage and left investors feeling positive about next week. "There was some selling as people settled positions before the weekend, but the strong recovery late shows upbeat buyers remain," said Hiroichi Nishi, a general manager at Nikko Cordial Securities.

Top Japanese automaker and major exporter Toyota Motor Corp. ended 1.8 percent lower.

Toyota said Thursday it would adjusts its U.S. manufacturing operations to meet customers' demands for smaller, more fuel-efficient vehicles. Japan mobile operator Softbank Corp.

fell 0.7 percent despite a heavy dose of publicity as it launched exclusive sales of the iPhone in Japan. In mainland China, the benchmark Shanghai Composite Index fell 0.65 percent to close at 2,856.63.

Gainers included telephone companies, while real estate developers fell. Large-cap stocks including oil and airlines were mixed.

China Mobile Ltd., the world's biggest phone company by subscribers, rose 1.56 percent, while the country's main fixed-line carrier, China Telecom Ltd.

, was up 2.1 percent. The country's biggest developer, China Vanke Ltd.

, fell 3.9 percent. China's share prices have been battered by concerns about record-high oil prices and a possible government interest rate hike to cool inflation.

Trade figures released Thursday showed Chinese export growth slowed sharply in June amid weaker global demand. In currency trading, the dollar traded at 107.16 yen midafternoon in Tokyo, up from 106.83 yen in New York late Wednesday.

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