Asia Markets: Japan stocks hit in volatile trade; China rises

By V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) ? Japanese shares beat a sharp retreat after opening comfortably higher on Friday, with a wave of selling ahead of weekend elections in the country also weighing on other regional markets.

The Nikkei Stock Average /quotes/zigman/5986735 JP:NIK -1.46% ?rose nearly 1% before suffering heavy losses that dragged the benchmark down to a loss of 2.7% within a matter of minutes, which traders attributed to selling in the futures market but not related to any particular news. The benchmark later moved off its lows but was still down 1% at the midday break.

Japan shares take a sudden tumble amid selling on the stock futures market.

?It?s just positioning. ... The market was long, and the Nikkei Stock Average has failed to break significantly higher despite the fact that the S&P 500 breached its May highs. ... [For traders], if you don?t like the move, you get out,? said Sunrise Brokers head of Asian equities Ben Collett.

Elsewhere in the region, Hong Kong?s Hang Seng Index /quotes/zigman/2622475 HK:HSI +0.16% ?was up 0.3%, Australia?s S&P/ASX 200 /quotes/zigman/1653884 AU:XJO -0.36% ?lost 0.5%, and South Korea?s Kospi /quotes/zigman/1652118 KR:SEU +0.03% ?was flat, with each changing direction in choppy trade.

On the upside, the Shanghai Composite /quotes/zigman/1859015 CN:SHCOMP +0.05% ?advanced 0.3%.

The volatility in Tokyo came ahead of the country?s upper house elections this weekend, in which the ruling Liberal Democratic Party is expected to easily clinch a majority.

The LDP already has a majority in the lower house of the parliament, and a majority in the upper chamber of the Diet was widely expected to strengthen Prime Minister Shinzo Abe?s government in its attempt to revive the Japanese economy.

However, ?it will not be plane sailing once the voting is out of the way. The politicians could be forgiven for putting off difficult decisions until after the elections, but hard choices will have to be made soon to maintain the markets? confidence,? Capital Economics wrote in a report.

Regional markets began the day on a positive note after the Dow Jones Industrial Average /quotes/zigman/627449 DJIA +0.50% ?and the Standard & Poor?s 500 Index /quotes/zigman/3870025 SPX +0.50% ?ended at record highs Thursday on Wall Street.

Those gains came after the second day of congressional testimony from Federal Reserve Chairman Bernanke and some upbeat earnings results, including from Morgan Stanley /quotes/zigman/182639/quotes/nls/ms MS +4.37% . Moody?s Investors Service also lifted its outlook on U.S. credit ratings to stable, while reaffirming the country?s AAA sovereign rating.

Stocks across sectors were affected by the volatility in Tokyo trading. Shares of Tokyo Electron Ltd. /quotes/zigman/198764 JP:8035 -5.41% ? /quotes/zigman/529232/quotes/nls/toely TOELY +0.87% slumped 5%, Tokyo Electric Power Co. /quotes/zigman/198657 JP:9501 -2.59% /quotes/zigman/527598/quotes/nls/tkecy TKECY +0.54% sank 4.6%, and Isuzu Motors Ltd. /quotes/zigman/193906 JP:7202 -2.22% /quotes/zigman/202869/quotes/nls/isuzy ISUZY +0.25% ?fell 2.5%, with each of them reversing early gains.

U.S. seen losing to China as world leader

People in the U.S. and China view each other with increasing suspicion, and many others around the world see the U.S. losing its place to China as the leading economic and political power. Photo: Getty Images.

Sharp Corp. /quotes/zigman/197304 JP:6753 +1.94% /quotes/zigman/197677/quotes/nls/shcay SHCAY +0.45% ?came off early highs but was still up 1.5% after the Nikkei newspaper reported it was considering raising funds via a private placement to Lixil Group Corp. /quotes/zigman/201354 JP:5938 +1.18% ?and Makita Corp. /quotes/zigman/200988 JP:6586 -2.20% .

Shares of Lixil added 1.3%, and Makita fell 1.4%.

Panasonic Corp. /quotes/zigman/194943 JP:6752 0.00% /quotes/zigman/15515696/quotes/nls/pcrfy PCRFY -0.31% ?rose 1.3% following reports the company and its unit Sanyo Co. will pay $56.5 million in fines in the U.S. for their involvement in a price-fixing case.

Hong Kong shares were supported as heavyweight stock HSBC Holdings PLC /quotes/zigman/13834 HK:5 +1.05% ? /quotes/zigman/207333/quotes/nls/hbc HBC +1.37% ?rose 1.1% after the higher finish on Wall Street. Chinese banks aided the market in Shanghai, with Agricultural Bank of China Ltd. /quotes/zigman/610785/quotes/nls/acgby ACGBY +0.30% ? /quotes/zigman/1440017 CN:601288 +0.79% ?rising 0.8%, and Bank of China Ltd. /quotes/zigman/1873420 CN:601988 +1.13% /quotes/zigman/529024/quotes/nls/bachy BACHY -0.20% ?gaining 1.1%.

However, shares of property developers retreated in Hong Kong, with China Overseas Land & Investment Ltd. /quotes/zigman/13931 HK:688 -2.36% ? /quotes/zigman/527919/quotes/nls/caovy CAOVY -1.36% losing 1.7%.

Santos Ltd. /quotes/zigman/181202 AU:STO -2.73% fell 3.5% after reporting a decline in production and cutting forecasts for oil and gas output.

/quotes/zigman/5986735

JP : Nikkei Idx

Volume: 0.00

July 19, 2013 2:08p

/quotes/zigman/2622475

HK : HangSeng Ind

Volume: 0.00

July 19, 2013 1:13p

/quotes/zigman/1653884

AU : Australia: Sydney

Volume: 0.00

July 19, 2013 3:08p

/quotes/zigman/1652118

KR : S. Korea: KRX

Volume: 260.23M

July 19, 2013 2:08p

/quotes/zigman/1859015

CN : China: Shanghai

Volume: 50.94M

July 19, 2013 1:13p

/quotes/zigman/627449

US : DJ-Index

Volume: 136.27M

July 18, 2013 4:34p

/quotes/zigman/3870025

US : S&P Base CME

Volume: 510.86M

July 18, 2013 4:34p

/quotes/zigman/182639/quotes/nls/ms

US : U.S.: NYSE

Volume: 36.01M

July 18, 2013 4:00p

Rev. per Employee

$612,310

/quotes/zigman/198764

JP : Japan: Tokyo

? 4,805.00

-275.00 -5.41%

Volume: 2.14M

July 19, 2013 2:07p

Market Cap

?896.73 billion

Rev. per Employee

?40.76M

/quotes/zigman/529232/quotes/nls/toely

US : U.S.: OTCBB

Volume: 29,181

July 18, 2013 3:59p

/quotes/zigman/198657

JP : Japan: Tokyo

Volume: 262.09M

July 19, 2013 2:08p

Market Cap

?1187.59 billion

Rev. per Employee

?122.57M

/quotes/zigman/527598/quotes/nls/tkecy

US : U.S.: OTCBB

Volume: 3,142

July 18, 2013 3:57p

/quotes/zigman/193906

JP : Japan: Tokyo

Volume: 13.63M

July 19, 2013 2:08p

Market Cap

?1382.93 billion

Rev. per Employee

?63.43M

/quotes/zigman/202869/quotes/nls/isuzy

US : U.S.: OTCBB

Volume: 100.00

July 18, 2013 9:41a

/quotes/zigman/197304

JP : Japan: Tokyo

Volume: 102.24M

July 19, 2013 2:07p

Market Cap

?527.69 billion

Rev. per Employee

?48.94M

/quotes/zigman/197677/quotes/nls/shcay

US : U.S.: OTCBB

Volume: 50,792

July 18, 2013 3:53p

/quotes/zigman/201354

JP : Japan: Tokyo

? 2,407.00

+28.00 +1.18%

Volume: 1.54M

July 19, 2013 2:08p

Market Cap

?737.24 billion

Rev. per Employee

?31.50M

/quotes/zigman/200988

JP : Japan: Tokyo

? 5,780.00

-130.00 -2.20%

Volume: 528,800

July 19, 2013 2:05p

Market Cap

?840.05 billion

Rev. per Employee

?24.42M

/quotes/zigman/194943

JP : Japan: Tokyo

Volume: 17.37M

July 19, 2013 2:08p

Market Cap

?2161.14 billion

Rev. per Employee

?24.86M

/quotes/zigman/15515696/quotes/nls/pcrfy

US : U.S.: OTCBB

Volume: 207,771

July 18, 2013 3:59p

Rev. per Employee

$300,086

/quotes/zigman/13834

HK : Hong Kong

Volume: 10.82M

July 19, 2013 1:12p

Market Cap

HK$1604.47 billion

Rev. per Employee

HK$2.50M

/quotes/zigman/207333/quotes/nls/hbc

US : U.S.: NYSE

Volume: 1.10M

July 18, 2013 4:06p

Market Cap

$206.82 billion

Rev. per Employee

$320,506

/quotes/zigman/610785/quotes/nls/acgby

US : U.S.: OTCBB

Volume: 6,274

July 18, 2013 3:47p

/quotes/zigman/1440017

CN : China: Shanghai

Volume: 38.45M

July 19, 2013 1:13p

Market Cap

?822.75 billion

/quotes/zigman/1873420

CN : China: Shanghai

Volume: 10.24M

July 19, 2013 1:13p

Market Cap

?733.65 billion

/quotes/zigman/529024/quotes/nls/bachy

US : U.S.: OTCBB

Volume: 1,965

July 18, 2013 3:25p

/quotes/zigman/13931

HK : Hong Kong

Volume: 11.40M

July 19, 2013 1:13p

Market Cap

HK$175.71 billion

Rev. per Employee

HK$3.45M

/quotes/zigman/527919/quotes/nls/caovy

US : U.S.: OTCBB

Volume: 154.00

July 18, 2013 1:05p

/quotes/zigman/181202

AU : Australia: Sydney

Volume: 3.08M

July 19, 2013 3:08p

Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau. Follow him on Twitter @MktwKumar.

Source: http://www.marketwatch.com/news/story.asp?guid=%7B8D9F12C8-F00A-11E2-922F-002128040CF6%7D&siteid=rss

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