Asian Shares Mostly Drop, Hong Kong Advances

Japanese shares fell on Thursday, under-performing the rest of the Asian region, while Hong Kong and Australian stocks stage a mild advance.

The Nikkei Stock Average (JP:100000018) -0.82% declined 0.9%, Korea’s Kospi (KR:0100) -0.23% traded down 0.4%, and the Shanghai Composite Index (CN:000001) -0.09% edged lower by 0.1%.

On the plus side, Hong Kong’s Hang Seng Index (HK:HIS) +0.75% and Australia’s S&P/ASX 200 index (AU:XJO) +0.32% each advanced by 0.4%.

According to Market Watch, the European shares had fallen Wednesday after news of a rise in bad loans in Spain. U.S. shares closed lower as well, after earnings reports dented sentiment toward some technology firms.

Later in the global trading day the major focus for markets will likely be Spanish and French debt auctions, according to Sue Trinh, strategist at RBC Capital Markets.

“Given the poor results from the last Spanish auction, market anticipation will certainly be running high in the approach to this issuance, especially given the recent performance of Tier-2 spreads,” Trinh said.

Europe-focused exporters losing ground included apparel firm Esprit Holdings Ltd.(HK:330) -1.43% ESHDF -2.76% , down 3% in Hong Kong, and Honda Motor Co. (JP:7267) -0.92% HMC +0.68% , down 1% in Tokyo.

Japanese-listed commodity firms also declined, after oil prices fell below $103 a barrel in New York on Wednesday following data that showed oil supplies rose by more than expected for a fourth week.

JX Holdings Inc. (JP:5020) -0.83% JXHGF 0.00% lost 0.8%, while shares of Inpex Corp. (JP:1605) -0.76% IPXHY -0.19% fell 1%

But commodity-linked firms advanced in Hong Kong, with Cnooc Ltd.(HK:883) +1.62% CEO +1.32% up 0.8%, China Petroleum & Chemical Corp. HK:386 +1.58% SNP -0.52% ahead by 1.2%, and PetroChina Co. (HK:857) +1.42% PTR +1.17% rising 0.5%

Energy firms also advanced in Australia, boosted by production reports. Woodside Petroleum Ltd. (AU:WPL) +1.42% WOPEF -0.53% rose 1.8%, and Santos Ltd. (AU:STO) +0.29% STOSF -2.52% climbed 0.6%, after reporting sharp revenue gains of 20% and 50%, respectively. (Read more on reports from Woodside and Santos .)

“I think that the [Australian] market is showing a continuation of improvement from [Wednesday]. A lot of that has been brought about by confidence attached to the quarterly results from both Rio Tinto and BHP Billiton,” said Jamie Spiteri at Shaw Stockbroking.

Both firms reported production figures earlier this week. On Thursday, BHP Billiton Ltd.(AU:BHP) +1.14% BHP +1.42% climbed 1.3%, while Rio Tinto Ltd. (AU:RIO) +0.15% RIO +1.32% rose 0.2%.

“It’s not as if they surprised the market to the upside, but more a case that they didn’t shock the market with any disappointing news. So there’s a bit of relief in that sense,” he said.

In South Korean trading, techs were mostly weaker, tracking U.S. losses for the sector, with LG Electronics Inc. LGEIY 0.00% falling 2.6%, though heavyweight Samsung Electronics Co. SSNLF +25.39% managed a 0.5% rise.

In the Japanese technology sector, Hitachi Ltd. (JP:6501) +2.52% HIT +0.67% gained 2.1% after the Nikkei reported that the company would be helping Russia improve its electric grid.

Nippon Sheet Glass Co. (JP:5202) -6.90% NPSGF +18.93% dropped 6% after its chief executive officer resigned on strategy grounds, according to reports.

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