Asian Shares Mostly A Little Lower; BHP Drags In Sydney

SINGAPORE -- Asian shares were mostly a little lower Wednesday, with BHP Billiton falling in Sydney despite a solid first quarter production update.

Japan's Nikkei 225 was down 0.3% with South Korea's Kospi Composite flat and Australia's S&P/ASX 200 off 0.4%. New Zealand's NZX-50 had fallen 0.8%.

"We have seen broad-based falls in line with Wall Street, but it's been fairly muted," said Macquarie Private Wealth private client adviser Marcus Droga, who expected subdued trade before a slew of major Chinese economic data on Thursday.

Hamilton Hindin Greene adviser Adrian Vance in New Zealand looked for selling to be low-key. "After a few good days it's always healthy for markets to take a breather."

There was some supportive news after-hours in the U.S., with Yahoo jumping 5.1% as its third quarter earnings more than tripled despite a double-digit revenue decline, while SanDisk added 9.7% as it swung to a third-quarter profit.

But some analysts warned markets were becoming complacent. "It's like 2008 and early 2009 never happened. The VIX index is back where it was on September 3, 2008, when most economists didn't even know we were knee deep in recession, strategists believed we were only in for a mild correction and the Fed still thought it was fighting a liquidity battle as opposed to a credit contraction," said Gluskin Sheff Chief Economist David A. Rosenberg.

BHP Billiton shares were leading the Australian market lower, falling 1.4% despite the miner saying its first quarter iron ore production rose 1% on year to a record 30.1 million metric tons. Analysts said the result was slightly below market hopes for a big jump in output.

Uranium miner Paladin Energy though gained 5.4% - after rising 8.8% on the Toronto Stock Exchange - as BHP said its Olympic Dam copper-uranium-gold mine in South Australia would produce at only 25% capacity for up to six months, accounting for losses of up to 1,500 metric tons of uranium and over 70,000 tons of copper.

There was some selling into Japanese technology stocks, with Tokyo Electron off 1.7%, but gains in turn in cyclical shares, with industrial equipment maker Komatsu up 0.4%, rising for its fifth-straight day.

Shares in Korea were supported by continued foreign buying, though tech stocks were lower with Samsung Electronics off 0.5%. LG Electronics slipped 0.8% before its third quarter report later in the day.

Automotive shares gained in Seoul with Hyundai Motor up 2.2% and Kia Motors up 0.9%. "People are now saying their (third quarter) earnings may come out very strong," said Bae Sung-young at Hyundai Securities, with the duo set to report this week.

Large-cap stocks were pulling back in New Zealand, with Fletcher Building down 1.2%, Contact Energy off 1.6% and Telecom down 1.2%.

The euro was mixed in currency trade with a lack of strong leads from stock markets. It was at $1.4922 against the U.S. dollar, from $1.4929 late in New York, but up against the yen at Y135.49, from Y135.40, with the greenback at Y90.79, from Y90.61.

The New Zealand dollar popped up against the U.S. dollar, to around US$0.7510, after Reserve Bank of New Zealand Governor Alan Bollard was reported by local radio as saying the high value of the currency was not necessarily an impediment to raising interest rates to cap house prices.

Japanese government bond futures were 0.12 higher at 138.74 points, after a rise in U.S. Treasurys Tuesday, though concerns remained about the potential for a pickup in the issuance of Japanese debt, to fund a tax revenue shortfall.

LME three-month copper was $4 higher from the kerb at $6,420 a metric ton, supported by BHP's news on its Olympic Dam mine.

Spot gold slipped $1.70 from New York, to $1,053 a troy ounce, hindered by the euro's failure to break through the key $1.50 level. "As before, it's all about the U.S. dollar. When the dollar rose overnight, it proved gold is almost completely driven by the dollar's moves," said Darren Heathcote, head of trading at Investec.

Front-month Nymex crude oil futures were down 45 cents from New York, at $78.67 a barrel on Globex. Still, Citi Futures Perspectives analyst Tim Evans said the market was largely focused on "how high can it go" rather than "high stocks, weak demand, rising supply and a supply/demand surplus."