Asian Shares Mostly Lower As Techs Decline, But JAL Bounces

SINGAPORE -- Asian share markets were mostly lower Monday with technology stocks tracking drops in their U.S. counterparts on Friday. But Japan Airlines bounced after its sharp decline last week.

Japan's Nikkei 225 was down 0.8% with Australia's S&P/ASX 200 down 1.1% and South Korea's Kospi Composite off 1.0%. New Zealand's NZX-50 though was 0.4% higher.

Analysts said markets were showing some fatigue as earnings season continued to roll out, though selling was not heavy and more broadly there remained optimism about aglobal economic recovery.

"The market just looks a little tired," said RBS Head of Sydney Sales Justin Gallagher. "Wall Street seems to be taking the view the good news is priced in, so the consolidation everyone has been calling for looks like it's coming. But I'm still pretty comfortable with it."

"One of the main reasons for the weakening sentiment is that many investors lack confidence about earnings in the fourth quarter after the solid third-quarter," added Lee Jae-mahn at Tong Yang Securities in Seoul.

Technology shares were weaker as International Business Machines fell 5.0% in the U.S. on Friday after it indicated businesses were still reluctant to resume spending. Samsung Electronics was down 1.9% and Hynix off 1.3% in Seoul, with Sony down 1.3% and TDK off 1.1% in Tokyo.

But JAL gained 11.0% to Y112.00, even as doubts continued about its restructuring plan. The Nikkei reported in its Sunday edition that the three megabanks that had lent heavily to JAL had decided the Transport Ministry's rehabilitation plan was unacceptable, though the Sankei Shimbun said on the weekend the government was set to now bail the carrier out.

JAL shares dropped 11.0% on Friday, touching an all-time low of Y100.

Cyclical stocks were falling in Sydney, including banks, materials and energy shares, with ANZ off 2.4%, Woodside down 1.1% and Rio Tinto falling 1.2%.

In Korea, Ssangyong Motor shot up 15.0% after the company said Sunday it would reorganize its product portfolio, focusing on small and mid-size sport utility vehicles as part of a turnaround effort within the next three years.

New Zealand's market was helped by a 1.0% rise in Fletcher Building amid a better economic outlook for both Australia and New Zealand. Citigroup analyst Julian Bu lifted his 12-month share price target on the stock to NZ$8.60, from NZ$8.40.

The Japanese yen was bid higher in currency markets, as a safe-haven play as stocks slipped. The U.S. dollar was down at Y90.88, from an early-Asia high of Y91.13, with the euro at Y135.01, from Y135.91 earlier. The single currency was at $1.4846 against the U.S. dollar, from $1.4901 initially in Asian trade.

Still, further broad dollar weakness could be in store this week, said Bank of NZ strategist Mike Jones. "The trend recovery in global growth and risk appetite looks set to continue and sustained gains in U.S. interest rates remain some way off yet."

Lead December Japanese government bond futures were down 0.02 at 138.86 points before an auction of 20-year notes Tuesday.

Spot gold was down just 10 cents from New York's Friday levels, at $1,052.70 a troy ounce.

HSBC analyst James Steel said the gold market was concerned about a lack of jewelry demand from India. "While gold has largely taken its cue from dollar movements, high prices have undermined retail demand for bullion over the past 12 months. Based on our conversations with merchants in India, we believe physical demand for gold picked up only modestly ahead of the Deepavali festival, which is traditionally a time of gold gift-giving."

Nymex front-month crude oil futures were down 11 cents on Globex, at $78.42 a barrel, having risen to $79.05 earlier. "We still need more positive factors to test $80," said Koichi Murakami with Daiichi Shohin in Tokyo.