UPDATE: Asian Shares Mostly Down; US Earnings Eyed For Cues

SINGAPORE -- Asian share markets were mostly lower Friday with several markets reversing early gains as investors awaited fresh leads from major U.S. corporate earnings. United Minerals jumped in Sydney on a friendly takeover offer from BHP Billiton, though Japan Airlines Corp dropped on concerns about its recovery plan.

Japan's Nikkei 225 was flat with Australia's S&P/ASX 200 down 0.4% and South Korea's Kospi Composite lower by 0.3%. New Zealand's NZX-50 had gained 0.6%.

Hong Kong's Hang Seng was down 0.2% while China's Shanghai Composite was 0.5% lower and Taiwan's main index was down 0.1%. Dow Jones Industrial Average futures were just four points higher in screen trade.

Overall trade was subdued before the weekend and amid signs of some fatigue in the market. "The Australian market is up about 2.6% on the week, so it's prone to some profit-taking," said IG Markets institutional dealer Chris Weston.

Thai shares were outperforming the region, however, last up 1.5% at 702.71, rebounding after two days of heavy losses on rumors that King Bhumibol Adulyadej's health was deteriorating. But the index was already off its high of 707.95. "Given the uncertainty over the weekend, selling pressure should reemerge once the SET Index tests the resistance at 707," said KGI Securities strategist Rakpong Chaisuparakul.

Chinese shares were falling on concerns the imminent launch of the Growth Enterprise Market, a Nasdaq-style board, would divert cash from current stocks. "Speculative investors are cashing out to prepare for the launch of the secondary board in coming weeks," said Qian Qimin, an analyst at Shenyin Wanguo, also noting massive subscriptions to new share offerings hurt liquidity as nineteen firms built IPO books this week, raising a combined CNY7 billion.

Banks led the fall with ICBC down 1.2%, Bank of Communications 1.0% lower and Bank of China off 1.2%.

In Sydney, trading was range-bound and CityIndex institutional dealer Colin Barrett said the market was waiting to see if the Industrial Average can stay above 10000 after GE and Bank of America report results tonight.

Commonwealth Bank of Australia was down 0.7% while gold miners fell back further with Newcrest off 2.1%. But junior miner United Minerals raced 39% higher after an A$204 million takeover bid from BHP.

Oil-related shares were leading in Japan, with a slightly weaker yen helping exporter stocks like technology plays. Inpex was up 2.3% with Sony up 1.5% and Panasonic up 1.3%. Hong Kong oil plays were also benefitting with Cnooc up 1.7% and PetroChina 1.4% higher.

JAL shares dropped 10.5% in Tokyo, with hedge funds and others spotted selling as the financially-strapped airline continues its work to come up with a viable restructuring plan.

Debt-laden rural services company PGG Wrightson was a standout in New Zealand, gaining 18.5% after announcing a strategic partnership with China's Agria, under which Agria will become its new cornerstone investor. "The PGG Wrightson news is incredibly positive," said Peter Sigley, an institutional dealer at Goldman Sachs JBwere.

Korean shares were seesawing as gains in commodity-related stocks were offset by losses in techs, autos and steelmakers with the recent rapid rise in the Korean won also causing some concern for exporters. Posco was up 1.7% with SK Energy 3.0% higher, while Samsung Electronics was down 1.9% and Hyundai Motor shed 4.3%.

LG Display fell 4.8% after the flat-panel maker signaled a weaker profit in the current quarter.

Among other markets, Singapore's Straits Times index was down 0.3% while Malaysia's main index was 0.1% higher and Indonesian shares were down 0.4%. Philippines shares were down 0.5%.

In currency markets, the euro and Australian dollar remained well-bid against the U.S. dollar, with the Australian dollar rising to US$0.9262, its best level since early August 2008, partly due to media reports that Reserve Bank of Australia Governor Glenn Stevens said that the Australian dollar could hit US$1.10. The Australian dollar was recently at US$0.9236.

Goldman Sachs JBWere upgraded its forecasts and now expects the Australian dollar at US$0.95 in three months, from a previous call of US$0.87. "On virtually every...determinant, the Australian dollar looks set to move higher," it said.

The euro rose to $1.4935, from $1.4920 late in New York, and against the yen it was at Y135.50, from Y135.32, having briefly risen over Y136 for the first time in two months. The U.S. dollar was slightly higher against the yen, at Y90.73 from Y90.70.

Japanese government bond futures were falling with the front-month contract down 0.17 at 138.88 points, given weakness Thursday in U.S. Treasurys. The yield on the benchmark 10-year Japanese government bond rose 0.020 percentage point from Thursday's close to 1.330%.

Spot gold edged down five cents from New York levels to $1,050.65 a troy ounce. ScotiaMocatta said technical analysis suggests that its lower close yesterday leaves gold facing a deeper correction. "With (Thursday's) lower close the reversal is confirmed; we expect to see liquidation of long gold positions over the coming days with initial pull back target seen at former high $1,024."

Front-month Nymex crude oil futures were 45 cents higher at $78.03 a barrel on Globex, adding to a 3.2% gain in New York.

GA Global Markets broker Tony Rosado said oil was poised to break $79 before long, even as supply-demand fundamentals weren't helpful. "The funds have the ball in their court."