Asian Shrs Dn On Wall Street, But Dainippon Sumitomo Gains

SINGAPORE -- Asian shares were lower on Thursday, taking their cue from U.S. stocks, which fell for a second-straight session. In Japan, Dainippon Sumitomo Pharma rose on hopes of a U.S. acquisition.

The Industrial Average slipped 0.3% while the Nasdaq and S&P 500 lost 0.1% and 0.3% respectively. The market was weighed by a weaker-than-expected result U.S. jobs report from Automatic Data Processing.

"The recent U.S. market moves indicate investors are feeling fatigued, showing only tepid reactions to positive data. With growing downside risks, local stocks are expected to track U.S. stocks and take a breather for a while," said Choi Seong-lak at SK Securities in Seoul.

Japan's Nikkei 225 was down 0.3% while South Korea's Kospi fell 0.2% and Australia's S&P/ASX 200 slipped 0.1%. New Zealand's NZX-50 climbed 0.3%. DJIA futures were 16 points lower in screen trade.

Dainippon Sumitomo Pharma was in focus in Tokyo. The stock surged 5.6% after the company said it was in talks for the acquisition of an unnamed U.S. firm. This came in the wake of a Nikkei report that Dainippon was interested in buying Sepracor (SEPR) for about $2.7 billion. If true, the move could pave the pay for the U.S. launch of Dainippon's schizophrenia drug, Lurasidone, which it plans to file with U.S. FDA in early 2010.

Japanese financial stocks were weighing on the overall market with Mitsubishi UFG down 2.2% while Mizuho FG slipped 1.4%.

Korean stocks pulled lower as investors continued to take profit in technology and auto stocks. "Sentiment is not that bad. But foreigners continue to take profits and the market lacks aggressive stock buyers amid lingering uncertainties in the U.S. and China markets," said Lee Kyoung-min at Woori Investment & Securities. Samsung Electronics was down 0.8% while Hyundai Motor fell 3.0%.

In Australia, gold shares were soaring with spot gold's rally on Wednesday. Newcrest Mining was up 6.2%, Lihir Gold up 6.8% and Sino Gold gained 8.5%.

New Zealand shares were led higher with Auckland Airport up 1.7% on news of a new passenger clearance systems for trans-Tasman flights. NZ Farming Systems Uraguay soared 13% as investors remained optimistic over news Wednesday that Singapore-based commodity trader Olam International bought a 14.4% stake in the company from its current shareholders.

Foreign exchange markets continued to trade in narrow ranges with the euro at Y131.30 from Y131.44 late New York on Wednesday and $1.4259 from $1.4265.

"Investor sentiment has appeared more tentative recently as recent price action in equities has stirred fears that the rally since March 2009 could falter. The risk/dollar relationship has held thus far but as recent equity performance has appeared a bit shaky, the dollar could stand to benefit should the latest risk rally unravel," said analysts at UBS. The U.S. dollar was at Y92.06 from Y92.13.

Japan government bonds were trading a tad higher on stronger U.S. Treasurys gains overnight with lead September futures up 0.03 point at 139.47 while the 10-year JGB yield was flat at 1.305%.

"The JGB market is very solid on the back of the weak equity market and the continued U.S. Treasury rally. Market participants see no reason to sell at current low yield levels. In the very short term, yields will go lower to test their lower bounds," said Deutsche Bank strategist Makoto Yamashita.

Spot gold was at $976.45 per troy ounce, down $2.15 from New York's close after it rallied to a three-month high on Wednesday.

"Historically, the time is ripe for a sustained advance, as recent bull trends have occurred in odd numbered years, with the breakouts occurring during September," said Barclays Capital. "With price action unfolding in terms very similar to 2005 and 2007, we look for higher gold over the next several quarters in both dollar and euro terms."

LME copper was at $6,170 per ton, down $3 from the London kerb. "To maintain copper prices above our forecast of $2.50 per pound ($5,510 per ton) for the next year we would need to see signs of a strong underlying Chinese economy as well as some pick up in OECD demand," said Citigroup.

October Nymex crude oil futures were up 28 cents at $68.33 per barrel on Globex, after settling flat in New York.