Asian Shares Mixed; Korea Tech Stocks Track US Peers Higher

SINGAPORE -- Asian stock markets were mixed Monday as investors remained cautious before a string of U.S. earnings reports this week. Korean technology stocks were higher, tracking gains for U.S. tech heavyweights on Friday.

"We need to see U.S. companies deliver on earnings this week and I think this week will set the tone for the rest of the year," said Patersons private client advisor Chris Blair in Sydney. He expected the market to consolidate as investors looked to the U.S., adding "people are buying the dips."

South Korea's Kospi Composite was down 0.4%, Australia's S&P/ASX 200 was flat while New Zealand's NZX-50 was up 0.3%. Japan markets were closed for Health-Sports day.

The Industrial Average futures contract was 16 points higher in screen trade, after the DJIA added 0.8% Friday.

Technology stocks were leading the gains in Korea as they tracked the positive showing for their U.S. peers. LG Electronics was 0.9% higher while Hynix Semiconductor rose 4.6% after IBM added 3.0% Friday, Intel climbed 1.5% and Advanced Micro Devices rose 6.7%.

"Strong gains in both U.S. and China stocks Friday were positive for sentiment," said Park Jung-seop at Daishin Securities. But he noted growing caution before the release of earnings from U.S financial firms and U.S. retail sales later in the week.

Steelmakers and refiners were dragging down the market on worries over their third quarter performance. SK Energy was down 6.8%, S-Oil lost 0.9% while Posco fell 1.0% and Hyundai Steel was 1.4% lower.

In Australia, banks were underperforming the market despite gains for their U.S. peers Friday. National Australia Bank was leading the sector lower with a 1.6% fall, after Credit Suisse labeled banks as expensive compared with industrial stocks. The resource and energy sectors were firm, with BHP Billiton up 0.5% and Woodside Petroleum up 1.2% despite mixed leads from commodity prices.

In New Zealand, shares were ticking higher in quiet trade; "There are no real leads or drivers to give the market any momentum," said Peter Young, adviser at Forsyth Barr. Fletcher Building was up 0.4% while heavyweight Telecom gained 1.6% and Contact Energy was up 1.2%.

In foreign exchange markets the dollar was slightly higher although the majors were trading in very tight ranges. Many investors were sidelined with Japanese markets closed and as many U.S. traders were expected to be away for Columbus Day later.

The U.S. dollar was at Y89.89 from Y89.83 in late New York trade on Friday, while the euro was at $1.4727 from $1.4734 and Y132.43 from Y132.34.

Spot gold was at $1,051.90 per troy ounce, up $2.00 from its New York close. After the yellow metal lost some ground on Friday, "long liquidation and profit-taking could extend precious metals' losses in the near term," said HSBC James Steel. Although he added that the bullion rally "still appears essentially intact."

The three-month London Metals Exchange futures contract was at $6,262 per ton, up $32 from Friday's London afternoon kerb, while LME aluminum was unchanged at $1,909 per ton.

Base metals prices were likely to pull back in near future, having priced in a "very rosy" demand outlook, said commodities economist Ben Westmore at National Australia Bank.

But near-term price direction is also likely to depend on news flow from LME Week, an annual gathering for players in the industry, which starts later Monday. "One of the main questions on people's minds will be the sustainability of China's recovery," said Westmore.