Investors stick to sidelines in subdued Asian trading

Asian stocks closed flat to lower on Friday in subdued trading amid a lack of leads from Wall Street and as oil prices ended a week-long lull and edged higher, dealers said.

The latest pressure on crude followed protests in Ecuador which forced its government to suspend oil exports, thus underscoring market nervousness over supply disruptions.

This was enough to keep investors largely in the sidelines during Asian equities trade and contributing to falls in Taipei, Singapore, Seoul, Mumbai, Kuala Lumpur and Manila.

Jakarta suffered a double blow with its currency falling against the US dollar to its lowest levels in more than three years. That coupled with widely tipped fuel price hikes has only increased pressure for an interest rate rise.

Only Bangkok bucked the trend and closed sharply higher with local institutions buying-up in the country's bluechips.

In Taipei share prices shed 0.74 percent amid concerns over high oil prices and a shrinking trade surplus with investor sentiment also dampened by a wrangle over the market's status.

Dealers said concerns that the Financial Supervisory Commission (FSC) would delay upgrading Taiwan to developed-market status originally scheduled for next month had impacted on trading.

The FSC said it has no timetable for widening the trading band for share prices to move up or down by 15 percent from the current 7 percent.

Although the government on Thursday raised its official economic growth forecast for this year to 3.65 percent from its previously 3.63 percent projection, investors continued to cast a wary eye on the weak trade surplus and high oil prices, the dealers said.

The TAIEX closed down 46.15 points at 6,158.94 on turnover of NT$63.42 billion (US$1.96 billion).

Tokyo share prices closed down 0.13 percent as investors locked in profits amid a lack of fresh incentives to push forward a market rally.

Dealers said the Japanese markets had rallied this week after upbeat assessments of the world's second largest economy by the government and the central bank, with the NIKKEI index hitting a four-year high on Tuesday.

"In the past days, investors are buying on the same theme, that is, on the positive outlook for the Japanese economy, but after the rise this week, the time to adjust [positions] has come," said Hideyuki Suzuki of SBI Securities.

"Basically, stocks are strong and this trend is likely to continue next week. But as the election nears, we will see more adjustments," added Suzuki, referring to the snap general elections on Sept. 11.

The NIKKEI-225 index shed 15.64 points to close at 12,291.73.

Seoul share prices closed 0.26 lower percent on Friday but off the day's lows on late bargain hunting with Hana Bank, Korea Exchange Bank and Kia Motors sharply higher while other large caps continued lower due to foreign investor selling.

"The market may fall further to 1,050 points amid high oil prices and the impending US FOMC [Federal Open Market Committee] meeting," Goodmorning Shinhan Securities analyst Kim Hak-Gyun said.

He added that investors were looking to prospects for the third quarter, especially for Samsung Electronics and other major IT companies.

The KOSPI index closed down 2.83 points at 1,089.88.

Hong Kong share prices closed 0.72 percent lower on extended profit-taking, with selling heaviest in the property sector, amid uncertainty over the market's direction in the near term. The Hang Seng Index closed down 109.48 points at 15,038.61.