Asian investors skittish over US inflation figures

Asian stocks continued to trade lower on Friday with anxious investors fretting over US inflation figures and the prospect of another round of interest rate hikes, dealers said.

They said weakness in the outlook for the IT industry had also weighed on sentiment with Wall Street's lackluster performance providing little direction for investors in the Asia-Pacific region.

Falls in most markets were modest, but in Shanghai textiles dragged the market down further after Washington and Beijing failed to reach an agreement on apparel exports.

Bangkok was weaker amid fears its central bank will raise interest rates next week while Tokyo was lower ahead of earnings reports.

In Taipei, share prices closed 0.15 percent higher in a slight technical rebound after recent losses but the key tech sector continued under pressure despite gains on NASDAQ overnight.

The market outlook remains worrisome as technology majors, including makers of semiconductors and LCD panels, remain under pressure even after recent heavy losses, Jih Sun Securities Investment deputy manager Wilson Lien said.

As such, the possibility of the benchmark index testing support towards its late-September low of about 5,894 points next week could not be ruled out, he added.

Taiwan Business Bank and Farmers Bank of China were substantially higher after President Chen Shui-bian (陳水扁) told his administration that government officials and heads of government-controlled companies will be held responsible if they fail to carry out financial reforms.

The weighted index closed up 8.96 points at 5,969.07 on turnover of NT$59.56 billion (US$1.78 billion).

In Tokyo, share prices closed 0.21 percent lower as the market turned cautious ahead of key US inflation data and company earnings news.

The market started the day on an upbeat note as position-squaring and bargain hunting fueled gains, said Hiroyuki Nakai, a strategist at Tokai Tokyo Research Center.

But the buying momentum soon lost steam as most investors preferred not to buy aggressively ahead of the release of US inflation data for last month and General Electric's quarterly earnings report, he added.

The Nikkei-225 index shed 28.70 points to 13,420.54 on turnover of 2.7 billion shares.

In Seoul, share prices closed 0.27 percent lower, extending losses as Samsung Electronics' solid third-quarter results and positive future guidance provided only limited support.

Dealers said investors initially responded positively to Samsung's earnings announcement but quickly stepped back amid continuing uncertainty over the US economic outlook and ahead of key US inflation figures due later on Friday.

The KOSPI index closed down 3.27 points at 1,190.17. Volume was 568 million shares worth 4.3 trillion won (US$4.1 billion).

Samsung Electronics was steady at 562,000 won after it reported a net profit of 1.88 trillion won on sales of 14.54 trillion won in the third quarter.

In Hong Kong, share prices closed 0.93 percent lower on sustained worries about likely further increases in US interest rates, which would push up local lending costs.

Dealers said investors were also cautious ahead of the release later on Friday of US economic data such as the CPI and consumer sentiment.

The market was also weighed down by expectations that China Construction Bank's initial public offering in Hong Kong, which was launched on Friday, will absorb a large amount of investor funds.

The Hang Seng Index closed down 135.95 points at 14,485.88. Turnover was HK$21.86 billion (US$2.8 billion).

In Shanghai, share prices closed 1.14 percent lower in a continued correction, with textile stocks struggling after China and the US failed to reach a deal on export limits in their latest talks.

Dealers said there was no fresh lead from the policy side while investors were reluctant to build positions aggressively ahead of the release of third-quarter results.

The Shanghai A-share Index shed 13.77 points to 1,197.30 on turnover of 7.69 billion yuan (US$948 million) while the Shenzhen A-share Index was down 3.41 points or 1.16 percent at 289.40 on turnover of 4.71 billion yuan.

The benchmark Shanghai Composite Index, which covers A and B-shares, closed down 13.06 points or 1.13 percent at 1,139.55 on turnover of 7.74 billion yuan.

In Sydney, share prices closed 0.56 percent lower as easing commodity prices pushed market heavyweight BHP Billiton down.

Dealers said the market was experiencing a correction after hedge fund activity and options-related trading pushed it to record highs late last month, with plenty of profit on hand to be taken.

CMC Markets senior dealer James Foulsham said investors were also concerned that the boom in commodity prices was slowing.

The S and P/ASX 200 index fell 24.9 points to 4,406.1. Turnover was 1.11 billion shares worth A$3.4 billion (US$2.5 billion).

In Singapore, prices closed 0.75 percent down on profit-taking in property and marine stocks.

The Straits Times index fell 17.46 points to 2,303.24. Volume totalled 974 million shares worth S$828 million (US$493 million).

In Bangkok, share prices closed 0.61 percent lower, pressured by more falls in Asian stock markets and concern over the country's inflation.

The composite index fell 4.30 points to 700.02. Turnover stood at 1.4 billion shares worth 9 billion baht (US$220 million) traded.