Oil Drops, Followed By Asian Markets:
HONG KONG - Stocks across the Asia/Pacific region gained no impetus from a generally favorable session on Wall Street overnight after oil prices eased; Japan, South Korea and Australia all experienced major index losses exceeding 1% in magnitude. Only China managed to make gains, prompted by a report from the official Xinhua news agency that Beijing will shortly introduce stock index futures.

In the United States Tuesday, markets overlooked a discouraging report on home prices to post respectable increases, encouraged by crude oil's decline below $130 a barrel. (See: "Street Survives Housing, Consumer Data") The Dow Jones industrial average rose 0.6%, or 69 points, to finish at 12,548.

Australian markets suffered as declining oil prices made investors bearish on its critical resource sector. The S&P/ASX 200 lost 1.16% ending at 5,648.10. Shares in Woodside Petroleum (other-otc: WOPEY - news - people ) were down 3.0%, to 63.00 Australian dollars ($60.58); Santos (nasdaq: STOSY - news - people ) diminished by 1.4%, to 18.98 Australian dollars ($18.25); BHP Billiton (nyse: BBL - news - people ), which also has some involvement in oil production, sagged by 3.4%, to 45.10 Australian dollars ($43.37). Although signs of slowing have appeared in the Australian economy, the construction sector continues to post strong gains, according to TradeTheNews. Meanwhile, Qantas (other-otc: QUBSF - news - people ) announced that it will cut capacity on its domestic routes by around 5%, as it hunts for ways to cope with sky-high jet fuel prices. Qantas shares took off, by 4.9%, to 3.45 Australian dollars ($3.30).

The Nikkei 225 average experienced a reversal of momentum, after early Wall St.-driven gains, ending the day 1.3% lower, at 13,709.44; the Topix lost 1.4%, to 1,348.69. Oil-related stocks declined: trading house Mitsubishi Corp. (other-otc: MSBHY - news - people ) tumbled 3.5%, to 3,620 yen ($34.82), while Nippon Oil (other-otc: NPOIF - news - people ) shed 4.6%, to 752 yen ($7.23). Oki Electric Industry shares gained 3.8%, to 218 yen ($2.10), after a report said it would dispose of a 95% stake in its chip-making arm to Osaka-based Rohm Co. (other-otc: ROHCF - news - people ) for about 100 billion yen ($962.0 million). Rohm stock declined by 1.5%, to 6,510 yen ($62.63).

The Hang Seng index continued a slide that was interrupted by Tuesday's advance, dipping 0.1%, to 24,249.51. Particular weakness was exhibited in shares of CNOOC (nyse: CEO - news - people ), down 5.1%, at 14.20 Hong Kong dollars ($1.82), and China Mobile (nyse: CHL - news - people ), down 1.6%, to 112.90 Hong Kong dollars ($14.47).

The Shanghai Composite index, as often is the case, went its own way, moving up 2.48% at its close, to 3,459.03, as CITIC Securities (up 6.2%, to 34.31 yuan [$4.94]) and other financial shares moved up strongly on anticipation that they could soon be dealing in index futures.

South Korea's KOSPI index retreated by 1.1%, to 1,805.64. General Electric (nyse: GE - news - people ) CEO Jeff Immelt, on a visit to Seoul, named LG Electronics (other-otc: LGEAF - news - people ) and Haier Group, as well as companies in Mexico and Turkey, as possible bidders for the appliance unit the American conglomerate is seeking to sell. LG Electronics shares fell 3.6%, to 134,000 won ($129.83), in Seoul.

Elsewhere, Taiwan's Taiex weighted index sank by 1.3%, to 8,665.73; Singapore's Straits Times index edged up 0.6%, to 3,132.78; the Bombay Stock Exchange's Sensex index advanced by 1.5%, to 16,525.37.

-- Thomson Financial and Reuters contributed to this article. Back To News

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