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Asia stocks turn lower amid concerns over corporate earnings

Published 10/29/2012, 03:46 AM
Updated 10/29/2012, 03:46 AM
Investing.com - Asian stock markets turned lower during late Asian trade on Monday, as concerns over disappointing corporate earnings results from companies in the region continued to weigh on appetite for equities.

During late Asian trade, Hong Kong's Hang Seng Index fell 0.4%, Australia’s ASX/200 Index ended up 0.1%, while Japan’s Nikkei 225 Index closed little changed.

Asian markets opened higher, as investors reacted to stronger-than-forecast U.S. third quarter growth data released Friday.

The Commerce Department reported that the U.S. economy grew by a better-than-expected 2% in the three months to September, on the back of stronger consumer spending, after expanding by 1.3% in the preceding quarter.

But market sentiment remained vulnerable amid concerns over the outlook for global growth and its impact on corporate earnings.

In Tokyo, the Nikkei came off earlier highs after Honda cut its fiscal-year earnings outlook to JPY375 billion from a previous forecast ofJPY470 billion, citing lower-than-expected sales and a strong Japanese currency. Honda shares lost 4.65%.

The downbeat outlook weighed on other shares in the sector, with Toyota and Nissan slumping 1.6% and 2.2% respectively.  

Mobile phone operator NTT DoCoMo dropped 6% after it slashed its full-year operating profit forecast by almost 9% to JPY820 billion, citing tough market competition.

The index continued to draw support from growing expectations the Bank of Japan will introduce more monetary easing measures at its next policy meeting on October 30.

Elsewhere, in Hong Kong, shares in property developers came under heavy selling pressure following the introduction of a 15% tax on housing purchases by foreign and corporate buyers aimed at cooling soaring property prices.

Sino Land shares tumbled 6.6%, Henderson Land Development lost 6.75%, while Sun Hung Kai and New World Development retreated 5.4% and 6.6% respectively.

Looking ahead, the outlook for European stock markets was mixed, as investors continued to await any indication that Spain is moving closer to formally requesting a bailout from its euro zone partners and activating the European Central Bank’s bond purchasing plan.

The EURO STOXX 50 futures pointed to a gain of 0.15% at the open, France’s CAC 40 futures fell 0.75%, London’s FTSE 100 futures eased down 0.25%, while Germany's DAX futures pointed to a rise of 0.2% at the open.

Later in the day, Germany was to release official data on consumer inflation, while the U.S was to produce official data on household income and spending.

Trading activity was expected to remain thin on Monday, as a result of the first unscheduled, market-wide shut down since September 2001, as Hurricane Sandy approached the northeastern U.S.

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