Asian shares close mostly lower on commodity prices, Wall St

Asian shares close mostly lower on commodity prices, Wall St

	Published : Wed, 10 Jan 2007 09:00 By : Agencies Print this Story

HONG KONG (XFN-ASIA) - Shares across the Asia-Pacific region ended mostly down on nervousness over oil and metal prices and a lackluster session on Wall Street overnight, with some strong falls in regional markets, dealers said.

Tokyo shares closed sharply lower after the notion gripped the market that some foreign players were unwinding long positions to hedge against the risks of falls in the price of crude oil futures, dealers said.

The blue-chip Nikkei 225 Stock Average closed 295.37 points or 1.71 pct lower at 16,942.40, off a low of 16,847.57.

The broader TOPIX index of all first-section issues ended down 29.12 points or 1.72 pct at 1,663.00, off a low of 1,657.44.

A trader at a European financial institution said: 'Nikkei futures led the declines, with major selling pressure apparently coming from those offshore funds which reversed their short crude oil futures and long Japan-stock-futures positions.'

Investors were also discouraged by the poor performance of US stock futures on the 24-hour Globex trading system, dealers said.

'The drop in Nasdaq futures signalled that Wall Street may not react positively later today to Alcoa's earnings announcement, which came out after regular US trading hours yesterday,' the trader at the European firm said.

Australian shares closed lower as investors remained cautious over metal prices, which led to a significant reversal of yesterday's rally in the resources sector, dealers said.

They said the negative sentiment spread to defensive stocks such as the banks, while energy stocks fell on lower oil prices overnight.

The S&P/ASX 200 dropped 68.8 points or 1.23 pct to close at 5,520.9.

The broader All Ordinaries index retreated 62.0 points or 1.11 pct to close at 5,502.1.

Hong Kong shares were lower in afternoon trade on continued profit-taking in China stocks and property counters, dealers said.

They said investors were cautious due to a lack of strong leads and following lackluster trading on Wall Street overnight.

At 3.25 pm the Hang Seng Index was down 275.97 points or 1.39 pct at 19,622.11.

In mainland China, A-shares in Shanghai and Shenzhen closed higher on sustained fund inflows and a rising yuan with financial, property and metal stocks gaining ground, dealers said.

The Shanghai A-share Index added 18.39 points or 0.62 pct to 2,972.32 and the Shenzhen A-share Index was up 17.56 points or 2.85 pct at 632.61.

Seoul shares closed sharply lower, with the index retreating below 1,360 points, pressured by heavy program selling and foreign investor sell offs, dealers said.

Dealers said the mixed close on Wall Street also discouraged investors, who played it safe ahead of the expiry of options contracts and the Bank of Korea's rate decision tomorrow.

Declines were broad, with telecoms, insurers, steel makers and builders hit hardest.

The KOSPI index closed down 18.55 points or 1.35 pct at 1,355.79, a level not seen since Oct 31. The low for the day was 1,345.08 and the high was 1,372.52.