Asian Markets Closed Mixed

Shanghai, Sensex Closed Lower While Hang Seng Strengthen Gains

The stock markets across the Asian region closed mixed, as Wall Street provided a mixed lead after negative investor sentiment due to higher oil prices offset positive sentiment generated by better-than-expected reading on consumer confidence.

In late Asian trading, oil prices edged above the $117 a barrel mark, rising for the third straight day, on fears that Tropical Storm Gustav could strengthen to hurricane levels. Energy stocks gained on higher oil prices, but exporters fell as the dollar eased against major Asian currencies. By 4:53 a.m. ET, crude oil futures were up 77 cents at $117.04 a barrel after the contract finished $1.16 higher at $116.27 a barrel on Tuesday in U.S. trading.

On the currency front, the U.S, dollar eased to lower 109-yen levels in late Tokyo deals, from mid 109-yen levels in early trade and upper 109-yen levels late Tuesday.

The South Korean won strengthened against the greenback on suspected dollar selling by authorities to lift the local unit. The won finished at 1,084.1 a dollar, up from Tuesday's close of 1,089.4.

The Australian dollar closed higher after dropping to an eleven-month low during offshore trading. The Aussie finished the local session at US$0.8580-0.8582, up from Tuesday's close of US$0.8559-0.8563.

The New Zealand dollar rose after the release of business confidence data. The kiwi finished the session at US$0.7025, up from US$0.6976 in early trade and Tuesday's late quotes of US$0.6970.

Coming back in the equities the Japanese market closed lower, extending Tuesday's losses. Investors remained cautious ahead of a series of key economic data scheduled for release on Thursday and Friday in the U.S. and Japan. The market traded weak in the morning session, but recovered some ground in the afternoon session. The benchmark Nikkei 225 index closed down 0.2% at 12,752.96 and the broader Topix index slipped 0.5% to finish at 1,223.69.

On the economic front, traders had little economic data to digest on Wednesday. In the U.S., traders await durable goods orders and GDP numbers on Thursday and Friday respectively, while Japan will announce its July consumer price index, jobless rate, household spending and other data on Friday.

The Chinese market closed lower for a second day, as investors remained cautious amid concerns about government action to support the markets. The benchmark Shanghai Composite Index closed down 0.34% at 2,342.15 after falling to as low as 2,310.46. In Shenzhen, the All Share index plunged by 0.56% to 642.82.

The Hong Kong market closed sharply higher, extending gains in the afternoon as heavyweight China Mobile surged after reporting better-than-expected first-half earnings. The Hang Seng China Enterprises tracked Shanghai stocks zoomed up by 3.28% at 11,780.91 while the benchmark Hang Seng index closed up 1.94% at the day's high of 21,464.72.

The Australian stock market closed slightly higher after posting marginal losses on Tuesday. Energy stocks gained on higher oil prices, but financial stocks were weak on credit crunch concerns. The benchmark S&P/ASX 200 index closed up 0.07% at 5,011.2 after losing 0.2%. The broader All Ordinaries index lost 5.5 points or 0.11% to finish 5,087.8.

On the economic front, the Australian Bureau of Statistics said that the value of total construction work done in Australia fell 2.6% in volume terms in the second quarter of 2008. The total construction work done for the quarter was valued at A$30.137 billion, compared to an upwardly revised A$30.947 billion in the March quarter. On a seasonally adjusted basis, total value of building work done in the June quarter rose to A$16.797 billion from an upwardly revised A$16.756 billion in the March quarter.

The New Zealand market closed mixed after trading in positive territory in the morning session. The benchmark NZX 50 index closed down 0.07% at 3,318.52 after losing 0.2%, while the broader NZX All Capital Index rose 0.02% to finish at 3,359.58.

The National Bank of New Zealand's latest survey showed that business confidence in New Zealand improved in August, with a net 20.5% of those surveyed expecting worse times over the year ahead, an improvement from the net 43.2% expecting worse times in last month's survey. A net 4.7% expect conditions for their own business to improve in the coming year, while in the survey last month a net 8.2% expected conditions for their own business to worsen over the coming year.

The South Korean market finished marginally higher, as bargain hunting resumed after the key index posted losses in opening trade and yesterday. The benchmark Kospi closed up 0.25% to end at 1,493.92. The Kospi, which tumbled down to the 1,460 levels in the morning due the won's steep devaluation, rebounded on bargain hunting.

In India the market which was ranged throughout the day cracked in late trade spooked by reports that the Reserve Bank of India may hike cash reserve ratio tomorrow to arrest runaway inflation which is at 16-year high. Index heavyweight Reliance Industries (RIL) and bank stocks weighed on the indices.

Inflation as measure by wholesale price index is speculated to rise further to a fresh 16-year high in the week ended 16 August 2008. Global credit rating agency Moody's expects the Reserve Bank of India to further tighten monetary policy to contain rising prices

The BSE 30-share Sensex was down 181.03 points or 1.25% to 14,301.13, as per provisional closing. It opened 80.88 higher at 14,563.10, which is also its high so far in the day. Sensex hit a low of 14,261.69 in late trade. At the day’s low, the Sensex lost 220.53 points. The S&P CNX Nifty slipped 41 points or 0.95% to 4,296.45 as per provisional closing

Elsewhere, Taiwan's Taiex closed up 1.67% at 7,080.97; Singapore's Strait Times closed down 0.1% at 2,705.09; Malaysia's KLCI closed down 0.3% at 1,067.65; Indonesia's Jakarta Composite index closed up 1.12% at 2,131.06.

In the other part of the world, European shares weakened in early trading, as an up tick in oil prices pressured stocks sensitive to consumer spending such as automaker Daimler.

In the opening trade, the U.K. FTSE 100 index lost 0.2% to 5,459.60, the German DAX 30 index dropped 0.5% to 6,306.95 and the French CAC-40 index lost 0.6% to 4,341.57. At 10.37 GMT all this national indices continued to slump further. U.K. FTSE 100 index fell further at 0.3% to 5,454.40. The German DAX 30 index fell 1.21% to 6,263.73, while the French CAC-40 index decreased by 1.21% to 4,315.67.

Looking ahead the day is schedule to release Inflation data from Germany, which will be followed by durable good orders details from U.S. In the later evening we will see to the weekly crude oil stock from US.