Asian scrips head south

GLOBAL MARKETS

Asian stocks fell for a second day. Tokyo Electric Power Co led Japanese power companies lower on concern their debt costs will increase after the Bank of Japan raised its benchmark interest rate target.

"Any interest-rate increase raises costs for companies such as power producers that have a lot of debt on their balance sheets,'' said Masaru Hamasaki, a senior analyst at Toyota Asset Management Co in Tokyo. "It will be bad for their stocks.''

The Morgan Stanley Capital International Asia-Pacific Index lost 0.2 per cent to 146.56 as of 7:02 pm in Tokyo. Japan's Nikkei 225 Stock Average declined 0.1 per cent while the broader Topix index jumped 0.3 per cent to its highest since November 1991.

Benchmarks fell in Australia, New Zealand, South Korea and India. Singapore's Straits Times Index rose to a record. Markets were closed in China and Taiwan for the Lunar New Year holiday.

Tokyo Electric, Asia's biggest generator, lost 2.2 per cent to 4,100 yen. Kansai Electric Power Co, Japan's second-largest power producer, slipped 1.7 per cent to 3,500 yen.

The Bank of Japan raised its benchmark interest rate to 0.5 per cent after the world's second-biggest economy expanded at the fastest pace in three years.

US

US stock and index futures were little changed before a report on consumer prices that could bear out the Federal Reserve's projection that inflation is easing. Standard & Poor's 500 Index futures expiring in March slipped 0.1 to 1461.7 as of 9:36 am in London. Dow Jones Industrial Average futures lost 5 to 12,791. Nasdaq-100 Index futures were unchanged at 1838.75.

Higher-than-forecast earnings at Wal-Mart Stores and a drop in oil prices pushed the Dow to a fourth consecutive record yesterday and helped send the S&P 500 to a six-year high. The Labor Department will probably say today that growth in consumer prices cooled last month.

Europe

European stocks pared earlier gains. Anglo American, the world's second-biggest mining company, fell as Dutch bank ABN Amro Holding rose. The Dow Jones Stoxx 600 Index was little changed at 380.86 as of 10:05 am in London. The Stoxx 50 dropped 0.2 per cent and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, climbed 0.3 per cent.

Anglo American slumped 1.4 per cent to 2565 pence. Profit rose 76 per cent to a record, led by platinum and the industrial metals needed by China. Still, earnings before one-time items missed analysts' estimates.

ABN Amro jumped 4.2 per cent to 27 euros. The biggest Dutch bank is "significantly'' undervalued and should be broken up, according to TCI Fund Management, a UK hedge fund that two years ago led the ouster of Deutsche Boerse's top executives.

European stocks were upgraded by strategists at JP Morgan Chase & Co on expectations that US economic growth will pick up without stoking inflation.

The third-biggest US bank raised its stance on the region's shares to "neutral'' from "underweight'', JP Morgan strategists, including Mislav Matejka, wrote in a research note dated yesterday.

"We see potential for equities to overshoot our targets over the next few months,'' the strategists said in the report.