Asian stocks fell, reversing an earlier gain. Mitsubishi Estate Company paced declines in Japan on concern the Bank of Japan will raise borrowing costs next week. |
"The chances of the central bank raising interest rates are now believed by investors to be more than 50 per cent and if the bank does it, that's too early for Japan's economy,'' said Tsuyoshi Shimizu, who helps oversee $16 billion at Dai-Ichi Kangyo Asset Management Company in Tokyo. |
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Asian commodity stocks rose, led by BHP Billiton and Sumitomo Metal Mining Company after metals prices surged by the most in six months. Energy stocks including PetroChina slumped as oil traded below $53 for the first time since June 2005. |
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The Morgan Stanley Capital International Asia-Pacific Index fell 0.3 per cent to 136.49 as of 6:46 pm in Tokyo. Japan's Nikkei 225 Stock Average declined 0.6 per cent to 16,838.17 and the broader Topix index slid 0.4 per cent. |
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China's Shanghai and Shenzhen 300 Index dropped for the first time in seven days, after the value of stocks listed on the nation's exchanges yesterday exceeded $1 trillion for the first time. The country's foreign-currency B shares jumped the most in almost four months on speculation they will be merged with the more liquid, yuan-denominated A shares. |
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Benchmarks in Hong Kong, Indonesia, Malaysia, New Zealand, Pakistan and the Philippines also declined. Elsewhere, markets rose. |
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Mitsubishi Estate, Japan's largest property developer, slid 1.3 per cent to 3,040 yen. Mitsui Fudosan Company, the nation's second biggest, dropped 1.9 per cent to 2,800. |
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Contracts for the exchange of overnight rates suggest that traders see a 60 percent chance of a quarter-point increase at the BOJ's two-day policy meeting ending January 18, according to Credit Suisse Group. The figure rose from 46 per cent a month ago. |
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Higher rates may deter spending and investment, hurting the economy. Japan's leading index, which comprises measures such as machinery orders and consumer confidence, fell to 20 per cent in November from 54.5 per cent the previous month, the Cabinet Office said on Thursday. A number below 50 indicates growth will slow in three to six months. |
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An index of materials producers was the only gainer among 10 industry groups included in the MSCI. A gauge of energy producers, this year's worst performers, fell 0.3 per cent. |
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PetroChina, the country's largest oil company, lost 1.6 per cent to HK$9.79. Woodside Petroleum, Australia's No 2 oil company, slid 0.2 per cent to A$35.22. Cnooc, China's largest offshore oil company, fell 1.6 per cent to HK$6.64. |
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Crude oil dropped 2.9 per cent yesterday to $54.02 a barrel in New York, the lowest close since June 10, 2005. The benchmark futures contract on Thursday traded as low as $52.94. |
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China's Shanghai and Shenzhen 300 Index slid 1.1 per cent from a record, while the Shanghai B-Share Stock Price Index jumped 7.2 per cent. |
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Meanwhile, European stocks gained on takeover speculation in the tobacco, financial-services and chemical industries. |
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The Dow Jones Stoxx 600 Index rose 0.4 per cent to 365.34 at 12.50 pm in London. Benchmarks pared some of their advance after the Bank of England unexpectedly raised interest rates and then recovered after the European Central Bank kept its benchmark interest rate unchanged. |
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