Asian Shares Mixed; Property Plays Drag China, HK Lower

Asian Shares Mixed; Property Plays Drag China, HK Lower SINGAPORE (Dow Jones)--Asian share markets were mixed Thursday as property developers dragged China and Hong Kong lower, while Qantas Airways advanced in Sydney on an upbeat earnings report.

Japan's Nikkei Stock Average was up 0.4%, Australia's S&P/ASX 200 was up 0.2%, South Korea's Kospi Composite lost 1.2%, Hong Kong's Hang Seng Index was flat and China's Shanghai Composite fell 0.4%.

Dow Jones Industrial Average futures were down one point in screen trade.

Wall Street's solid performance on Wednesday provided an early boost to regional sentiment, but many investors were treading cautiously amid the current earnings season.

In China, property developers weighed on the index after the Beijing municipal government placed fresh limits on home purchases on Wednesday.

One of the harshest measures is that first-time home buyers, who are not Beijing residents, have to prove they have made social security payments in the five years before their purchase.

Brokerage house Core Pacific-Yamaichi said the proportion of multiple home buyers and non-registered residents are high in Beijing; "we therefore expect the policy to have a significant downward pressure on home sales and later on home prices."

It advised investors to remain cautious on developers with high exposure in the Beijing market.

Beijing Vantone Real Estate was 2.0% lower and China Vanke was 2.3% lower, while Guangzhou R&F Properties lost 3.1% and Beijing Capital Land fell 0.8% in Hong Kong.

Bucking the market in Shanghai, Inner Mongolia Baotou Steel Rare-Earth rose 7.1% and Xiamen Tungsten rose 5.9%.

The gains came after China's Ministry of Commerce said it will further regulate rare earth exports and strongly combat the smuggling of rare earth minerals.

The latest development follows Wednesday's statement from China's State Council, the country's cabinet, that it will "streamline" the development of the rare earth industry over the next five years and implement more restrictions on mining the metals.

Shares in Sydney were supported by broadly positive earnings reports.

Qantas rose 4.6% after its first half results slightly topped expectations and as the national carrier said it expects full-year earnings to be "materially higher" than the previous year.

Santos rose 2.0% after its fiscal 2010 underlying profit beat consensus estimates, while Lend Lease added 1.9% after its first-half profit rose 10.5% on year.

BHP Billiton tacked on 0.3% as most brokers have retained their Buy recommendations after Wednesday's first-half results.

Banks were mixed with ANZ Bank off 0.6% but Commonwealth Bank of Australia up 0.1%. The sector was largely ignoring a decision on Wednesday by Moody's Investors Service to put them on negative review because of their dependence on global lending markets.

In Tokyo, technology plays and oil developers buoyed the market.

Strong crude oil prices on Wednesday led Inpex up 1.8% and Japan Petroleum Exploration 2.4% higher.

The yen's recent weakness against the dollar continued to aid technology exporters. Tokyo Electron advanced 0.4% and Sony added 2.0%.

Honda Motor advanced 2.3% after the Nikkei reported that the automaker will likely conduct additional share buybacks of up to Y40 billion in the current fiscal year ending March 31 to meet its goal of returning 30% of net profits to shareholders.

"Buying seems to be coming mostly from foreigners, while selling by Japanese life insurers and other institutions are keeping the upside capped," said Tachibana Securities operating officer Kenichi Hirano.

The Seoul market continued to mirror recent choppy trade, as it gave up early gains that were partially spurred by a strong earnings report from computer maker Dell.

Samsung Electronics rose 0.9%. Besides the Dell news, comments by Samsung that its television-making division will return to profit in the first quarter also underpinned the stock.

Shipbuilders and construction firms succumbed to profit-taking after their recent solid gains; Hyundai Heavy Industries fell 3.3% and Hyundai Engineering & Construction was off 0.6%.

"The market is still spooked by foreigners' heavy selling in recent weeks. Most investors have turned cautious as external uncertainties, including the situation in Egypt linger," said SK Securities analyst Won Jong-kyuck.

Among other markets, New Zealand's NZX-50 was 0.3% higher, Singapore's Straits Times Index fell 0.3%, Malaysia's KLCI rose 0.4%, Taiwan's Taiex was off 0.1%, Indonesian shares edged up 0.5% and Philippine shares gained 1.4%. India's Sensex was flat and Thailand's SET added 0.8%.

In foreign exchange markets, the U.S. dollar was shackled by tensions in the Middle East although an emerging picture of a more positive outlook for the U.S. economy tempered selling interest. On Wednesday, data on housing starts and producer prices underpinned the improving prospects, while minutes from the Federal Reserve's last meeting also provided a cautiously optimistic outlook.

Risk appetite took a brief hit on Wednesday after Israel said that Iran is sending two warships through the Suez Canal en route to Syria, and called the act a "provocation." The news, coming in the wake of recent protests that triggered the ouster from power of Egyptian President Hosni Mubarak, hurt the dollar as investors moved money to the safe-haven Swiss franc.

Trade in Asia was relatively subdued, but the euro spiked briefly on buying from Asian sovereign wealth funds, according to at least one trader in Tokyo.

Commenting on the safe-haven flows away from the dollar, FXOnline Japan market researcher Junichi Ishikawa, said: "I don't think the Swiss Franc buying is likely to become a market trend" over the coming sessions as Middle East tensions have already been factored in.