Asian Shares Unmoved By Europe, China News
First Published Tuesday, 10th July 2012 03:45 am - © 2012 Dow Jones
--Asian markets pare gains after China trade data
--Nikkei up 0.3%, Hang Seng Index flat, S&P ASX 200 gains 0.1%
--Sharp shares fall after company announces special loss
Asian shares were little moved Tuesday, paring earlier gains, as investors digested both a late-night agreement on an assistance package for Spanish banks and a wider China trade surplus.
The higher China surplus in June, at $31.7 billion, was primarily owing to weak import growth, an indication of domestic demand in Asia's biggest economy and a crucial support to the global economy.
Meanwhile, euro-zone finance ministers reached a "political agreement" early Tuesday morning on some details for a bailout to rescue Spanish banks, Jean-Claude Juncker, Luxembourg's prime minister and head of the Eurogroup, told reporters after the conclusion of the nine-hour meeting.
Spain also got a one-year extension to meet its deficit-reduction target, as had been widely expected.
Yields on Spain's 10-years bonds had earlier risen to around 7% overnight, the point widely considered to be unsustainable, which dulled sentiment in overnight trading.
The euro was stable early in Asia, at $1.2302, after gaining 0.2% overnight.
In Japan, the Nikkei climbed 0.3%, recovering some of its 1.4% fall Monday, thanks to increased hopes the Bank of Japan might take more steps to boost the economy at its next meeting, while a stable yen, at 79.52 to the dollar, took some pressure off exporters.
"The stock market still hopes that the Bank of Japan will increase its asset-buying program at its upcoming meeting," said Fujio Ando, senior analyst at Chibagin Asset Management.
The resource-heavy Australian benchmark was little moved, despite an overnight recovery in commodity prices--with industrial metals such as tin, nickel and aluminum all gaining around 1.5%. The resource-focused S&P ASX 200 advanced less than 0.1% as early gains made by large miners--such as Rio Tinto and BHP Billiton moderated--both gained 0.5%.
South Korea's Kospi gained 0.1%, Hong Kong's Hang Seng Index was flat and the China Shanghai Composite was less than 0.1% lower.
The price of oil sank to $85.14 a barrel on Tuesday. But investors were mostly interested in the 1.8% gain notched up overnight, which translated into gains for regional oil companies: Inpex Corp. in Japan rose 1.1% and Aurora Oil & Gas was 1.2% higher in Australia.
The upside was limited for one regional oil company, Sinopec, which only gained 0.3%, on news that China will cut retail gasoline and diesel fuel-prices for the third straight month.
In company news, electronics company Sharp fell 3.7% after an announcement that it will book a Y15.86 billion special loss in the first quarter ending June owing to damages paid settling a lawsuit with Dell.
Also in Japan, electronics company Nikon dropped 6.3% after Intel said it would invest as much as $4.1 billion in its Dutch rival ASML Holdings, which analysts say could weaken Nikon's standing in semiconductor exposure apparatus.
Write to Daniel Inman at Daniel.Inman@wsj.com