Asian stocks drift in marginal trading

Asian stocks drift in marginal trading

SINGAPORE (Reuters): Asian stocks drifted on Tuesday in generally light trading, with Tokyo dipping a touch while Hong Kong and Australia managed marginal rises.

Tokyo's benchmark Nikkei average of 225 shares fell 0.3 percent to 17,708.

In Southeast Asia, the rapidly deteriorating situation in East Timor, where Indonesian authorities declared martial law early on Tuesday, weighed on market sentiment.

Many investors in Tokyo also remained on the sidelines ahead of Thursday's gross domestic product data, which is being watched for signs of whether the recession-hit Japanese economy has really started a recovery trend.

Traders said sentiment remained bullish on the yen but the market was concerned about risks surrounding the GDP data, given that the Bank of Japan had intervened following the previous release in June.

The dollar rose to one-week highs above 111 yen in London, up nearly 1.5 percent from its Asian lows amid speculation that Japan's GDP report will be weaker than expected.

Hong Kong stocks ended barely moved and well off their highs after investors decided to lock in profits from the previous day. The Hang Seng Index closed up 0.08 percent at 13,396.

"Index futures have traded at a premium to the spot index which indicates there is real buying interest on hopes for good news about China entering the World Trade Organization," said Percy Au-Young, sales director at DBS Securities.

Australian stocks closed mixed as investors awaited the reopening of U.S. markets after the Labor Day holiday. The All Ordinaries index edged 0.1 percent up to 2,993.6.

Taiwan posted the biggest percentage loss. Brisk profit-taking on Taiwan technology stocks wiped out the market's early gains and dragged the index below 8,000 points despite a better than expected performance in Taiwan's August exports.

The TAIEX ended at 7,945.76, down 2.3 percent.

In Seoul, buying in some core blue chips pushed the Korea Composite Stock Price Index up 0.1 percent to 943.92. The Straits Times Index (STI) finished just 0.3 percent up at 2,105.42 after initial losses.

"It's not a very inspiring day. People tend to stay on the sidelines, waiting for a clearer picture on the development in East Timor," a Singapore broker said.

Jakarta stocks recovered form initial losses which were triggered by mounting concerns over possible international action against Indonesia for its failure to quell escalating violence in East Timor.

The key composite index rose 0.9 percent at 545.35, but the rupiah came under attack again and was quoted at 8,250/8,300 versus 8,050/8,100 late Monday.

Dealers said market concerns also remain on the lingering scandal surrounding PT Bank Bali Tbk

Trading in Malaysia was dull, with investors expressing some disappointment at Malaysia's weaker-than-expected industrial production data for July. The Kuala Lumpur Composite Index ended down 0.04 points at 752.74.

Thai stocks were slightly firmer despite some retail selling of banks and finance. The composite SET index closed up 0.6 percent at 426.75.