SINGAPORE (Thomson Financial) - Asian stock markets were mixed Thursday with Japan gaining as investors sought bargains following recent declines, while Australia fell for a sixth straight day after a futures contract expiry boosted volume but failed to revive enthusiasm for shares.
The South Korean market was flat a day after conservative candidate Lee Myung-Bak won the presidential election by a landslide and pledged to promote more investment-friendly policies for businesses and foreign investors.
Hong Kong and the Philippines were also little changed, while Singapore, Malaysia and Indonesia were closed for a public holiday.
"It will be listless trading today, given lingering concerns about the US economy," said Astro del Castillo, managing director of First Grade Holdings in Manila. "We're not seeing aggressive plays by traders, but there will be bouts of bargain-hunting as traders will be drawn to a number of oversold issues."
The Nikkei ended the morning up 0.7 percent at 15,139 ahead of a Bank of Japan decision on interest rates. The BoJ is widely expected to leave rates on hold as it continues to evaluate the economic and financial market outlook in the wake of the subprime meltdown and credit crunch.
The Topix was up 0.7 percent at 1,466.89.
The S&P/ASX 200 was down 0.4 percent at 6,195 and the All Ordinaries dipped 0.4 percent to 6,258, falling for a sixth straight session. Trading was choppy as more than 8 billion Australian dollars worth of shares were pushed through following the expiry of the S&P/ASX 200 December futures contract.
With two more trading days left before Christmas, investors have written off the chances of a festive rally.
"You can forget about that. Back in November one was probably tipping that it might happen because December traditionally has been a strong period of trading, but it hasn't happened," said Andrew Sekely, head of Australian equities at Intersuisse.
"There are quite a few negative elements out there and one really has to look hard to find anything positive. I think unless we get some good news it will drift towards Christmas."
The Kospi was up 0.2 percent at 1,865, the Thai Set was up 0.1 percent at 805 and the Shanghai Composite was up 1.4 percent at 5,011.
China moves on Morgan
The Dow Jones Industrial Average closed a volatile session down 25 points, or 0.2 percent, at 13,207 overnight as investors wrestled with a troubling outlook for bond insurers, a 9.4 billion US dollar writedown at Morgan Stanley and concerns that the economy is headed for recession.
Standard & Poor's lowered its outlook for bond insurers Ambac and MBIA, suggesting the companies may lose their triple-A ratings.
Morgan Stanley unveiled new writedowns as it reported a 5.8 billion dollar fourth-quarter loss, hit by the continued slump in the value of mortgage-related assets. Chief executive John Mack described the bank's performance as "embarrassing", and conceded it was the result of an error of judgement and poor risk management.
Morgan Stanley also announced a 5 billion dollar investment by Chinese sovereign fund China Investment Corp, news that helped send its shares higher. Morgan Stanley is the latest major financial institution to attract a sizeable investment from a fund controlled by a foreign government. An Abu Dhabi fund recently invested 7.5 billion dollars in Citigroup and Singapore's Temasek injected 11.5 billion dollars into UBS.
"CIC's investment in Morgan Stanley will provide psychological support to the market," said Alex Tam, research analyst at CSC Securities HK Ltd in Hong Kong. "Now, we are seeing that there are sovereign funds out there who are interested in these distressed financial institutions."
The Federal Reserve said Wednesday that US banks borrowed 20 billion dollars for 28 days at 4.65 percent in an auction held on Monday, with 93 banks bidding for a total of 61.6 billion. The rate is just 10 basis points below what the Fed normally charges banks borrowing at its discount window.
"The economic interpretation of the results is unclear," said Scott Brown, economist at Raymond James. "Either demand was strong because of more severe credit stress or the TAF is functioning well."
Centro gains
Among individual stocks, bargain-hunters continued to pick through the ruins of the Australian property sector following the announcement by Centro Properties Group earlier this week that it has a 3.9 billion Australian dollar financing shortfall.
Centro was up 7 cents or 5.8 percent at 1.27 dollars and Stockland Group was 9 cents or 1.0 percent higher at 8.85 dollars.
General insurer Suncorp Metway was down 26 cents or 1.5 percent at 16.85 dollars after warning that claims for damage caused by storms in Australia and New Zealand will have a material impact on its earnings for the fiscal first half to December.
China COSCO Holdings rallied 1.40 Hong Kong dollars or 6.3 percent to 23.60. The operator of Asia's largest container line has raised its net profit estimate for 2007 by 50 percent to 18.2 billion yuan on better-than-forecast revenue from its international shipping operations.
In Manila, Ayala Corp, the second-biggest company in the Philippines by market value, advanced 5 pesos or 1.0 percent to 500 pesos after it said it bought back 75,000 shares at between 495 pesos and 497.50 pesos on Wednesday.
In Japan, banks were firmer with Mitsubishi UFJ Financial Group up 3.3 percent at 1,065, Sumitomo Mitsui Financial Group gaining 4.1 percent to 86,3000 and Mizuho Financial Group adding 2.8 percent to 544,000.
The Nikkei newspaper reported that they have turned down requests to join in a rescue fund to be created by Citigroup and other US banks to deal with the credit crisis.
JGC was up 34 yen or 1.8 percent at 1,954 after the Nikkei said the engineering company has won a 200 billion yen order to construct an ethylene plant in Saudi Arabia.
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