Asian Shares Mixed, China Stocks Recover; Spain Weighs

27 Sep 2012

--Asian markets are mixed with mainland stocks recovering from earlier falls. --The Shanghai Composite rebounds from multi-year lows. --The Nikkei is flat, the Hang Seng Index adds 0.6%, and the S&P/ASX 200 is flat. (Adds information, updates/adds market levels) By Daniel Inman Asian markets were mixed on Thursday as weak regional sentiment, due to the reemergence of European concerns, was partly alleviated by a rebound in Chinese stocks. The Shanghai Composite Index was up 0.5%, pulling itself from the fresh multi-year low it hit on Wednesday, on expectations that the government could launch fresh measures to support the domestic stock market. In addition, concerns about excessive supply of stock were tempered following a report from the state-run China Securities Journal that majority shareholders in 32 companies listed on the growth enterprise board, the ChiNext, would not sell after the expiry of the forthcoming expiry of a three-year lock up period. In Hong Kong, the Hang Seng Index added 0.6%, with strong performance in Chinese energy stocks and some Chinese banks. Cnooc added 1.3% while Bank of China gained 1.0%. Spanish 10-year government bond yields crept above 6% overnight, reviving concerns over the European debt crisis, and ensuring that the risk-off sentiment seen in recent sessions remained firmly in place. Uncertainty over the health of the Spanish economy is mounting, adding pressure to the country to make a formal request for assistance from the European Central Bank. "Investors are getting nervous that the process has stalled. But things haven't fundamentally changed because at the back of all this you still have (Angela Merkel) and (Mario Draghi) pushing for the ECB to step in," said Joe Bracken, head of macro strategies at BT Investment Management in Sydney, which has 44.3 billion Australian dollars of assets under management. The euro stabilized in Asia on Thursday to $1.2878 after falling 0.2% Wednesday overnight. The dollar weakened against the yen, to Y77.67 compared to Y77.74 late Wednesday in New York, putting pressure on Japan's Nikkei Stock Average, which was flat. Toyota Motor was flat after earlier losses amid the ongoing territorial dispute between China and Japan; while social gaming companies Gree and DeNA dropped 11% and 10% respectively following a Nikkei report that NTT DoCoMo planned to launch social games on smartphones. NTT DoCoMo gained 0.6%. Aozora Bank sank 8.2% in Tokyo after a regulatory filing showed that major shareholder, Cerberus, is planning to sell a chunk of its holdings once the bank's recapitalization plan is given the go ahead. Australia's S&P/ASX 200 was flat, as miners were sold off: BHP Billiton lost 0.5%, and Fortescue Metals Group was 0.7% lower. South Korea's Kospi Composite was 0.2% higher. Oil recovered slightly on Thursday, to $90.35 a barrel, after