Asia Mixed; Samsung Weighs on Seoul

By V. PHANI KUMAR in Hong Kong and SHRI NAVARATNAM and JOHN PHILLIPS in Singapore

South Korean stocks ended lower Thursday after technology major Samsung Electronics Co. provided weak earnings guidance, while Japanese shares inched up as exporters drew more support from the yen's recent weakness against the U.S. dollar.

Many indexes hovered in a range around the previous day's closing session and trading volumes were light, signaling caution after recent advances in most regional markets.

The Nikkei Stock Average gained 0.1% to 9,590.93, off the day's high of 9,687.18 points. The Bank of Japan earlier in the day downgraded its broad economic assessment in the wake of the March 11 earthquake and tsunami, while keeping interest rates unchanged at 0.1%, as expected. The bank also said it would establish a special lending facility for financial firms in areas hit by the quake.

"We still don't expect the bank lending to be boosted by the BOJ's action, but think today's decision is a decisive measure to aid financial institutions in the disaster area," said Junko Nishioka, chief economist at RBS Securities Japan.

Among exporters, Mazda Motor Corp. rose 1.7% and Canon Inc. added 0.4%.

Sony Corp. rose 0.2% after saying it has resumed some operations at several plants, while Toyota Motor Corp. gained 0.9% on news of partial production restarts.

Meanwhile, Australia's S&P/ASX 200 slipped 0.1% to 4,908.10, China's Shanghai Composite index added 0.2% to 3,007.91, Taiwan's Taiex rose 0.6% to 8,901.72, New Zealand's NZX 50 ended little changed at 3,450.36 and the Philippines' main index rose 0.2% to 4,219.43.

In afternoon trade, India's Sensex rose 0.1% to 19,622.37, Singapore's Straits Times index inched up 0.1% to 3,171.90, the Indonesian stock index fell 0.5% to 3,709.26 and Thailand's SET rose 0.8% to 1,084.43.

Dow Jones Industrial Average futures were up seven points in screen trade.

The Kospi dropped 0.2% to 2,122.14 in Seoul, pressured by a 1.5% drop in Samsung shares after the company said its first-quarter operating profit probably fell 34.2% on-year to 2.9 trillion Korean won ($2.67 billion), raising worries about the demand outlook for consumer electronics. Samsung's earnings guidance is closely watched by the market as a gauge of overall demand for various technology products.

Shinhan Investment Corp. analyst Kim Jeong-yoon said that "since foreign holding in Samsung's stock is large, selling is pressuring the share and it seems like foreigners are perceiving the earnings results as rather tepid."

Australian shares ended lower after rising 10% over the past three weeks, with the rapid appreciation of the Australian dollar and oil prices offering short-term obstacles. The fall came even as data showed a month of strong employment gains in March, keeping the central bank on track to raise rates.

"The market feels like it has gone too far too fast," said IG Markets Strategist Ben Potter. "The Australian market has had only one down day since March 17, so it's hard to go long here."

BHP Billiton Ltd. fell 0.6% and Newcrest Mining Ltd. shed 0.5% among miners. Stock market operator ASX Ltd. dropped 0.8%, extending losses after Australian Treasurer Wayne Swan on Tuesday effectively rejected a proposed takeover bid by Singapore Exchange Ltd.

The Australian dollar hit a new post-float high of US$1.04877 after the data, and was more recently at US$1.04783.

The euro, meanwhile, took a breather against the U.S. dollar and the yen after posting big gains Wednesday. The ECB is widely expected to deliver a 0.25-percentage-point rate increase later Thursday. Expectations for the rate increase have managed to overshadow even the euro-zone debt crisis, with traders looking past Portugal's request Wednesday for a financial bailout from the European Union.

Still, euro bulls might need to be cautious, said Mike Jones, strategist at the Bank of New Zealand. "The focus for markets will be whether or not [ECB] President Jean-Claude Trichet chooses to endorse market pricing of four additional rate hikes over the coming 12 months. We'd suggest there is some risk of disappointment on this front," Mr. Jones said.

The single currency was fetching $1.4291 from $1.4331 late Wednesday in New York, and ¥121.86 from ¥122.48. The dollar was at ¥85.26, compared with ¥85.48.

Lead Japanese government bond futures were down 0.26 at 138.72 points, weighed by weakness in U.S. Treasurys Wednesday, while the yield on the cash 10-year JGB was up 1.5 basis point at 1.305%.

Spot gold slipped from its record high of $1,462.30 a troy ounce tapped on Wednesday, and was recently at $1,458.90, down 20 cents from its New York settlement.

May Nymex crude-oil futures were up 19 cents at $109.02 a barrel on Globex.

Write to V. Phani Kumar at phani.kumar@dowjones.com and Shri Navaratnam at shri.navaratnam@dowjones.com