Asia wakes up confuse about Dow Jones

HONG KONG -- Asian stocks were volatile Tuesday, with Japan finishing mixed and China at a record, as concerns that the region could be affected by problems related to global credit markets remained despite a strong overnight recovery on Wall Street.

Japanese stocks ended mixed as banks such as Mizuho Financial Group gave up early gains, but Australian shares climbed on bargain-hunting in financial issues such as Macquarie Bank after recent losses.

In Tokyo, the Nikkei 225 index (JP:1804610: news, chart, profile) ended up 0.04% at 16,921.77. The index had opened higher and touched an intraday high of 17,049.45. The broader Topix index (JP:1804609: news, chart, profile) lost 0.5% at 1,660.16.

Masanaga Kono, strategist at SG Asset Management in Tokyo, said problems related to the U.S. subprime-mortgage market are a "very big concern" for investors in Japan.
"The weakness in banking stocks is related to subprime loans, as the situation is shaky for the global financial sector," said Kono. "Japanese banks' exposure" to the U.S. subprime-mortgage market "seems quite limited. But nobody knows the true picture. So [investors] are being afraid of the shadow."

MTU, , ) ended little changed from its previous close, although both stocks rose smartly in the morning trading session. Mitsubishi UFJ's stock lost 8.7% and Mizuho's tumbled 17% in August prior to Tuesday's trading session, following weak April-June earnings reports.

In China, the Shanghai Composite rose 0.5% at 4,651.23, after closing at a record high on Monday. The index set an intraday record at 4,687.44 earlier on Tuesday.
In Hong Kong, the Hang Seng Index (HK:1804580: news, chart, profile) also turned volatile after opening higher. It ended 0.1% lower at 21,907.99, after swinging between 21,833.14 and 22,177.80 during the session. The 41-issue China Enterprises index fell 1.1% to 12,132.64.

India's Sensex (XX:1803532: news, chart, profile) gained 0.9% at 15,035.62 and Singapore's Straits Times Index (XX:1815656: news, chart, profile) was little changed at 3,309.97 in late afternoon trading.

Elsewhere, Australia's S&P/ASX 200 ended 1.1% up at 5,985, New Zealand's NZX 50 index climbed 1.5% to 4,136.24, South Korea's Kospi (XX:1807211: news, chart, profile) advanced 0.3% to 1,859.82 and Taiwan's Weighted index (XX:1805301: news, chart, profile) closed 0.9% down at 8,862.31, retreating from an intraday high of 9,068.83.

"The market is pretty weak. Trading volumes have shrunk and investors are hesitant to get in," said Raymond Chen, a sales trader at KGI Securities in Taipei. "A lot of investors bought shares at high levels, and they aren't keen on selling out. But they don't want to get in and increase their exposure either."

The Taiwanese market is likely to "consolidate" at current levels for a few days before rising further, Chen added.

In Hong Kong, shares of Chinese insurance firms were lower as investors booked profits after sharp gains over the past several weeks, with China Life Insurance (HK:2628: news, chart, profile) losing 2.6% and Ping An Insurance Co. (HK:2318: news, chart, profile) dropping 0.5%.

Shares of shipping firm China Cosco (HK:1919: news, chart, profile) fell 4.4% after UBS cut its rating to reduce from neutral.

Shares of urban railway operator MTR Corp. (HK:66: news, chart, profile) ended 0.4% down, before it reported a 21% drop in its first-half net income, while those of dry bulk shipping company Pacific Basin Shipping (HK:2343: news, chart, profile) closed 0.4% lower, before it announced a four-fold increase in its first-half profit.

In Tokyo, shares of some exporters ended higher on Wall Street's bounce back, with Sony Corp. (JP:6758: news, chart, profile)

In Sydney, Macquarie (AU:MBL: news, chart, profile) climbed 6.1%, recovering most of its losses from Monday, when it ended 6.6% lower. The stock had lost 15% in August until Monday, after it warned investors about likely losses in its Fortress Investment's high-yield fund on volatility related to U.S. credit markets.

Banking shares also gained, with shares of National Australia Bank (AU:NAB: news, chart, profile) rising 2.7% and Australia and New Zealand Bank Group (AU:ANZ: news, chart, profile) advancing 0.6%.

Shares of AXA Asia Pacific Holdings (AU:AXA: news, chart, profile) jumped 5.8% after the asset manager and life insurer reported a better-than-expected 23% jump in first-half profit, and increased the size of a share buyback.