-- Asian stocks may mostly open lower on Tuesday, following downturns in U.S. stocks, but are expected to show volatility as jittery investors contemplate whether it's the time to stop worrying about credit-related woes.
"People are afraid of troubles in credit markets. If the U.S. markets go down, people think that's a cue to take money out," said Shigeki Makino, chief investment officer of Putnam Global Equity Fund, which has about $750 million investment in Asia.
"But there are really not many reasons for them to do this as fundamentals are not bad." September futures for the Nikkei 225 Index (JP:1804610: news, chart, profile) recently traded at 16,730 on the Chicago Mercantile Exchange, down from Monday's close of 16,780 on the Osaka Stock Exchange and 16,750 on the Singapore Exchange, indicating a weak start for their underlying index on Tuesday.
New Zealand's NZX 50 index was slightly up in Tuesday's early-morning trading.
U.S. subprime loan-related losses are fairly minimal and won't have much impact on Japanese banks, said UBS analyst Shoji Hirakawa in a research note Monday.
"Any direct loss to be incurred by Japanese financial institutions, which mainly invest in highly-rated securities, appears to be even more limited," said Hirakawa.
"We do not believe that the selling of Japanese stocks by funds to avoid risk will last long," he added.
U.S. erased earlier gains
On Wall Street, stocks trimmed an earlier advance on Monday as investors weighed news that a Goldman Sachs hedge fund suffered a 27% loss of its value year-to-day. Goldman also said the firm and others are making a $3 billion investment in the fund.
The New York Federal Reserve injected $2 billion in liquidity into the market on Monday. The European Central Bank provided around 47.5 billion euros ($65 billion) in loans, while the Bank of Japan added more than $5 billion.
Bank of Communications Co. (HK:3328: news, chart, profile) , China's fifth-largest bank by assets, will join Hong Kong's benchmark Hang Seng Index from Sept. 10, the index compiler HSI Services Ltd. said in a statement.
Shares of Bank of Communications, which is 18.6%-owned by HSBC Holdings PLC, aren't likely to rise sharply Tuesday, because its inclusion had been widely expected, Dow Jones Newswires said, citing traders.
HSI Services said Bank of Communications will have a weighting of 3.01%, bigger than that of Bank of China Ltd. (HK:3988: news, chart, profile) . The number of constituents in the HSI will rise to 40 from 39 following the addition.
In Australia, the country's largest carrier Qantas Airways Ltd. (AU:QAN: news, chart, profile) said it has prepared $40 million to cover potential fines relating to its role in fixing air cargo surcharges, Financial Times reported. The news came after British Airways and Korean Air were each fined $300 million by the US Department of Justice, the newspaper said.
Monday's markets
The Dow Jones Asia/Pacific Index closed slightly up at 154.90. Japan's Nikkei 225 Index (JP:1804610: news, chart, profile) end up 0.2% at 16,800.05. Hong Kong's Hang Seng Index was down 0.4%, and Australia's S&P/ASX 200 gained 1.3% at 6,011.60
Crude-oil for September delivery ended up 15 cents at $71.62 a barrel in New York on Tuesday, and gold futures dropped 70 cents to close at $680.90 an ounce.
The dollar was last quoted at 118.2 yen. See Currencies End of Story
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