Asia Closes Lower

Europe and Asia closed mostly lower on Friday, despite Wall Street's upbeat earnings and higher trading

European stock markets were mixed on Friday. In London, Financial Times-Stock Exchange 100 gained 2.50 points, or 0.05%, to close at 4803.30, barely changed from yesterday's levels despite Wall Street trading higher. Michigan consumer sentiment was weaker than forecast, but General Electric posted upbeat fourth-quarter results. Locally, December UK retail sales came in worse than expected, down 1.0% after a 0.6% rise in November, sending the pound lower. AstraZeneca remained weaker on news its drug Iressa could be banned in Japan. But S&P Equity Research fears no loss of Japanese revenues yet. LSE was still in play as both Euronext and Deutsche Boerse submitted broad outlines of their merger proposals today. Steelmaker Corus rose 2.4% following solid guidance from German peer ThyssenKrupp. Airlines received some media coverage as BA is considering buying the A380 superjumbo, while EasyJet is setting up another continental base in Basel.

Germany's DAX lost 6.73 points, or 0.16%, to close at 4213.70, following a typically quiet afternoon session despite a positive start to Wall Street as a good report from GE is set against weaker-than-expected Michigan consumer sentiment. The German session was dominated by the announcment by HVB that it is to take a 2.5 billion euro charge on its real-estate portfolio and will scrap plans to pay a dividend. The market generally took the news in its stride, however, with analysts saying that all the bad news is now out of the way, making it a much more attractive takeover candidate. Consequences of the HVB's skeleton clear-out were quickly felt by major stakeholders, including Munich Re, who lowered its 2004 earnings forecasts to 1.7 billion euro from a previous forecast 1.8 billion to 2.0 billion euro. Allianz also eased 1.0% on the news but declined to say whether it will be adversely affected. Deutsche Boerse slipped 1.02% after CEO Seifert was reported to be in London meeting top LSE executives over the terms of DB's bid. Bayer gained 2.4% ahead of its Lanxess chemical division's debut on the Xetra Dax at the end of this month. Schering ran into profit-taking.

In France, the CAC-40 gained 11.75 points, or 0.31%, to close at 3854.19. The CAC40 ended Friday's session fractionally higher, following in Wall Street footsteps. U.S. equities rose marginally in early trading as GE's better-than-expected earnings paced the market. However, the tone remained one of caution amid lower-than-forecast preliminary Michigan Sentiment. At home, the defensive nature of Suez proved to be attractive. The group will increase its 2004 dividend by 13% to 0.80 euro. On the downside, Vivendi Universal slipped 0.38% on the news it would tap debt markets for the second time since regaining its investment-grade rating last year.

Asian markets were lower on Friday. In Japan, the Nikkei 225 lost 46.40 points, or 0.41%, to close at 11,238.37. Japan shares edged lower in Friday trade, as investors cashed in profits ahead of the weekend market close. Sony led the market lower after the consumer electronic firm cut its profit estimate, down 3% to a six-week low of 3,830 yen. Panasonic-brand maker Matsushita Electric Industrial shed 1% to 1,514 yen while Sharp Corp slid 0.3% to 1,598 yen. Elsewhere, lens maker Hoya Corp fell 2% to 10,860 yen after the company issued lower-than-expected full year forecast.

In Hong Kong, the Hang Seng Index lost 62.57 points or 0.5% to close at 13,481, with total mainboard turnover of $15.9 billion (Hong Kong). Among 33 blue chips, 23 stocks dropped while six rose. PCCW declined 1.6% to $4.625 (Hong Kong) in resumed trading today after it announced on Thursday China Netcom Group will buy 20% of its enlarged issued share capital $1 billion in cash. S&P Asia-Pacific Equity Research has downgraded PCCW to 3 stars (Hold) from 4 stars (Buy) and cut its target price.

Canada's benchmark TSX/S&P lost 2.15 points, or 0.02%, to close at 9,086.83.

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