Asia stocks mixed as markets eye Spain bond sale; Nikkei dips 0.8%

Investing.com - Asian stock markets were mixed on Thursday, as market participants awaited a key Spanish government debt auction later in the day amid concerns the country will be the next euro zone member to seek an international bailout.

During late Asian trade, Hong Kong's Hang Seng Index eased up 0.3%, Australia’s ASX/200 Index added 0.3%, while Japan’s Nikkei 225 Index slumped 0.8%.

Spain was due to auction up to EUR2.5 billion of two and ten-year government bonds later in the day, as concerns mounted that Madrid will not be able to meet deficit reduction targets in the face of a looming recession.

Earlier the week, its 10-year government bond yield spiked above the crucial 6%-mark, raising fears the country will seek an international bailout.

Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.

Shares in Hong Kong inched higher, hitting a three-week high on the back of strong gains in insurers.

China Life saw shares climb 3.2%, while Ping An added 2.2% after Deutsche Bank said that while new business growth is likely to remain challenging for Chinese insurers, these concerns are already factored into their share prices.

Shares of Chinese Internet firm Tencent Holdings added 0.6% to hit a fresh record high as retail investors continued to snap up the stock.

On the downside, Europe-focused retailer Esprit Holdings dropped 3.15% amid fears that the euro zone’s debt crisis was flaring up again.

Elsewhere, in Japan, the Nikkei underperformed the region after official data showed that the country posted a record trade deficit of JPY4.41 trillion in the year ended March 31.

Shares in Nippon Sheet Glass tumbled 6.9% to the lowest level since 1976 after the company announced that its president and chief executive had quit less than two years in the post following "fundamental disagreements" with the board over strategy.  

On the upside, a weaker yen helped some exporters, with Toyota shares 0.9% and Hitachi shares gaining 2.5% after JP Morgan upgraded its price target on the stock.   

Market participants were looking forward to the Bank of Japan’s policy meeting next week after BoJ Governor Masaaki Shirakawa stressed his commitment to powerful monetary easing.

The Nikkei rallied more than 19% in the first three months of the year, buoyed in large part by an unexpected easing announcement by the Bank of Japan in February, but the index has fallen nearly 6% since the start of April.

Most traders expect the correction to continue until the end of the month, when the BoJ meets for its April policy meeting, amid expectations the central bank will implement new easing measures.

Meanwhile, in Australia, gains in raw material producers helped lift the index to the highest level since late-October.

Energy firm Woodside Petroleum climbed 1.4% after it said quarterly sales revenues were up 20% from a year earlier.

Iron ore producer Fortescue Metals rose 1.5% after it stuck with near- and longer-term production guidance, despite a 16% drop in iron ore shipments in the March quarter.

Looking ahead, European stock markets were set to open higher, as markets awaited the results of a critical Spanish bond auction later in the day.

The EURO STOXX 50 futures pointed to a gain of 0.25%, France’s CAC 40 futures added 0.25%, London’s FTSE 100 futures rose 0.5%, while Germany's DAX futures pointed to a gain of 0.4% at the open.

Later in the day, the U.S. was to release official data on unemployment claims, followed by industry data on existing home sales and a report on manufacturing activity in the Philadelphia area.