Asia stocks retreat on weak earnings concerns; Nikkei off 1-year high

Investing.com - Asian stock markets were mostly lower on Wednesday, taking cues from a lackluster trading session on Wall Street as shares in Japan came under pressure as a majority of the companies in the index went ex-dividend, while concerns over declining corporate profits weighed on shares in Hong Kong.

During late Asian trade, Hong Kong's Hang Seng Index dropped 1.15%, Australia’s ASX/200 Index rose 1%, while Japan’s Nikkei 225 Index shed 0.7%.

The Nikkei came off a one-year closing high as market participants said 195 out of 225 companies traded on the index passed the deadline for purchasers of stock to get rights to dividends for the fiscal year ending March 31.

Some investors had bought stocks because they were due to pay dividends and were now selling once the entitlement date to receive the dividend had past.

Mizuho Financial Group Takeda Pharmaceutical both slumped 3.45% as they carry the highest dividend yields among Nikkei companies.

On the upside, Sharp saw shares surge 15.1% following reports that Taiwan’s Hon Hai Precision Industry is buying 10% of the Japanese electronics manufacturer for JPY66.91 billion, with the two to form a tie-up in liquid-crystal-display production.

Consumer electronics giant Sony rose 1.8% after a Nikkei business news report said that its money-losing television business would be placed under the direct control of the company’s new chief executive officer.

Elsewhere, shares in Hong Kong came under pressure amid concern over sliding corporate profits.

Copper mining giant Jiangxi Copper Company saw shares drop 2.35% after reporting that net income decreased to CNY2.27 billion in the six months ended December 31, compared with CNY2.79 billion a year earlier.

Angang Steel declined 2.6% after the biggest Hong Kong-traded steelmaker reported a wider second-half net loss because of waning demand and high raw-material costs.

Gome Electrical Appliances tumbled 19.2% after the nation’s second-largest electronics retailer posted a 6% drop in full-year net income to CNY1.84 billion.

Retailer Li & Fung dropped 5.45% after saying it plans to raise HKD3.9 billion in its biggest stock sale since its initial public offering in 1992 to help fund acquisitions.

But shares in Australia outperformed regional equities, ending at a four-month closing high as banks led gains after the Reserve Bank of Australia said in its financial stability review that the Australian banking sector is in relatively good shape.

National Australia Bank shares rose 1.15%, ANZ Banking Group added 1.2%, while shares in Commonwealth Bank of Australia advanced 1.05%.

Meanwhile, European stock markets were broadly lower after the open. The EURO STOXX 50 shed 0.15%, France’s CAC 40 dipped 0.25%, Germany's DAX fell 0.1%, while London’s FTSE 100 edged 0.3% lower.

Later in the day, Germany was to release preliminary data on consumer price inflation, while the U.S. was to produce official data on durable goods orders.