South Korean index closes above 2,000 for first time

Equities markets in the Asia-Pacific region were mostly lower on Wednesday, but there were a couple of notable exceptions to the declining trend. In South Korea, the Kospi index added 0.6 percent to 2,004.22, the first time it has closed above the 2,000 level. The gains came after Moody’s raised South Korea’s debt rating to A2, the first increase in 5 years. China’s equities markets also saw gains, with the Shanghai Composite adding 2.7 percent to 4,323.97 on increased investor confidence. On the other hand, Australian equities saw declines as the Sydney Ordinaries dropped 1.2 percent to 6,378 and the S&P/ASX200 was 1.27 percent lower to 6,340.5. Elsewhere, the Taiex in Taiwan was down 0.04 percent to 9,740.13, while in Hong Kong the Hang Seng index fell 0.47 percent to 23,362.18. In India the Sensex dropped 0.61 percent to 15,699.33. The Straits Times index was 0.86 percent lower to 3,658.53 in Singapore.

Tokyo’s major indices were also lower on the session. The Nikkei 225 fell 0.8 percent to 17,858.42, while the Topix index dropped 0.68 percent to 1,754.03. On the other hand, the Mothers market of small and mid-caps added 0.66 percent to close at 857.81. The retail sector was mixed. In mergers rumors, department stores Mitsukoshi (TYO: 2779) and Isetan (TYO: 8238) were said to be talking about making a capital alliance and could look to merge later on. Mitsukoshi added 7.51 percent to ¥587, while Isetan closed even at ¥1,901. Elsewhere in the retail sector, Seven & I (TYO: 3382) fell 0.29 percent to ¥3,490. Exporters were hurt by a stronger yen. In the automobile manufacturing sector Toyota Motor (TYO: 7203.T; NYSE: TM; LSE: TYT) was 1.33 percent lower to ¥7,410, while Honda Motor (TYO: 7267; NYSE: HMC) dropped 1.78 percent to ¥4,420. In the electronics sector Sony (TYO: 6758; NYSE: SNE) was down 0.32 percent to ¥6,280 and Matushita Electric Industrial (TYO: 6572; NYSE: MC) fell 3.59 percent to ¥2,285. In the oil sector, Nippon Oil (TYO: 5001) dropped 3.86 percent to ¥1,121 as the price of crude oil continued to decline.

Most European markets saw declines for the second session in a row. The major exception was Madrid’s IBEX, which added 0.16 percent to 14,937.7. In Paris, the CAC-40 dropped 1.19 percent to 5,837.11, while the Dax was 1.46 percent lower to 7,692.55 in Frankfurt. The FTSE Eurofirst 300 fell 0.92 percent to 1,571.04. The biggest decliners on the day were in the semiconductors and engineering sectors. Engineering group Siemens (FWB: SIE; NYSE: SI) was down 5.98 percent to €99.34 in Frankfurt after it sold its auto parts unit for a price that was lower than had been anticipated and said at the same time that it will purchase American medical diagnostic products manufacturer Dade Behring Holdings (NAS: DADE) for $7 billion, a price analysts say is too high. Siemens’ decline came even though it reported that its net income was up by 54 percent in its fiscal third quarter from the same period last year. In Paris, meanwhile, STMicroelectronics (Euronext: STM; NYSE: STM) dropped 6.42 percent to €12.83 after it reported losses for the quarter.

The biggest winner on the Dax was Fresenius Medical Care (FWB: FREG), which added 1.68 percent to €35.13 on news that the United States Congress is debating whether to expand Medicare dialysis coverage for senior citizens from 30 months to 42 months. Meanwhile, media group Vivendi (Euronext: VIV) was the best performer on the CAC-40 with a gain of 1.51 percent to €32.27. Carmakers were mixed on the session. In Frankfurt, DaimlerChrysler (FWB: DCX; NYSE: DCX; TYO: 7663) added 1.81 percent to €67.15 after it reported profits that were higher than expected from its Mercedes unit. On the other hand, Renault (Euronext: RNO) dropped 3.51 percent to €108.10 while Peugeot (Euronext: UG; OTC: PEUGY) fell 5.93 percent to €61.70 on profit-taking. Truck manufacturer Man (FWB: EDF1) was also lower, dropping 2.45 percent to €106.07.

London’s markets saw losses as well. The FTSE 100 dropped 0.68 percent to 6,454.3, while the FTSE 250 was down 1.46 percent to 11,415.2. Pharmaceutical group GlaxoSmithKline (LSE: GSK; NYSE: GSK) topped the 100, adding 2.33 percent to £12.75 on an unexpected increase in second quarter profits based on greater demand for its Advair asthma treatment. GSK also announced an expansion of its share buy-back program. Meanwhile, on the 250 electronics and engineering group Renishaw (LSE: RSW), which makes gauges and meters, was the top performer with a gain of 14.33 percent to 684p. Other gainers on the day included the banking sector. On the 100, Northern Rock (LSE: NRK) added 1.87 percent to 817p, while on the 250 Bradford & Bingley (LSE: BB) gained 0.97 percent to 416.75p and Close Brothers Group (LSE: CBG) was up 1.93 percent to 845p. Defense aerospace group BAE Systems (LSE: BA; OTCBB: BAESY) was 1.63 percent higher to 435.25p. On the losing side, British Energy had the worst day on the 100, dropping 5.21 percent to 483.5p on a broker downgrade. The worst performer on the 250 came from the semiconductors sector, where CSR (LSE: CSR) fell 11.28 percent to 770.5p. The mining sector declined on copper prices that were lower. Antofagasta (LSE: ANTO) was 2.47 percent lower to 723p, while Rio Tinto (LSE: RIO) was down 3.65 percent to £35.90. On the 250, property developer Daejan Holdings (LSE: DJAN) fell 5.75 percent to £38.86, while builder Severfield-Rowen (LSE: SFR) dropped 5.69 percent to £22.36.

Wall Street was higher in midday trade after an up-and-down morning on nerves from Tuesday’s declines and news that existing home sales were down by 3.8 percent in June. The Dow Jones Industrial Average was 0.38 percent higher at mid-session to 13,769.71 after gaining as much as 100 points at one point and losing up to 30 points at another in morning trade. The Nasdaq Composite was 2,647.27, up 0.28 percent, while the S&P 500 had added 0.36 percent to 1,516.51. There were notable gains, however. Pharmaceutical group Merck (NYSE: MRK) added $1.61 to $53.33 after it said it would buy NovaCardia (NAS: NCAR), a clinical-stage pharmaceutical firm that specializes in cardiovascular disease. In the aerospace sector, Boeing (NYSE: BA; TYO: 7661) gained $3.56 to $107.36 after it reported that it earned $1.35 per share in the second quarter, higher than the earnings of $1.16 per share that had been anticipated. The internet sector was mixed after Amazon.com (NAS: AMZN) said that its earnings in the second quarter were 19 cents per share, up from 5 cents per share in the same quarter last year. The report brought upgrades – from “neutral to “outperform” from Credit Suisse (NYSE: CS; SWX: CSGN) and from “accumulate” to “buy” from ThinkEquity, which also raised Amazon’s target share price from $80 to $105. Amazon was up $17.75 to $87 in early afternoon trade. Other gainers in the sector included Yahoo (NAS: YHOO), which gained 9 cents to $24.93 and eBay (NAS: EBAY), which was 56 cents higher to $33.62. Google (NAS: GOOG; LSE: GGEA), however, dropped $3.99 to $510.01.