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Tokyo shares down amid Egypt unrest, Asia holidays

Tokyo shares down amid Egypt unrest, Asia holidays

February 2nd, 2011 by PAMELA SAMPSON, AP Business Writer in News

BANGKOK (AP) - Tokyo shares posted mild losses Thursday as violent clashes between pro- and anti-government demonstrators in Egypt and a sluggish day on Wall Street dragged investor sentiment down. Most Asian markets were closed for Lunar New Year holidays.

Oil prices rose above $91 a barrel amid mixed U.S. crude and gasoline supply figures and the street fighting in Egypt. In currencies, the dollar was marginally up against the yen and the euro.

Trading was also muted because of the Lunar New Year holidays with markets closed in South Korea, Hong Kong, mainland China, Taiwan, Singapore, Malaysia and Indonesia.

The Nikkei 225 stock average fell 0.3 percent to 10,424.89 after surging almost 2 percent the previous day. Investors punished shares of companies releasing disappointing earnings.

Electronics giant Panasonic Corp. tumbled 3.2 percent after reporting that its October-December operating profit fell for the first time in five quarters. Ricoh Co., which makes cameras and office equipment, shed 9.8 percent. It said after market close Wednesday that its quarterly operating profit fell by a third from the previous year.

Among gainers, Sony Corp. rose 0.7 percent ahead of its earnings report later in the day.

Meanwhile, Australia's S&P/ASX 200 advanced 0.5 percent to 4,817.20, and New Zealand's benchmark added just under 0.1 percent to 3,349.89.

Australian insurers jumped amid relief that Cyclone Yasi - among the most powerful storms to ever hit the country - appeared to have caused less destruction along the northeast coast than anticipated. Insurance Australia Group Ltd. rose 3 percent, while Suncorp Group Ltd. was up 2.7 percent.

Elsewhere, analysts were calling for short-term caution as economic perils such as inflation in Asia and instability in the Middle East persist.

"We still view upside risks to inflation as being the most likely source of equity market volatility in the short term," Nomura International said in a report.

"The worries over food and fuel prices are likely to keep investors nervous as Asian policymakers balance inflation, social stability and economic growth," Nomura said.

China, in particular, is struggling to clamp down on excess lending by its state-run banks, which are pumping huge sums of money into the economy, hindering moves to bring politically risky inflation under control. The Communist Party is well aware that inflation could lead to social instability, although there is little chance in China of the type of massive revolt that is shaking Egypt and threatening to topple its government.

In New York on Wednesday, stocks finished mixed as investors weighed the impact of unrest in Egypt against better-than-expected news on the job market.

The Dow Jones industrial average rose 1.81 points, or less than 0.1 percent, to close at 12,041.97.

U.S. payroll processor ADP said that private companies added more jobs in January than analysts predicted. That's a hopeful sign for the Labor Department's monthly employment report, due out Friday.

Still, the broader Standard & Poor's 500 index lost 3.56 points, or 0.3 percent, to 1,304.03. The Nasdaq composite lost 1.63 points, or less than 0.1 percent, to 2,749.56.

Meanwhile, traders were waiting for more U.S. economic indicators later Thursday, including the release of weekly jobless claims and fourth-quarter productivity data.

On the corporate side, Dow Chemical Co., MasterCard Inc., and Merck & Co. were among those scheduled to release quarterly financial results.

In currencies, the dollar rose slightly to 81.64 yen from 81.63 yen late Wednesday. The euro fell to $1.3793 from $1.3798.

Benchmark crude for March delivery was up 66 cents at $91.51 a barrel in electronic trading on the New York Mercantile Exchange. The contract settled 9 cents higher at $90.86 on Wednesday.