Reply #7: Asia mostly higher, but Japan retreats

[ozymandius]

HONG KONG (MarketWatch) -- Asian markets were mostly higher Wednesday, encouraged by Wall Street gains after a long holiday weekend. Hong Kong shares raced to a record high in early trading while Japanese stocks gave up early gains on losses in financials such as Sompo Japan Insurance and Mizuho Financial Group.

Hong Kong's Hang Seng Index rose 0.9% to 24,097.07, coming off the record high of 24,283.15 that it touched earlier in the session.

In Tokyo, the Nikkei 225 average was well on its way to end lower for the third straight day. The index fell 0.7% to 16,312.93 by late afternoon, after it rose as high as 16,553.22 earlier in the day. The broader Topix index declined 1.1% to 1,578.71.

Andrew Sullivan, director of sales at Daiwa Securities SMBC in Hong Kong, said the weakness in Japanese shares was because of the stronger yen, local companies' preference to hold cash rather than distributing it among shareholders and the absence of "any real pickup in domestic consumption".

Sullivan said although the markets had "repriced" some risks related to the subprime loans market, investors were still being cautious.

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