Asian Stocks Pare Early Losses

(RTTNews) - Asian stocks ended mixed on Friday, paring early losses, as energy stocks advanced and investors found comfort in Chinese industrial output and retail sales data that came along expected lines. U.S. president Barack Obama warned of possible military strikes in Iraq after Islamic militants seized large swaths of northern Iraq and threatened to take their fight to Baghdad.

Japanese shares rose notably after the central bank kept its monetary policy steady, saying the economy is recovering moderately despite fears a sales tax hike will dent growth. The Bank of Japan held off expanding its stimulus program while raising its view on overseas economies -- mainly advanced economies. The policy board unanimously decided to increase the monetary base at an annual pace of about JPY 60-JPY 70 trillion, as widely expected by economists.

The benchmark Nikkei average closed up 0.83 percent at 15,097.84 after falling to a 2 1/2-week low earlier in the day. The broader Topix Index advanced half a percent to finish at 1,243.97. Later in the day, Prime Minister Shinzo Abe announced that the government will aim to cut the corporate tax rate below 30 percent in stages over a few years from the next fiscal year to spur investment in the world's third-largest economy.

In stock-specific action, oil explorer Inpex Corp. soared 4.5 percent as a result of oil price hike brought by the growing unrest in Iraq. Advantest rallied 3.6 percent on a Nikkei report that the tech major has hiked its target for operating margin for the current fiscal year. Konica Minolta shed 0.6 percent on a brokerage downgrade.

Chinese shares gained ground, with the benchmark Shanghai Compositing rising 0.93 percent to 2,070.71, after a slew of economic reports fueled hopes that the world's second-largest economy is stabilizing. Hong Kong's Hang Seng Index rose 0.62 percent to 23,319.17.

China's industrial output grew 8.8 percent in May from a year earlier, coming in line with expectations following April's 8.7 percent increase, while retail sales advanced 12.5 percent annually after rising 11.9 percent a month ago, figures from the National Bureau of Statistics showed. Economists expected retail sales to rise by 12.1 percent in May. Meanwhile, urban fixed asset investment grew 17.2 percent in the first five months of the year, matching expectations.

Australian shares fell to 3-1/2 week lows, tracking declines in overseas markets as concerns escalated about Iraq. The benchmark S&P/ASX 200 closed 0.4 percent lower at 5,405.1 after dipping to a two-month low earlier in the session. Miners bore the brunt of the selling as iron ore prices continued to fall. Big miners BHP Billiton and Rio Tinto lost 1-2 percent, while smaller rival Fortescue Metals Group slumped 6.2 percent. Mineral Resources dropped 1.6 percent, extending Thursday's 4 percent loss, after it acquired a 12.8 percent stake in Aquila Resources.

Newcrest Mining bucked the downward trend to close 1.8 percent higher as gold prices rose to a fresh two-week high on Thursday on safe-haven buying following outbreak of violence in Iraq and disappointing U.S. economic reports. Energy stocks also found some support after crude oil prices hit a nine-month high. Woodside Petroleum advanced 1.9 percent, Oil Search added half a percent and Santos gained a percent. In the banking sector, ANZ, Commonwealth, NAB and Westpac fell between 0.2 percent and 0.9 percent.

South Korea's Kospi average fell 1.03 percent to 1,990.85, its biggest loss in seven weeks, after U.S. President Barack Obama threatened to use military strikes in Iraq against Sunni Islamist militants. Overseas investors turned net sellers and offloaded shares worth a net 254 billion won, snapping 21-day buying streak, preliminary data showed.

New Zealand shares lost ground, tracking weak global cues and on perception that valuations have run ahead of fundamentals. The benchmark NZX-50 Index dropped 0.47 percent to 5,171. Fletcher Building, the nation's largest construction company, fell 1.3 percent after Australian employment data released on Thursday painted a mixture picture of the economy. OceanaGold shares soared 7.1 percent after the company said the recent strong lift in its share price was probably due to an increase in gold price.

In economic releases, food prices in New Zealand rose 0.6 percent in May from the previous month, Statistics New Zealand said on Friday, following a similar rise in April. Another report from Business NZ revealed that activity in New Zealand's manufacturing sector continued to expand in May but at a slower pace.

Elsewhere, India's Sensex was down 1.2 percent, with oil and gas stocks retreating sharply as Brent crude futures surged to nine-month highs. Indonesia's Jakarta Composite Index was declining 0.2 percent and the Taiwan Weighted average edged down 0.1 percent, while the benchmark indexes in Singapore and Malaysia were slightly higher.

Singapore's unemployment rate rose slightly to a seasonally adjusted 2 percent in the first quarter of 2014 from 1.8 percent in the fourth quarter of 2013, a report from the country's Ministry of Manpower showed. Indonesia's central bank left interest rates unchanged for the seventh consecutive month as a slowdown in growth helped to contain the current account.

U.S. stocks fell notably overnight, with escalating violence in Iraq and disappointing retail sales and jobless claims data weighing on the markets. The Dow and the S&P 500 dropped about 0.7 percent each, while the tech-heavy Nasdaq fell 0.8 percent.