Asian Markets Jittery as China's CPI Rises Again

In Asia Tuesday Hong Kong's Hang Seng Index fell 1% to 22,890 and in China the Shanghai Composite Index remained virtually unchanged. Japan's Nikkei 225 Index inched up 0.2% to close at 10,747.

Shoppers in China are well aware that prices are ballooning, but the figures released today from China's National Bureau of Statistics supply the proof. The agency reported that the country's consumer price index rose 4.9% in January.That's more than the 4.6% recorded last year and a hefty sum to tack on to the cost of everything from duck eggs and pork to rent and cars, especially coming on the tails of a 4.6% gain last month. And while the size of China's economy has just moved into second place in the global ranking, millions of people remain in poverty and struggle to pay the extra yuan or two for basic staples.

HK Real Estate Suffers

Developers plunged in Hong Kong on fears of yet another interest rate hike and a rise in reserve ratios at major banks. Sino Land tumbled 2.5%, Cheung Kong dropped 2.3% Henderson Land sank 1.6% and Sun Hung Kai fell 1.1%.

Other big losses included Ausnutria Dairy which plummeted 5.7% after forecasting a slump in profits, Cathay Pacific Airways, which tumbled 3.4% and telecom company Unicom, which dived 3.1%.

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Among retailers, Esprit and Li & Fung swapped positions from yesterday, with Li & Fung rising 2.1% to counter yesterday's losses and Esprit falling 1.9%, giving up yesterday's gains.

In China banks dragged under the shadow of looming interest rates and a dip in expected new lending figures. Shanghai Pudong Development Bank slid 0.8%, Industrial and Commercial Bank of China, Agricultural Bank of China and China Minsheng Bank all slipped 0.7% and Bank of Communications declined 0.5%.

Copper Hits New High

Losses elsewhere in the market were balanced by gains in the metals sector as copper hit a new record high. Jiangxi Copper leaped 3.2% and copper miner Sichuan Western Resources jumped 1.8%. Prices rocketed on the London Metal Exchange sending most mining companies higher. Aluminum Corp. of China surged 4.3%, Ziijin Mining shot up 1.6% and Zhongjin Gold rose 0.8%. China Nonferrous Metal Industry, an engineering firm that supports mining projects and produces valuable rare earths, rallied 5%.

In Japan rising metals prices also pushed up the commodities sector. Sumitomo Metal Mining rose 2.3% and Mitsui & Co., which is heavily invested in mining and steel businesses, jumped 2.5%. Mitsubishi Corp., another commodities trader, advanced 1.7%.

It was a good day for Japanese electronics companies with Alps rising 4.3%, Casio Computer jumping 4.1% and Pioneer advancing 3.5%. Gamemaker Nintendo added 1.2% beating competing game maker Sony, which dipped 0.4% and software developer and arcade game firm Konami, which slid 1.4%.

Other big movers in Tokyo included GS Yuasa, a battery maker that supplies the lithium-ion batteries for Mitsubishi's cute little i-MiEV electric car. The company surged 5.4% and boosted its profit forecast. Tokyo Tatemono, a property developer also climbed onto the forecast bandwagon, zipping up 4.1%.