Asian indices negative as China slumps

Japan's Nikkei average gave up gains on Monday as investors snapped up profits on recent climbers, prompted by a slump in Chinese equities after China raised reserve requirements for banks.

But a positive mood largely remained intact as stronger than expected earnings at JPMorgan raised expectations for top US banks, many of which report this week, including Citigroup and Goldman Sachs.

The Nikkei was stuck in a tight range as resource- and energy-related stocks gained on higher oil and commodity prices; the benchmark ended the session flat at 10,503.

Resistance for the Nikkei now looms at 10,621, an eight-month peak hit last week, market players said. If that level is breached, the next target investors are eyeing is 10,638, a high hit in May last year.

But market players said that buying by foreigners would likely continue. The Nikkei has climbed 2.6 per cent this year and is up 15 per cent since the start of November after foreigners changed their stance on Japanese stocks to neutral from underweight.

China's CPI figures, due on Thursday, made the markets a little jittery today, with the Financial Times reporting an expectant drop of 4.6 per cent in the numbers, despite China's central bank tightening money supply in the economy to mitigate inflation worries.

Chinese markets were in the slump, and the Shanghai Composite shed 3% to close at 2,707.

Even the Hang Seng saw a fall of 0.5% at 24,157.

Other major Asian indices saw a negative closing today, with the Taiwan Weighted down nearly 1% at 8,925, the Seoul Composite at 2,100 down 0.4% and the Straits Times off by 0.3% at 3,237.

On the other hand, European indices saw a positive start as the markets eyed positive data from US companies, after JPMorgan Chase reported strong earnings for the December quarter, and other banks are also expected to declare positive numbers during the earnings week.

At 3 pm, the najor European indices were trading flat, however. THe CAC 40 was quoting at 3,972 down 0.3%, while the DAX was down 0.1% at 7,069 and the FTSE 100 was at 6,001.