Asian Markets Tread Water

LONDON -- Asian stocks continued to tread water Thursday on thin end-of-year trading, with the major indices ending mixed.

In China, the Shanghai Composite climbed 75 points, or 1.4%, to 5308. After a similar morning rally in neighboring Hong Kong, the Hang Seng gave away its early gains to end 285 points, or 1%, in the red, at 27,842. The Nikkei finished 88 points, or 0.6%, down, at 15,564, while the South Korean Kospi rose 2 points, or 0.1%, to 1908.

"Toward the end of the year, most of investors are becoming more cautious. The market is lacking focus, with no special stock driving the market to go up," says Castor Pang, a buy-side strategist for Sun Hung Kai in Hong Kong.

Market turnover on the Hang Seng dropped to HK$76.1 billion, or $9.8 billion, vs. over HK$81 billion last week.

Pang adds that investors focused their attention on selling shares of China Mobile(CHL Quote - Cramer on CHL - Stock Picks), ahead of Beijing's new plans to restructure the Chinese wireless industry in 2008. Market participants think that may make China Unicom(CHU Quote - Cramer on CHU - Stock Picks) and China Netcom(CN Quote - Cramer on CN - Stock Picks) more competitive rivals, he says.

Shares in China Mobile dragged on the Hong Kong exchange, as they fell 2.3%, to HK$138.60, while those of the smaller competing operators surged. China Telecom(CHA Quote - Cramer on CHA - Stock Picks) soared 6.3%, to HK$6.28, and China Unicom jumped 3.6%, to HK$17.98, and China Netcom leapt 3.4%, to HK$24.05.

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