Asian stocks close mixed; Japan snaps losing streak

HONG KONG (MarketWatch) — Asian stocks ended mixed on Tuesday, with Japan breaking a four-day losing streak.

Japanese stocks rebounded on strong U.S. cues after four days of losses, with the Nikkei Average (JP:NIK)  up 0.5% and the Topix index (JP:I0000)  up 0.3%. The yen (USDJPY)   strengthened versus the dollar, trading at ¥101.371, from ¥101.494 on Monday.

Meanwhile, Australia's benchmark S&P/ASX 200 (AU:XJO)  rose 0.2%, while the Australian dollar (AUDUSD) slightly dropped to 92.65 U.S. cents, from 93.26 U.S. cents late Monday.

Click to Play Thai military declares martial law

Thailand's military has declared martial law, not long after a new caretaker prime minister took over from Yingluck Shinawatra. The WSJ's Ramy Inocencio asks James Hookway if this is a coup.

Hong Kong markets also bounced back from the previous day's drop, as the Hang Seng Index (HK:HSI) settled 0.6% higher. The Shanghai Composite Index (CN:SHCOMP)  moved up 0.2%, after the China Securities Regulatory Commission said it planned to limit the number of IPOs to 100, for the period from June to the end of 2014

Market-movers in Japan included semiconductor manufacturer Renesas Electronics (JP:6723) , up 3.7%, IT service provider Fujitsu (JP:6702) , up 3%, video-game machine maker Nintendo Co. (JP:7974) , up 2.8%, and electronics maker NEC Corp (JP:6701) , up 1.8%.

In Australia, iron ore producer Fortescue Metals Group (AU:FMG)  recovered 3.9% after a sharp fall on Monday.

In Hong Kong, online major Tencent Holdings (HK:2988)  shot up 4%, computer manufacturer Lenovo Group (HK:0992)  advanced 2%, and telecom giant China Mobile (HK:0941)  gained 1.8%.

However, South Korea (KR:SEU)  and New Zealand markets closed negative on Tuesday, down 0.2% and 0.6% respectively.

Thailand stocks price in martial law

Perhaps not surprisingly, Thailand's benchmark SET index (TH:SET)  ended the morning session 0.8% lower in the wake of the Royal Thai Army's declaration of martial law.

Reuters A Thai soldier takes up a position in front of the Royal Thai Police Sports Club in Bangkok.

The loss comes even as Army chief Gen. Prayuth Chan-ocha sought to assure the nation that this was not a coup. And the loss comes even though this is just the latest chapter in a months-long saga that has seen deadly rioting and the ousting of prime minister Yingluck Shinawatra (a saga the market has largely shrugged off, given that the SET was up 8.6% for the year ahead of Tuesday's open).

The coup of September 2006 — when Yingluck's brother was removed from office — did dent shares a bit, but they recovered in a matter of weeks. And those losses were small compared with the selloff in December of that year (a nearly 15% drop in a single day), when the markets rebelled against capital controls to deal with foreign-exchange issues.

And looking a little farther back into history, charts show that in the weeks after the previous coup in February 1991, stocks actually rose.

Meanwhile, among initial reactions from the analyst community is this comment from Fitch Ratings Asia-Pacific sovereigns chief Andrew Colquhoun:

"The imposition of martial law is not, in itself, negative for Thailand's ratings, although clearly we are keeping the situation under close review. It may even help to break Thailand out of the political deadlock of the past six months."

Colquhoun adds that the key to Thailand's outlook will be the achievement of "a functioning government."

For now, fresh elections are on hold due to the unrest, but we'll see if the army is able to calm the situation enough to get people to the polls.

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