Market Report - Asia Mixed; DVD War Ends

Toshiba sources say it plans to abandon its HD DVD format, leaving the Sony-led Blu-ray as the next generation standard in the $24-billion industry


ZHANG: Asia stocks were mixed on Monday, with Japan getting a boost on news of an impending end to the DVD format war.

Japan's Nikkei ended 0.1 percent higher (13,635) settling back from larger gains early in the session.

The apparent end of the DVD format war brought cheers from investors and analysts, sending shares of rivals Toshiba and Sony higher.

Toshiba plans to abandon its HD DVD format, after losing the support of key studios and retailers, leaving the Sony-led Blu-ray as the next generation standard.

The $24-billion home DVD market has been paralyzed by deep entertainment industry battle lines, as well as consumer confusion similar to the Betamax-VHS war of the 1980s.

Scrapping HD DVD is expected to cost millions, but Nikko Citigroup actually hiked its Toshiba rating to buy and JP Morgan predicted the move would cut hundreds of millions in promotional expenses.

At the end of the day, Toshiba gained 5.7 percent, while Sony was up 1 percent.

Steel stocks were also a focus across the region, as Japan's JFE Steel Corp, and South Korea's POSCO agreed to steep price hikes in iron ore from a Brazilian mining company. The 65 percent rise in iron ore could squeeze margins for the steel industry, which is already facing rising raw material costs.

U.S. markets are shut on Monday for the Presidents day holiday. Later this week markets are likely to focus on U.S. inflation and housing starts for signs of whether the U.S. is falling into recession.

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