Asian markets recovered partially and closed mixed on Tuesday amid continued profit taking following a strong rally last week. While a worse-than-expected Chinese trade data for April weighed on investor sentiment, markets in China and Hong Kong advanced on stronger-than-expected investment data.

In Asian trading on Tuesday, crude oil rose above $59 a barrel on growing investor optimism that the U.S. recession may have bottomed. Traders look forward to the weekly petroleum inventory data for the week ended May 8 from the Energy Information Agency on Wednesday.

Wall Street ended on a weak note on Monday with stocks moving mostly lower during the session, as traders chose to take profits after recent strong gains. All the major averages closed firmly in negative territory, although the tech-heavy Nasdaq posted a relatively modest loss. Billionaire investor Warren Buffet's Berkshire Hathaway's weak quarterly numbers also hurt sentiment to an extent.

Banking stocks bore the brunt of pressure on Monday after U.S. Bancorp, BB&T and Capital One revealed plans to sell common stock in order to raise proceeds to repay funds received under the government's financial bailout program. The Dow Jones Industrial Average fell 1.82%, the S&P 500 index drifted down 2.15% and the Nasdaq Composite closed down 0.45%.

On Tuesday, trading on Wall Street could be impacted by the release of the Commerce Department's report on the U.S. trade deficit for the month of March. The deficit is expected to widen to $29.0 billion from $26.0 billion in February. There are other key economic reports due to be released later in the week, including reports on retail sales, industrial production, and producer and consumer price inflation. Traders are also likely to keep a close eye on the weekly jobless claims report.

The Japanese market closed sharply lower, dragged down by financials, auto and other notable stocks, which advanced sharply over the past few sessions. The strengthening of the Japanese yen against the U.S. dollar also weighed on exporters. However, stocks belonging to pulp and paper, glass and ceramics, and forestry and fishery sectors closed firm.

The benchmark Nikkei 225 index closed at 9,299, down 153 points or 1.62% and the broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 15 points or 1.67% to 885.

Automakers led the decliners. Honda drifted down 1.38%, Suzuki declined 1.98%, Toyota edged down 1.32%, Nissan slipped 0.97% and Mazda tumbled 4.62%. Isuzu Motors slumped 7.33% on reporting its first net loss in 6 years for full year 2008.

In the technology sector, Advantest slipped 0.06%, Kyocera fell 1.66%, Fujitsu edged down 0.39% and Sony fell 2.97%, but Tokyo Electron rose 1.16% and Fanuc ended up 0.51%. Nuclear energy-related stocks such as Toshiba Corp and Japan Steel Works also closed higher.

Banking stocks were the worst hit. Mitsubishi UFJ Financial Group tumbled 5.04%, Sumitomo Mitsui Financial Group slumped 6.73%, Mizuho Financial Group plummeted 6.15% and Resona Holdings fell 4.26%.

Asahi Glass surged up 11.64% after Nomura Holdings Inc. raised its rating on the stock to buy from neutral despite the company posting a first-quarter loss. Advertising agency Dentsu Inc. plunged 7.49% after reporting a fourth- quarter loss of 24.6 billion yen.

Mitsubishi Materials tumbled 5.45% after its full-year net income plunged 92% to 6.11 billion yen. Sumitomo Heavy Industries plummeted 9.03% after projecting lower earnings for the current fiscal year.

In economic news, Japan's machine tool orders plunged 80.4% year-over-year in April after falling 85.2% in March, Machine Tool Builders' Association said Tuesday. Domestic orders dropped 77.5%, while foreign orders were down 82.6%. On a monthly basis, orders were up 19.9%, with 58.4% rise in orders from home. At the same time, external orders fell 2.5%.

Meanwhile, Japan's leading index increased to 76.6 in March from 74.5 in February, a report from the Economic and Social Research Institute showed Tuesday. Economists expected the indicator to come in at 77. On the other hand, the coincident indicator declined to 84.9 in March from 85.2 in the preceding month. Economists were expecting the reading to be 85.8.

After trading in a narrow range all through the day, the Australian market eventually ended sharply lower, led by losses in banks and big-miners. The benchmark S&P/ASX200 closed at 3,877, down 49 points or 1.24% and the broader All Ordinaries index fell 47 points or 1.2% to 3,864.

Wheat exporter AWB slumped 6.98% after it downgraded its half-yearly profit forecast to A$8 million to A$9 million from a previous forecast of A$10-A$12 million, its second downgrade in 2009.

Big miner BHP Billiton fell 2.75% and its rival Rio Tinto moved down 1.15%, but Iluka Resources rose 0.90%. Likewise, gold miner Newcrest Mining rose 0.68% and Lihir Gold added 1.32%, but Newmont Mining closed down 0.4%.

Fortescue Metals Group slumped 6.19% after rejecting speculation that it is seeking a listing on the Shanghai stock exchange. Among aviation stocks, Qantas Airways fell 2.71% and Virgin Blue Holding tumbled 3.51%.

Banking stocks closed lower across the board, National Australia Bank fell 3.27%, ANZ ended down 1.54%, Commonwealth Bank slipped 0.22%, Westpac Banking moved down 0.34% and investment bank Macquarie Group plummeted 5.56%.

Among Insurers, while AMP rose 1.52%, QBE Insurance declined 1.85%, AXA Asia Pacific closed down 0.96% and Henderson Group closed unchanged.

Victorian casino operator Crown rose 0.27% after it reached an agreement with the state government to expand the number of gaming tables at its Melbourne casino. Ports and rail freight operator Asciano Group advanced 3.77% after the company moved closer to reaching an agreement to sell all or part of its businesses to lighten its crippling debt.

Energy stocks closed mixed. Woodside Petroleum fell 1.97%, while Oil Search rose 0.38%. Santos was in a trading halt, as it plans to raise up to $3 billion from an equity rising.

Oil explorer Origin Energy gained 0.68% and electric distribution company AGL Energy added 0.55%. In the retail sector, Woolworths gained 0.78%, Wesfarmers, which owns Coles, added 0.75%, Harvey Norman Holding rose 0.63% and David Jones closed up 0.26%.

The South Korean market snapped a three-day losing streak on profit taking. The benchmark KOSPI closed at 1,404, down 12 points or 0.8%. Volume was significant at 754.8 million shares worth 6.54 trillion won (US$5.26 billion) and decliners outnumbered advancers by 503 to 309. Foreign funds offloaded stocks worth KRW6.5 billion and domestic institutions were net sellers of stocks worth KRW79 billion.

Banking stocks closed weaker amid renewed concerns about U.S. banks. Woori Finance fell 4.74%, Korea Exchange Bank tumbled 5.56% and KB Financial, the holding firm of Kookmin Bank closed down 4.68%. Construction stocks such as Hyundai Engineering & Construction and GS Engineering also ended sharply lower.

Automaker Kia Motors moved up 1.65% and Hyundai Motor rose 0.93%, but Ssangyong Motor fell 1.48%. Technology stock LG Electronics gained 0.49% and Hynix Semiconductor added 2.46%, but LG Display LCD ended down 2.35% and market heavyweight Samsung Electronics edged down 0.36%.

Shipbuilder Daewoo Shipbuilding tumbled 4.11%, Hyundai Heavy Industries declined 1.61% and Samsung Heavy Industries fell 2.52%. Among other notable decliners, Korean Air Line fell 2.60%, Oil stock SK moved down 1.21%, steel maker POSCO drifted down 1.62% and telecom stock SK Telecom closed down 0.54%.

In economic news, Bank of Korea Governor Lee Seong-tae and his board on Tuesday voted to keep interest rates on hold, maintaining the record low of 2.0 percent, in line with expectations. The pace of the domestic economic slowdown has moderated thanks to the narrowing scale of the decline in exports and proactive fiscal and monetary policy strives although domestic demand remains sluggish, the minutes said.

The New Zealand market fell modestly on extended profit taking. The benchmark NZX-50 index closed at 2,813, down 17 points or 0.58% and turnover totaled just $85.7 million.

Market heavyweight Telecom fell 1.15% after the New Zealand dollar strengthened against the Aussie currency. Construction company Fletcher Building ended down 1.46% despite a reasonably positive housing market report for April.

Contact Energy closed up 1.16%, Auckland Airport moved up 1.20%, Fisher & Paykel Healthcare rose 1.59% and Pike River Coal advanced 1.89%, but Fisher & Paykel Appliances tumbled 4.48%, Freightways moved down 1.30%, Nuplex declined 2.50% and Sky City drifted down 1.02%.

Brewer Lion Nathan rose 0.41% after the company agreed on the details of a takeover bid with Japan's Kirin Holdings. Pike River Coal added 1.89% after the coal miner responded to an ASX query on the recent surge in its stock price.

Retailer Hallenstein Glasson fell 2.21% and Warehouse Group closed down 0.78%, but jeweler Michael Hill moved up 1.47%. Telstra ended down 0.49%, Tower declined 1.21%, Rakon fell 3.68% and Ryman Healthcare tumbled 4.76%, while energy stock TrustPower and Vector finished unchanged.

ON the economic front, the total number of houses sold in New Zealand decreased to 6,210 in April from 6,694 in March, but was higher than 4,450 sales in April last year, the latest report from Real Estate Institute of New Zealand showed Tuesday.

Mike Elford, the institute's president said the figures reinforce a certain level of stability in the property market. The figures are not hugely significant, but enough to generate a degree of optimism about the way forward from her, he added.

The Chinese market closed higher, led by property, coal and steel shares. The benchmark Shanghai Composite index closed at 2,618, up 38 points or 1.49% after investment figures released by the government raised expectations that the economy will turn around. China's investments in factories, property and other fixed assets jumped 30.5 percent in January-April from a year earlier, the government reported. The Hong Kong market also fared well, helped by a late recovery. The benchmark Hang Seng index rose 66 points or 0.38% to 17,154.

Meanwhile, the Indian market ignored lower-than-expected IIP data and bounced back sharply amid intense buying in index heavy weights. The benchmark Sensex was last trading at the day's high of 12,165, up 482 points or 4.13% over the previous close. Among the other markets in the region, Singapore's STI Straits Times index closed up 0.56%, but Taiwan's TWII Weighed index fell 3.23%.

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