Asian markets closed modestly higher on Friday after the results of much-awaited stress tests on 19 U.S. banks dispelled uncertainty and speculation surrounding the health of the U.S. banking sector. Investors were relieved that there were no nasty surprises. Upbeat readings on the job market and sales at major retailers in the United States also offered some support ahead of the weekend.
Crude oil price closed at a near six-month high of $56.71 a barrel in New York trading on Thursday amid simmering hopes for an economic recovery that could pave way for a rebound in world oil consumption. In Asian trading on Friday, crude oil was last trading firm at above $57 a barrel.
The U.S. markets closed with sharp losses on Thursday, partly due to profit taking, as traders cashed in on the market's recent gains ahead of the release of the results of the government's stress tests of the nation's nineteen largest financial institutions. Though traders were not expecting any major surprises from the results of the stress tests, uncertainty about the reaction to the release scheduled after trading hours caused the sell-off.
Some additional selling pressure was generated by the release of the results of the Treasury Department's auction of $14 billion worth of 30-year bonds, which attracted below average demand amid record government debt sales. The Dow Jones Industrial Average edged down 1.2%, the Nasdaq Composite fell 2.44% and the S&P 500 index closed down 1.32%.
The Labor Department report showed that jobless claims fell to 601,000 from the previous week's revised figure of 635,000. Economists had been expecting jobless claims to edge up to 635,000 from the 631,000 originally reported for the previous week.
After the close of the regular trading session on Thursday, the U.S. bank regulators released the results of stress tests on 19 major U.S. banks. The results showed that 10 of the 19 banks tested need to raise a total of $74.6 billion. The banks involved in the exercise account for two-thirds of the assets and more than half the loans in the U.S. banking system.
The Japanese market rose for the fourth day in a row, helped by easing concerns over U.S. banks' financial standing after the stress test results. While banking, brokerage and insurance stocks closed stronger, stocks of auto, nonferrous metals and rubber products companies ended deep in the red.
The benchmark Nikkei 225 index rose 47 points or 0.5% to 9,433, a fresh six-month high. The broader Topix index of all First Section issues on the Tokyo Stock Exchange closed at 895, up 9 points or 1.06%.
In the banking sector, Mitsubishi UFJ Financial Group surged up 6.16%, Sumitomo Mitsui Financial Group advanced 4.08%, Mizuho Financial Group rallied 5.13% and Resona Holdings added 3.52%.
Insurer Mitsui Sumitomo Insurance gained 4.32%, Sompo Japan Insurance climbed 9.47% and T&D Holdings soared 6.48%. Among brokerages, Nomura Holdings rose 4.60% and Daiwa Securities Group surged up 7.09%.
Clothes seller Fast Retailing rose 1.65% after its same-store sales at Uniqlo stores in Japan jumped 19.2% in April. Fuji Heavy Industries tumbled 5.58% after the maker of Subaru cars posted its first net loss in 15 years for the fiscal year ended March.
After the close of market hours, Toyota Motor, the world's largest automaker, reported a net loss of 436.9 billion yen ($4.4 billion) for the year to March and warned that it would plunge deeper into the red this year because of the global economic downturn. The stock closed down 1.49%. Honda fell 3.28% and Suzuki declined 3.66%, but Nissan rose 0.57% and Mazda added 1.14%.
Among high-tech stocks, Tokyo Electron slipped 0.66%, Kyocera moved down 1.74%, Fanuc fell 1.70% and Sony closed down 0.73%, but Advantest advanced 4.18% and Fujitsu gained 1.74%.
On the economic front, the Bank of Japan board members predicted that the Japanese economy is likely to continue to deteriorate through the end of 2009, minutes from the monetary policy meeting revealed on Friday. Some of the board members said that additional steps may be required to assist corporate financing, and that the purchase of corporate bonds was acting as a safety net for the near term - although they didn't want the bank to get overly involved in the process.
The Australian market closed modestly higher, helped by late buying in the last couple of hours. The benchmark S&P/ASX200 closed at 3,942, up 3 points or a mere 0.08%, while the broader All Ordinaries Index fell 7 points or 0.2% to 3920.
Banks closed mostly higher. National Australia Bank rose 2.98%, Commonwealth Bank gained 1.83%, Westpac Banking added 1.43% and investment bank Macquarie Group closed up 0.85%, but ANZ slipped 0.84%.
Big miners closed mostly lower after copper prices fell from a three-week high in New York on Thursday. HP Billiton moved down 1.06% and Iluka Resources fell 1.42%, but Rio Tinto rose 0.79%. Gold miners closed almost unchanged after the spot price of gold moved up $0.70 per fine ounce in Sydney from Thursday's close.
Telstra Corp slipped 0.31% after the company named a new chief executive and chairman on Friday. Fertilizer maker Incitec Pivot declined 1.67% ahead of its first-half earnings announcement on Monday.
Rail and port infrastructure company Asciano Group surged up 26.57% on reports about receiving a bid from Global Infrastructure Partners, a New York-based fund. ResMed rallied 4.21% on reporting net income for the third quarter of $39.19 million or $0.51 per share, compared to $29.68 million or $0.38 per share in the year-ago quarter.
Stockland Group closed unchanged after the company decided to participate in GPT's capital raising to maintain its economic interest. Retailer Woolworths edged up 0.08% and David Jones rose 2.47%, but Harvey Norman Holding slipped 0.31% and Wesfarmers, which owns Coles, fell 1.89%,
In the media sector, News Corp declined 1.30%, Consolidated Media fell 2.81%, Fairfax Media slipped 0.88% and Severn Network closed down 0.85%. Insurer AMP slipped 0.19%, QBE declined 0.98% and Henderson Group slumped 6.42%, but AXA Asia Pacific rose 0.92%. In the oil & gas sector, while Oil Search and Santos closed in the red, Woodside Petroleum closed firm.
In economic news, Australia's short-term visitor arrivals fell a seasonally adjusted 1% month-over- month in March, following a 6.1% rise in February, the Australian Bureau of Statistics said Friday. Tourist arrivals totaled 473,600 in March. On the basis of the original estimates, about 488,600 tourists arrived into the country in March.
Meanwhile, the short-term departures by residents from Australia dropped a seasonally adjusted 2.5% in March, after a 3.5% increase in February. Resident departures numbered 464,900 on an adjusted basis and 430,100 on the basis of original estimates in March.
The South Korean market finished a choppy session modestly higher. The benchmark KOSPI closed at 1,412, up 11 points or 0.79%. Volume was significant at 705.8 million shares worth 7.29 trillion won (US$5.84 billion) and gainers outnumbered losers by 468 to 338.
Among notable gainers, market heavyweight Samsung Electronics closed up 0.53%, steel maker POSCO rose 0.81%, oil stock SK rose 1.23%, S-Oil gained 0.64%, telecom stock KT moved up 1.66%, Asiana Air Line added 0.67%, Koran Air Line added 1.66%, LG Display LCD moved up 1.29%, banker Woori Finance gained 2.70% and Korea Exchange Bank surged up 6.39%.
Technology stock Hynix Semiconductor moved down 1.07% and LG Electronics ended down 0.49%, weighed down by stronger won. Automaker Hyundai Motor declined 1.65% and Ssangyong Motor closed down 0.99%, but Kia Motors rose 1.80%.
Among Shipbuilders, while Daewoo Shipbuilding gained 3.64%, Hyundai Heavy slipped 0.4% and Samsung Heavy Industries fell 1.44%. Telecom stock SK Telecom closed down 0.82% and KB Financial, the holding firm of Kookmin Bank fell 1.62%
The New Zealand market recouped its early loss to finish modestly higher. The benchmark NZX-50 index closed at 2,873, up 18 points or 0.64% over the previous close. Turnover was worth $107 million and advancers outnumbered decliners by 49 to 37.
NZX rose 0.13% after announcing the potential acquisition of NSX, a small exchange in Australia. The company is looking to raise up to $20.55 million through a rights issue to fund its new acquisitions.
Market heavyweight Telecom fell 3.55% on reporting a 40% fall in its net profit for the nine months ended March. Energy stock Vector ended down 0.45%, resin maker Nuplex fell 2.50% and Freightways closed down 0.95%.
Ratailer Warehouse Group added 2.67% even as its third-quarter sales for the three months ended April 26 fell 2.8% to NZ$383.5 million ($227 million) from NZ$394.6 million a year earlier. Pumpkin Patch rose 1.53% and jeweler Michael Hill advanced 3.23%, but Hallenstein Glasson fell 2.17
AMP NZ Office Trust gained 2.63% after plunging 8.4% on Thursday on concerns about dilution in the value of investor holdings. Pike River Coal surged up 12.09%, Sanford rose 2.70% and Fisher & Paykel Healthcare moved up 1.58%.
Among top stocks, Contact Energy gained 2.13%, Fletcher Building rose 2.63%, Sky City rallied 3.75%, Steel and Tube closed up 1.72% and TrustPower advanced 2.74%.
Brewer Lion Nathan was in a trading halt after the company expressed concerns about the confidentiality of takeover talks with Japan's Kirin Holdings.
Among the other markets in the region, China's Shanghai Composite index rose 1.09%, Hong Kong's Hang Seng index closed up 1% and Taiwan's TWII Weighed index ended up 0.17%, but Singapore's STI Straits Times index moved down 0.15%. India's BSE Sensex was last trading at 11,845, down 272 points or 2.25% over the previous close.
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