Wednesday, Asian markets opened on a bright note but could not sustain their initial gains. The major markets across the Asia-Pacific region closed mixed as cautious undertone prevailed despite positive comments from the U.S. Treasury Secretary Timothy Geithner about the health of the US financial system. Investors also expressed caution after the IMF said losses tied to distressed loans and securitized assets could reach $4.1 trillion worldwide by the end of 2010.
Crude oil for June delivery was last trading little unchanged at near $48.66 a barrel in Asian trading. Crude oil for May delivery rose 63 cents to settle at $46.51 a barrel on its expiration day in New York trading on Tuesday, aided by gains on Wall Street. The rise of the euro against the dollar and comments from Iran's OPEC governor that the producer group may decide to further cut its output in its next meeting if the market remains oversupplied, also added some support.
Stocks on Wall Street showed a strong upward move over the course of the trading day on Tuesday, partly offsetting the steep losses posted in the previous session. While stocks saw initial weakness on disappointing earnings news, reassuring comments from Treasury Secretary Geithner drove the markets higher.
Geithner assured the Congressional Oversight Panel that there is enough money left in the government's $700 billion financial rescue program to stabilize the financial system. Geithner said there is at least $134.4 billion in funds left. Indicators on interbank lending, corporate issuance and credit spreads generally suggest improvements in confidence in the stability of the system and some thawing in credit markets, Geithner said. The Dow Jones Industrial Average advanced 1.63%, the Nasdaq Composite rose 2.22% and the S&P 500 index moved up 2.13%.
The Japanese market closed mixed ahead of earnings announcements from top blue-chip companies later in the week. While the Nikkei 225 index rose 16 points or 0.18% to 8,727, the broader Topix index of all First Section issues on the Tokyo Stock Exchange closed at 830, down 1 point or 0.09%. Securities, sea transport and electrical machinery stocks led the gainers, but stocks in the consumer finance, warehouse and construction sectors ended in the red.
Honda Motor shed 0.55% amid reports that its operating profit will decline 84 percent to 150 billion yen ($1.5 billion) for the year ended March. However, Suzuki Motor rose 2.16%, Toyota gained 1.08% and Nissan added 1.60%. Hino Motors tumbled 4.80% after reporting a wider-than-expected 61.8 billion yen loss for the year ended March.
Household products maker Kao Corp. fell 3.76% after Goldman Sachs Group reduced the rating on the stock to neutral from buy. Mitsui Chemicals tumbled 4.80% after it widened its net loss estimate for the past financial year ended March to 95 billion yen, worse than its 13 billion yen loss forecast.
Toshiba Corp. soared 9.57% after its joint venture partner SanDisk Corp. the biggest maker of flash-memory cards, reported revenue that topped analysts' estimates in the first quarter. Pioneer Corp. climbed 17.19% on reports that the government is considering investing about 300 million dollars into the ailing electronics maker.
Brokerages closed stronger. T&D Holdings advanced 3.45%, Nomura Holdings rose 3.46% and Daiwa Securities Group gained 2.24%, while Shinko Securities closed flat. Among insurers, Sompo Japan Insurance moved down 0.71%, but Mitsui Sumitomo Insurance closed flat.
In economic news, Japan saw a merchandise trade surplus of 11 billion yen in March, the Ministry of Finance said on Wednesday - beating analyst expectations for a 10 billion yen surplus following the revised 82.1 billion yen surplus in February.
Imports were down 36.7 percent year-over-year versus expectations for a 37.3 percent fall after the 43 percent contraction in the previous month. Exports dropped 45.6 percent year-over-year versus the 46.6 percent decline that had been forecast following the 49.4 percent decline a month earlier.
The Australian market showed a modest loss, as losses among gold miners and mining giant BHP Billiton more than offset gains in the financial sector. The benchmark S&P/ASX200 closed at 3,668, down 9 points or 0.25% and the All Ordinaries index fell 6 points or 0.16% to 3,627.
Commonwealth Bank of Australia rose 1.70% after it signed a 10-year contract worth A$100 million a year with Telstra Corp. Telstra also gained 1.88%.
Westpac Banking rose 1.27% and Macquarie Group added 2.12%, but National Australia Bank moved down 0.28% and ANZ slipped 0.12%,
BHP Billiton fell 0.22% after reporting a slump in iron ore and base metals output in the March quarter against a backdrop of weak demand and challenging market conditions. However, rival miner Rio Tinto rose 1.32% and Illuka Resources rose nearly 3%.
Australia's biggest gold miner Newcrest Mining fell 2.41%, Lihir Gold declined 1.05% and Newmont Mining moved down 2.5%, as spot gold in Sydney moved down to $US883.70 an ounce from $US889.20 on Tuesday.
Fortescue Metals Group has terminated contracts for the supply of bio-diesel to its Cloudbreak iron ore mine in Western Australia. The stock closed up nearly 2%.
Aristocrat Leisure plunged 12.81% after completing a $200 million capital raising with institutional investors.
AXA Asia Pacific rallied 4.15% on reports that it would slash up to 120 full-time staff to cut costs. The fund management and insurance group said sales continued to slow in the first quarter of 2009 but its capital position was strong.
Woodside Petroleum gained 0.35% after crude oil price rose on Tuesday. However, Oil Serach fell 1.16% and Santos moved down 1.98%. Among retailers, Woolworths fell 1.53%, but Harvey Norman Holding rose 1.78% and David Jones advanced 2.72%.
In economic news, the upcoming budget of the Australian government will focus on stimulating the economy and protecting jobs, Treasurer Wayne Swan said Wednesday. The government is due to unveil its budget on May 12.
The South Korean market rose for the third straight day as improving corporate earnings encouraged foreign and retail investors pick up stocks amid attractive valuations. The benchmark KOSPI rose 19 points or 1.4% to 1,356, the highest closing since Oct. 14. Volume was at 717.59 million shares worth 8.43 trillion won (US$6.3 billion) and advancers outnumbered decliners by 613 to 257.
Chipmaker Hynix Semiconductor surged up 14.83% on reports that Japanese chip maker Elpida will raise memory chip prices by as much as 50 percent. LG Electronics added 3.77% after it forecast sales in the second quarter would rise 10 percent from the first quarter.
Among auto stocks, Ssangyong Motor closed flat, but Hyundai Motor gained 2.33% and Kia Motors rallied 5.84% ahead of its earnings announcement later this week.
Shipbuilders retreated on profit taking. While Daewoo Shipbuilding lost 2.07%, Samsung Heavy Industries declined 1.73% and Hyundai Heavy slipped 0.24%
Banking stocks closed mostly stronger following gains among their US peers overnight. Woori Finance rose 0.32% and KB Financial, the holding firm of Kookmin Bank gained 1.21%, but Korea Exchange Bank moved down 0.68%.
Among other notable stocks, market heavyweight Samsung Electronics advanced 3.05%. LG Display LCD rallied 4.36%, Asiana Air Line moved up 3.02% and Korean Air Line ended up 2.86%, but steel maker POSCO slipped 0.37%, oil stock SK declined 1.65%, and telecom stock KT drifted down 2.66%
The New Zealand share market closed almost flat amid a mixed trend in the other Asian markets. Comments by Finance Minister Bill English that the New Zealand Government's books were in worse shape than the Treasury's downside forecasts in December also kept underlying mood cautious. The benchmark NZX-50 closed at 2,663, down 2 points or 0.07%. Turnover was worth $78.4 million and decliners outnumbered advances by 30 to 29.
Sky City pared its early gains, losing 2.11% after it has announced the completion of an NZ$185.3 million underwritten institutional placement at an 8.4% discount to its last trading price.
Fletcher Building closed down 0.16% even as it won a $1.7 million Auckland District Court judgment against one of the country's most influential developers over the $100 million Wellington Holiday Inn.
Among notable decliners, Telecom slipped 0.39%, Pumpkin Patch fell 2.54%, retailer Hallenstein Glasson drifted down 0.42%, Jeweler Michael Hill tumbled 3.51%, energy stock TrustPower declined 0.70%, Nuplex slumped 5.26% and Steel and Tube moved down 1.92%
However, Freightways gained 1.13%, Infratil rose 1.30%, Contact Energy moved up 1.06% and Warehouse Group rose 0.87%. Pike River Coal advanced 2.56% after the company said $41 million rights issue has closed fully subscribed.
ING Medical Properties Trust closed flat on announcing its third-quarter cash distribution to unit holders of 2.125 cents per unit. Energy stock Vector and Fisher & Paykel Appliances also closed flat.
On the economic front, a survey by the New Zealand Business Council for Sustainable Development revealed that one third of New Zealanders want a decrease in government spending even if it results in a rise in short term unemployment.
The report showed that about 33% of the total 2,577 persons surveyed prefer a cut in government spending, even if it reduces private spending and raises unemployment in the short run. At the same time, 17% are in favor of an increase in government spending. Meanwhile, cutting taxes was the least favored option, with only 9% favoring it.
Among the other markets in the region, China's Shanghai Composite index fell 2.94%, Hong Kong's Hang Seng index moved down 2.67% and Singapore's STI Straits Times index closed down 2.32%, but Taiwan's TWII Weighed index moved up 0.08%
After opening higher, the Indian market pared its early gains and was trading in negative terrain with oil & gas, metals and capital goods stocks shedding the most amid mixed global cues. The benchmark BSE Sensex was last trading at 10,801, down 97 points or 0.89% over the previous close.
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