Thursday, stock markets across the Asia-Pacific region closed notably higher on bargain hunting amid hopes that growth will return sooner in many non-developed economies. However, cautious undertone prevailed about the health of the U.S. financial industry. The global economy will probably shrink by 1.3% in 2009, the deepest slump since 1945, the International Monetary Fund predicted.

Crude oil rose to above $49 a barrel in late Asian trading as better-than-expected results from Credit Suisse brightened the outlook for the financial sector. In New York trading on Wednesday, crude oil reversed its early declines and settled moderately higher at $48.85 a barrel, as gains in the stock market and positive forecast given by several corporate executives more than offset rising inventories in the United States. U.S. crude stockpiles jumped by 3.9 million barrels last week, above analysts' expectations, to hit a fresh 19-year high, according to the U.S. Energy Information Administration

Overnight, the US markets closed mostly lower amid mixed corporate earnings from blue-chip companies. While AT&T, McDonald's and Yahoo! beat earnings estimates, there were at least a couple of disappointing report cards as well with Boeing and Morgan Stanley reeling out numbers that fell short of expectations. After experiencing considerable volatility over the course of the trading day, the major averages pulled back sharply going into the close, partly due to significant weakness that reemerged in the banking sector. The Dow Jones Industrial Average fell 1.04% and the S&P 500index declined 0.77%, but the Nasdaq managed to hold onto a modest gain, closing up 0.14%.

In economic news, the US Treasury Secretary Timothy Geithner hinted that policymakers might be forced to alter their recovery strategies as the global financial crisis drags on. He explained that the revised estimate from the International Monetary Fund for global growth could spark a change in policy. The IMF lowered its 2009 outlook, now predicating a contraction of 1.3 percent for the year compared to its previous estimate of 0.5 percent growth. We may have to adapt our policies further as conditions evolve, and we need to make sure we provide a scale of support that matches the intensity of the challenge, Geithner said.

The Japanese market rallied on bargain hunting after Goldman Sachs Group Inc. Goldman Sachs upgraded its ratings on key automakers to attractive from cautious. Construction and consumer finance stocks also closed with significant gains, but stocks in the oil and coal, insurance and sea transport sectors ended in the red.

The Nikkei 225 index closed at 8,847, up 120 points or 1.37% and the broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 10 points or 1.15% to 839.

Banking stocks closed mixed. Mitsubishi UFJ Financial Group closed down 0.21% and Mizuho Financial Group declined 1.03%, while Resona Holdings rose 0.60% and Sumitomo Mitsui Financial Group closed flat. Mizuho Financial Group is likely to report an annual net loss of more than $5 billion, hit by a surge in bad-loan costs, media reports suggest.

Japan's largest brokerage house Nomura Holdings came under intense selling in early trading, but it managed to close unchanged. Daiwa Securities Group rallied 3.59% and Shinko Securities surged up 9.32%, but T&D Holdings fell 2.98%.

Pioneer Corp climbed 23.29% on reports that Honda Motor will take an equity stake in the struggling audio-visual electronics firm. Trading house Mitsui & Co. fell 1.80% after the company revised downwards its net profit forecast for the financial year ended March 31, 2009.

Among automakers, Honda closed up 0.18%, Suzuki gained 0.79%, Toyota advanced 3.46%, Nissan added 2.17% and Mazda surged up 5.39%.

Canon advanced 3.12% on hopes of better earnings amid reports that it may lift its annual forecast by nearly 13 percent. Among high technology stocks, Advantest rose 0.52%, Kyocera moved up 1.65%, Fujitsu ended up 1.19% and Sony rose 1.21%, but Tokyo Electron fell 1.14%.

The Australian market ended sharply higher for the day, led by miners and financials. The benchmark S&P/ASX200 closed at 3,743, up 2% or 75 points and the broader All Ordinaries index rose nearly 69 points or 2% to 3,696.

Miners ended stronger on potential gains expected from a recovery in the Chinese economy. BHP Billiton gained 3.14%, its rival Rio Tinto surged up 6.06% and Iluka Resources added 1.57%.

Banking stocks rallied due to the expiry of option contracts on Thursday. While National Australia Bank and ANZ rallied over 4% each, Commonwealth Bank gained 1.37%, Westpac Banking added 2.55% and investment bank Macquarie Bank surged up nearly 7%. Among insurers, AMP closed up 0.19% and QBE rose 1.24%, but AXA Asia Pacific fell 3.48%.

Gold miners also ended stronger as gold traded steady at $US891.04 an ounce. Newmont ended up 1.3%, Lihir Gold added 1.76% and Newcrest Mining, which released its quarterly production results on Thursday, rose 1.73%.

In the petroleum and oil sector, Origin Energy advanced 1.03%, Woodside Petroleum rose 1.48% and Santos rallied nearly 4% after the company reiterated its full-year production and cost guidance. However, Oil Search declined 1.76% and AGL Energy moved down 0.67%.

Qantas Airways rose 1.03% and Virgin Blue Holdings, which has struck an agreement with the US plane manufacturer to defer the delivery of V Australia's fifth and sixth B777-300ER aircraft, closed up 1.72%.

Retailers closed mixed. Woolworths rose 2.88% and Harvey Norman Holding closed up 0.35%, but David Jones fell nearly 2%.

Lion Nathan was in a trading halt after the company received a preliminary, non-binding and conditional proposal from top shareholder Japan's Kirin Holdings to buy out the balance of 53.9 percent stake in the company.

Among other notable gainers, Fortescue Metals gained 1.9%, OZ Minerals advanced 1.61% and Wesfarmers extended gains, rising 3.32%. Coca-Cola Amatil soared 5.50% and Foster's Group jumped 7.22% on speculation that it may receive a buy-out offer.

James Hardie Industries tumbled 5.16% on revelation that the company's board breached their duties by making misleading statements about the company's ability to pay asbestos compensation.

In economic news, Australian Treasurer Wayne Swan described the International Monetary Fund's forecast for his country as bleak and said a recession is inevitable. According to IMF's world economic outlook released Wednesday, Australia's gross domestic product will fall 1.4% in 2009, before rising 0.6% in 2010. That was more than a 1.3% contraction predicted for the world economy for this year.

The South Korean market rose modestly for the fourth day in a row as improved earnings outlook and hopes that government measures will spur demand buoyed sentiment The benchmark KOSPI rose 13 points or 0.94% to 1,369, rising for the fourth day in a row. Volume was at 736.48 million shares worth 8.74 trillion won (US$6.5 billion) and advancers outnumbered decliners by 420 to 394.

Hyundai Motor posted a smaller-than-expected 43% decline in its first-quarter net profit. Hyundai Motor closed up 3.18%, Kia Motors advanced 5.42% and Ssangyong Motor rallied 5.56%.

Shipbuilders closed mixed. Daewoo Shipbuilding rose 2.53% and Hyundai Heavy gained 3.29%, but Samsung Heavy Industries closed down 0.16%.

Among other notable stocks, market heavyweight Samsung Electronics added 2.96%, Korean Air Line advanced 1.45%, LG Display LCD moved up 1.79% and LG Electronics closed up 0.91%, while oil stock SK and telecom stock SK Telecom ended flat.

Hynix Semiconductor tumbled 4.80% after leading shareholders of the company agreed to inject 1.3 trillion won in new funding through issue of fresh shares and loans for the loss-making chipmaker.

Banking stocks closed weaker. Korea Exchange Bank tumbled 3.28%, Woori Finance fell 3.04% and KB Financial, the holding firm of Kookmin Bank closed down 0.79%. Steel maker POSCO, oil stock S-Oil, energy stock KEPCO, telecom stock KT and Asiana Air Line also ended in negative terrain.

The New Zealand market finished lower as investors expressed caution amid weakness in the U.S. markets on nagging worries about the global financial system. The NZX- 50 finished the day lower by 4 points or 0.15%. Decliners outnumbered advancers by 46 to 24.

Fletcher Building fell 2.07%, as investors sold off a part of their stock holdings to subscribe for shares on a rights basis. Sky City declined 1.08% after successfully raising $185.3 million in an institutional placement.

Among other notable decliners, medical equipment maker Fisher & Paykel Healthcare ended down 1.32%, Auckland International Airport fell 1.18%, energy stock TrustPower fell 0.56%, Vector declined 1.82% Contact Energy shed 1.75% and Freightways ended down 0.75%.

Among retailers, jeweler Michael Hill drifted down 1.82%, Warehouse Group declined 1.15%, and Hallenstein Glasson moved down 0.84%,

Nuplex plunged 8.33% after the company issued 577.6 million shares provided through a renounceable rights issue to existing shareholders. Other top stocks Sky City fell 1.08% and Steel ad Tube moved down 1.96%.

Fisher & Paykel Appliances jumped 4.55% after the company reaffirmed that it continues to discuss refinancing arrangements with its banks. Among the other major gainers, top stock Telecom rose 3.54%, Pumpkin Patch up closed up 0.87%, Australia and New Zealand Bank rallied 3.61% and Infratil ended up 0.64%.

On the economic front, profitability of New Zealand banks is set to slide this year as bad debts rise and house prices fall, KPMG said in its annual survey of the sector.

While the major banks' earnings for the six months to March would prove to be relatively strong, these earnings will not be sustained and impaired asset expense is likely to increase in the next few quarters, it said.

Among the other markets in the region, China's Shanghai Composite index rose 0.11%, Hong Kong's Hang Seng index gained 2.26% and Singapore's STI Straits Times index closed up 0.90%, but Taiwan's TWII Weighed index moved down 0.18%.

After trading choppily in early trading, the Indian market saw a sharp comeback on buying across the board in index heavyweights. The benchmark Sensex was last trading at the day's high of 11,125, up 307 points or 2.84% over the previous close.

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