Asian markets opened the new trading session mixed, following the declines seen during the U.S. trading hours. The main news items that affected the equity markets over the last few sessions were Goldman’s quarterly earnings and the huge slowdown experienced in Singapore.
Goldman Sachs, one of the largest U.S. banks, announced a $3.39 per share profit, beating most analysts’ forecasts. The losses on mortgage loans continued to haunt Goldman’s balance sheet, however the declines were offset by the $6.65 billion made by the fixed-income trading team.
The better than expected results were quickly overshadowed by the fact that the former investment bank plans to raise as much as $5 billion to repay the U.S. rescue funds. “Goldman profits show that the banking industry was fine in the first few months of the year, but probably the quarterly reports were re-painted by the new accounting rules,” Thelfb-Forex.com Trade Team said. “This will have a positive effect on the equity markets on the medium to long term, but right now the market is focusing on the $5 billion right issue, which will drive price down on the short term” they added.
A different report showed tonight that Singapore’s economy contracted 19.7% in the first quarter, in annualized term. The contraction experienced by the island-economy is huge, and is much worse than forecasted. “The GDP data is even grimmer, if we take into account Q4 of 2008, when the economy contracted 16.4%, also in annualized term,” Thelfb-Forex.com Trade Team said. It is worth noting that Singapore is one of most developed economies in the world, when related to the size of the country and its population, having the world’s fourth highest GDP per capita ratio.
Overnight, the Nikkei fell 148.22 points (1.66%) to 8,776.21. The Australian S&P/Asx gained 84.30 points (2.30%) to 3,755.90.
Crude oil for May delivery was recently trading at $49.80 per barrel, down by $0.30.
Gold for May delivery was recently trading down by $0.50 to $895.30.