Tuesday, April 14, 2009

Asian Shares End Mostly Higher, Banks Climb, Singapore Shrinks

. Tuesday, April 14, 2009

By stockOzone team

Most Asian markets ended higher Tuesday, with the financial sector leading the advance as trading resumed in Hong Kong and Australia after recent holidays, but Japan ended slightly lower as profit-taking hit auto makers.

Financial stocks outperformed across the region after Goldman Sachs reported better-than-expected quarterly results.

Japan's Nikkei 225 Average ended down 0.9% at 8842.68 after opening higher, though losses were tempered by expectations of improved earnings from the U.S. financial sector.

"The key is the U.S. market, which seems to be holding up, and Japan and other Asian markets are following," said Yoji Takeda, head of Asian equities at RBC Investment. "It's not a selloff or the end of a rally...it's a healthy correction."

Hong Kong shares soared to catch up with recent gains in the U.S. and Shanghai markets as trading resumed after holidays on Friday and Monday, lifting the Hang Seng Index up 4.6% to 15580.16. Similarly, Australia's S&P/ASX 200 gained 2.2% and New Zealand's NZX 50 added 1.1%.

Elsewhere, South Korea's Kospi advanced 0.3%, Taiwan's Taiex rose 0.6% and China's Shanghai Composite finished up 0.5%, taking gains into a fourth straight session. Thai and Indian markets were shut for holidays.

In the banking sector, National Australia Bank ended up 2.8%, Industrial Bank of Korea gained 1.6% in Seoul, Chinatrust Financial Holding added 4.4% in Taipei and United Overseas Bank recently climbed 0.6% in Singapore.

Shares of Chinese banks surged, buoyed by recent data which showed a strong growth in bank lending. Bank of Communications rose 5.4% and Bank of China added 4.6% in Hong Kong. The banks climbed 1% and 0.3%, respectively, in Shanghai.

HSBC Holdings rallied 9.3% in Hong Kong, helped by a plan to put up for sale office buildings in New York and Paris as well as its London headquarters.

Goldman Sachs slipped 2.3% after-hours in the U.S., though the stock had marked a 4.7% regular session rise. Its fiscal first-quarter net income rose 20% as it recovered from its first quarterly loss since going public a decade ago in the prior quarter; the bank said it would sell $5 billion of common shares to raise money to repay government capital.

"Clearly, there is an air of positiveness. The market is thinking that for financial stocks maybe the worst is over," said Michael Heffernan, a senior client adviser at Austock Brokers in Melbourne.

U.S. stock futures were lower recently in screen trade, with Dow Jones Industrial Average futures down 18 points.

Investors are awaiting a slew of earnings reports from other big U.S. banks this week, with U.S. retail sales data on the slate later.

"The retail sales data represent a test of the hypothesis that the consumer, which led the economic collapse in the fourth quarter of 2008, also is leading the recovery," said ING's Tim Condon.

There was also a reminder the difficult economic environment: Singapore's advance estimate of first-quarter gross domestic product showed a contraction of 19.7% on a seasonally adjusted and annualized basis from the previous quarter, much worse than expected by economists. Year-to-year, GDP fell 11.5%, the fastest drop since the government began compiling comparable data in 1976, versus the 8.6% decline tipped. Singapore's Straits Times Index was recently up 1.1%.

In Tokyo, automobile shares fell as investors locked in profits. Toyota Motor fell 3.6% and Nissan Motor tumbled 6.3%. In spite of the day's loss, both stocks are up at least 30% in the year to date.

Qantas shares slumped in early trading after it slashed its full year earnings forecast and said it would make further cuts in capacity, expenditure and jobs, but recovered in the buoyant Sydney market toward the close. The Australian airline said it now expects profit before tax for the year to June 30 of between 100 million Australian dollars (US$72 million) and A$200 million, from its previous forecast of around A$500 million. The stock ended up 2% in spite of ratings downgrades from Standard & Poor's.

Sellers came into technology and automotive stocks in Korea after recent gains, with Samsung Electronics off 1.4%.

"The biggest risk for Korean stocks is the steep climb in a short time," said Kim Seong-bong, at Samsung Securities.

Philippine shares fell 0.3%, and Malaysia's main index ended up 1.3% at a new 2009 high while Indonesian shares gained 1.9%.

In currency markets the dollar was recently at 99.68 yen, from 100.04 yen late in New York and an early high of 100.43 yen, while the euro was at 132.37 yen, from 133.83 yen. The euro was at $1.3275, from $1.3376.

The Singapore dollar rose after the Monetary Authority of Singapore said it was recentering its undisclosed nominal effective exchange rate, or NEER, band for the currency. Recently, the U.S. dollar was at S$1.5015, down from S$1.5140 before the MAS announcement.

Spot gold was pushed up $3.10 from New York levels, to $895.70 a troy ounce. Front-month Nymex crude was down 53 cents at $49.52 a barrel on Globex.

Disclosure: Author does not own any of the stocks discussed here.

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