Asian markets ends mixed

Nikkei, Seoul, Sydney extend gains while Shanghai, Sensex, Hang Seng ended in negative territory

Stock markets in Asian region vessel a retreat tune on Thursday, 16 April 2009. After opening the strongly higher in early trading on positive cues from Wall Street, the markets retreated after a government report revealed that the Chinese economy expanded at a slower pace of 6.1% during the first quarter. While markets in Japan, Australia, South Korea and Taiwan managed to end in positive territory, the markets in China, Hong Kong, and Singapore reversed the early gains and ended in negative territory.

On Wall Street, the stock markets ended the day with gains despite a couple of worse than expected earning reports, stocks managed to make good gains. The Nasdaq was in the red despite a steady earnings report from Intel. The Dow had managed to stay in the green, perhaps due to a stronger than expected housing report. After starting the day 23 points up earlier during the day, The Dow Jones Industrial Average ended higher by 109 points at 8,029. The Nasdaq Composite Index, ended higher by 1 point at 1,626. S&P 500 ended higher by 10.5 points at 852.

In the commodity market, crude oil rose for the first time in a week as equities in the U.S., the world's biggest oil user, rallied and the Federal Reserve said some of the country's biggest regional economies slowed the pace of their decline. Crude oil gained as much as 1.2 percent after stocks climbed in the last hour of trading yesterday. Fed districts reporting a slower economic decline or signs of stabilization include San Francisco, the largest district, New York, Chicago, Kansas City and Dallas, the Fed said in its Beige Book business survey.

Crude oil for May delivery climbed as much as $1.05, or 2.1%, to $50.30 a barrel on the New York Mercantile Exchange. It was at $49.74 a barrel at 11:55 a.m. London time. Prices are up 11% so far this year. Yesterday, crude oil fell 16 cents, or 0.3%, to $49.25 a barrel, the lowest settlement on the Nymex since April 7, after a government report showed that U.S. stockpiles climbed to the highest level in almost 19 years as demand dropped.

Brent crude oil for June settlement rose as much as 94 cents, or 1.8%, to $53.38 a barrel on London's ICE Futures Europe exchange. It was at $52.92 a barrel at 11:44 a.m. London time.

Gold traded little changed in Asia as a rally in global equities resumed, eroding demand for the precious metal as a store of value. Gold for immediate delivery was little changed at $890.50 an ounce at 11:25 a.m. London time.

In the currency market, the US dollar and yen are a touch softer in early Asian session but strike back after release of China GDP report, which showed GDP expanded 6.1% year on year in Q1, was the slowest growth rate in almost 10 years. Overall outlook in financial markets are still quite mixed.

The Japanese yen that weakened against its major counterparts on Thursday. The Japanese currency slipped to 99.14 against the US dollar.

The Hong Kong dollar was trading at HK$ 7.7502 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In Sydney trades, the Australian dollar closed stronger on Thursday, though its gains were restrained by weak Chinese growth data.

Towards its closing, the Australian dollar was trading at 72.34/36 US cents, up down from Wednesday's close of 71.75/78 US cents. During the morning, the unit traded between 73.15 US cents and 72.30 US cents.

In Wellington trades, the NZ dollar fell to a week-low around US57.35c early recovered and then tested support around US57.50c. It ended the day at US57.55c from US57.80c yesterday.

The South Koran ended at 1,338 won to the dollar, down 14.5 won from Tuesday's close, as overseas investors cut holdings of local shares.

The Taiwan dollar weakened slightly against the US dollar as it was trading at NT$ 33.800, down by NT$ 0.010 from Wednesday's close of NT$33.790.

Coming back in equities, in Japan, stock market morning gains to finish the session in a diverse note, off a three month high as investors booked profit after China's economic growth came out weaker than expected. Investors were attracted to mainly China-related stocks in the morning on hopes of the Beijing economic growth, but Japan's indices gave up most of their early gains after Beijing reported a contraction in economic activity during first quarter of 2009.

The Nikkei 225 Stock Average index rose 12.3 points, or 0.1%, to 8,755.26, while the broader Topix was 3.21 points, or 0.4%, lower to 832.

In Mainland China, the stock index finished the choppy session marginal lower, after Beijing reported a contraction in economic activity during first quarter of 2009. Financial and property sectors were mixed as investors booked profit after economic data shoed contraction in economic activity during first quarter of 2009. Power producers plunged on lower electricity output. Energy sector dropped on poor economic news rekindled concern over demand and corporate earning.

The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, fell 0.08%, or 1.92 points to 2,534.13. The Shenzhen Component Index was down 0.14%, or 13.23 points to close at 9,711.36.

On the economic front, the National Bureau of Statistics said China's gross domestic product expanded 6.1% in the first quarter of 2009, following the 6.8% gain in the previous quarter.

The Consumer prices in China eased 1.2% on year in March after the 1.6% annual falls in February. On month, inflation was down 0.3% due to weak domestic demand and falling commodity prices.

For the first quarter of 2009, inflation was down 0.6% on year following a 5.9% increase for all of 2008. Also, producer prices fell an annual 4.6% in the first quarter.

The NBS also said Industrial production in China was up 5.1% on year through the first three months of 2009, following a 12.9% jump in all of 2008. In March, industrial production added 8.3%, following the 11% jump in February.

The NBS said that urban fixed asset investment was up 28.6% on year in the first quarter and 30.3% in March. Retail sales were up 15% in the first quarter and 14.7% in March.

In Hong Kong, the stock market finished the volatile session slightly lower, snapping three day's of winning streak after alternate bouts of buying and profit taking, as growing optimism that stimulus efforts and record-low interest rates overshadowed by Beijing economic data which showed contraction in economic activity during first quarter of 2009.

The Hang Seng Index retracted 86.63 points, or 0.55%, to 15,582.99, while the Hang Seng China Enterprise Index, which tracks H shares of Chinese companies, dropped 164.23 points, or 1.76% to 9,141.23.

In Australia, the share market close higher despite losing much of its gains after new figures showed that China's GDP slumped to its worst in nearly two decades. The regional market opened the day higher following gains on Wall Street that were spurred by a less gloomy report from the Federal Reserve on the state of the US economy. The benchmark S&P/ASX200 index was up 0.75%, or 28.2 points, at 3775.7 - after earlier trading over 3800 points. The broader All Ordinaries index was up 0.86%, or 31.7 points, at 3725.6.

In New Zealand, equity indices surged by more than 2%, for the first time in April 2009. The share market commenced trading strong after stocks on the Wall Street ended higher overnight. The rise came about despite a grim outlook on the domestic front as manufacturing continued to post a contraction which makes it apparent that investors confidence is based merely on the on goings in the worlds most developed regions. The benchmark NZX50 increased 2.40% or 62.491 points to close at 2663.137. The NZX 15 advanced 2.59% or 124.852 points to close at 4938.378.

On the economic front, New Zealand's manufacturing sector contracted for the 11th consecutive month in March as per the BNZ Capital – Business survey. The BNZ Capital - Business NZ Performance of Manufacturing Index (PMI) for March was 40.7, which was an improvement from 38.6 in February. A PMI reading below 50 indicates that activity is declining.

Moreover, as per an OECD report, rising healthcare costs pose the biggest threat to the long-term sustainability of the New Zealand economy. In its 2009 report on New Zealand the 30-member Organization for Economic Co-operation and Development paints a fairly downbeat picture of this country's immediate future.

In South Korea, stock markets fell as investor hopes for an economic recovery were dented by weak U.S. retail sales. The benchmark Korea Composite Stock Price Index (KOSPI) shed 9.54 points to close at 1,333.09, ending a four-session gaining streak.

In Singapore, the stock market gave up early gains to finish the session lower, after disappointing earnings and faltering first-quarter Chinese economic growth prompted investors to lock in profits. The blue chip Straits Times Index fell 14.24 points, or 0.75%, to 1,891.75, with losers led gainers 314 to 298.

In Taiwan, stock market resumed its upward rally, attaining a new six and month high by traversing the 6000- level during the intraday movement, as financial stocks like Cathay Financial rallied ahead of the potential signing of a financial cooperation with China later in 2009.

The main Taiex share index regained its upward rally, nearing the closing level of 6000 – points, attaining a new six and half months high stature. Taiex leapt 121.98 points or 2.08%, closing the day at 5997.17, the highest closing since 25 September 2008 when market closed the day at 6060.83.

On the economic front, Taiwan's consumer price index (CPI) fell modestly an annual 0.15% in March for the second consecutive monthly fall. According to the Cabinet-level Directorate General of Budget, Accounting & Statistics (DGBAS) the drop was mainly due to declining prices of garments, entertainment, and travel, with food prices inching up a little.

During the month, the prices of storage memory cards, mobile phones, gasoline, and bus tickets all plummeted 20% while those of digital cameras, TVs, notebook PCs and CDs all fell over 10%.

Directorate General of Budget, Accounting & Statistics officials indicated that, after seasonal adjustment, the annual growth of the CPI posted a negative 0.01%, emphasizing that the global economy is under deflationary pressure, with Taiwan also being influenced.

March also saw the wholesale price index (WPI) dropping obviously for the fifth consecutive monthly fall of 9.2%. Based on the greenback, the prices of imports and exports sharply declined by 21.05% and 14.98%, respectively. For instance, the price of building materials fell by 8.7%, the largest fall of its kind since 1991, which is believed caused by the sluggish real estate market.

In India, a much-awaited correction materialized with the BSE Sensex falling below the 11000 mark. Realty shares, which held gains for most part of the day, crumbled like pack of cards in the last one hour of trade.

The BSE 30-share Sensex was down 337.33 points or 2.99% to 10,947.40. At the day's high of 11,367.23, the Sensex rose 82.5 points at the onset of trading session, its highest level since 14 October 2008. The S&P CNX Nifty was down 114.65 points or 3.29% at 3369.50.

Elsewhere, Malaysia's Kula Lumpur Composite index was up 0.5% or 4.60 points to 961.28 while Indonesia's Jakarta composite index jumped by 2 or 31.42 points ending the day at 1625.09.

In other regional market, European shares rose modestly on Thursday, helped by gains in the banking sector, as investors also eyed a mixed bag of corporate updates from companies such as Roche and Danone. On a regional level, the U.K. FTSE 100 index rose 0.4% to 3,985.47, the German DAX 30 index climbed 0.1% to 4,555.48 and the French CAC-40 index advanced 0.4% to 2,996.58.