Asian markets enters April with advance

Nikkei joins Shanghai, Sensex as gainer of the day while Sydney, New Zealand plummet deeper into the negative zone

Stock market in Asian region closed mostly higher on Wednesday, 1 April 2009, as auto related stocks advanced on speculation that US President Obama believes a quick, negotiated bankruptcy is the most possible way for GM to restructure. Meanwhile, Obama is also prepared to let Chrysler go bankrupt if it fails to form an alliance with Fiat SpA. Expectations from the G20 meeting and worries over deteriorating economic conditions weighed in Australian and Hong Kong markets dragged them into red.

On Wall Street, after two sessions of extensive sell-off, US stocks rallied yesterday, registering the first monthly gain since August 2008. After starting the day 51 points up earlier during the day, The Dow Jones Industrial Average ended higher by 87 points at 7,608. The Nasdaq Composite Index, ended higher by 27 points at 1,528. S&P 500 ended higher by 10 points at 797. For the month just ended, the Dow rose 7.7%, the S&P added 8.5%, and the Nasdaq gained 10.9%. For the year, they are still off by 13.3%, 11.7%, and 3.1%, respectively.

In the commodity market, crude oil fell below $49 a barrel, after capping its biggest monthly gain since May, on speculation that a government report today will show U.S. inventories rose from the highest level in more than 15 years as fuel demand slows.

Crude oil for May delivery fell as much as $1.38, or 2.8%, to $48.28 a barrel in electronic trading on the New York Mercantile Exchange. It was at $48.43 a barrel at 11:09 a.m. London time. Crude oil rose $1.25, or 2.6%, to $49.66 a barrel yesterday as equities gained and a weaker dollar enhanced the appeal of commodities. Crude gained 11% in the first quarter after tumbling 56% in the previous three months.

Brent crude oil for May settlement fell as much as $1.32, or 2.7%, to $47.91 a barrel on London’s ICE Futures Europe exchange. It was at $48.22 a barrel at 11:09 a.m. London time.

Gold gained for a second day on investors’ expectations that the dollar will weaken further and leaders gathering this week for Group of 20 meetings may not be able to pull the global economy out of recession.

Gold for immediate delivery gave up its yesterday’s gains as it was trading lower by NT$ 3.30 or 0.36% at $921.70 an ounce at 11:09 a.m. in London. The metal rose 4.2% in the quarter ended yesterday, the largest gain since the three months ended 31 March 2008.

In the currency market, after brief retreat, the greenback has regained momentum on talk of bankruptcy of GM and Chrysler.

The Japanese yen was quoted at 99.01 against the US dollar, depreciated from Tuesday’s quote of 97.96 yen.

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 higher despite selling off during the local trading session. At the local close, the dollar was trading at $US0.6877, up from Tuesday's close of $US0.6854. The Australian dollar traded above $US0.6900 during offshore trading on Tuesday, supported by a positive finish on US equity markets and some US dollar selling.

In Wellington trades, the New Zealand dollar wobbled against the United States dollar on car news today, but dropped more than a cent against the Uncle Sam when it couldn't avoid an unexpected Bollard. It was worth US55.74 cent at the closing today, more than a cent down from US56.82 cents at the closing yesterday. The real impact was Reserve Bank governor Alan Bollard's unusual move of commenting on his concern at recent rises in long-term wholesale interest rates.

The South Korean currency won finished at 1,379.5 won against the U.S. dollar, up 4 won from Tuesday's close, extending the gains for the second day.

The Taiwan dollar strengthened against the US dollar as it closed trading at NT$ 33.8350, up by NT$ 0.0820 from Tuesday’s close of NT$33.917.

Coming back in equities, in Japan, stock market finished the session sharply higher, with broad based gains across the board, bloated by a government plan to support equities overshadowed weak confidence among manufacturers. Automakers and financials led the market as weakening yen against major currencies and speculation of Japanese automakers market share will expand if U.S. automakers go bankrupt.

The Nikkei 225 Stock Average index spurted 242.38 points, or 3%, to 8,351.91, while the broader Topix was 20.16 points, or 2.6%, lower to 794.

On the economic front, the Bank of Japan’s closely monitored Tankan survey data showing that the confidence amongst Japan’s business leaders continued its precipitous descent in the first quarter of 2009, with most of the major indicators below forecast.

The large manufacturer’s index fell to -58 in 2009’s first quarter, compared to the prior reading of –24 in quarter four. Meanwhile, the outlook amongst large manufacturers dropped sharply as well at –51, it was far below the previous quarter’s -36 reading.

The non-manufacturing index fell to -31 from the previous reading of -9 in quarter four. The outlook amongst non-manufacturing firms fell to -30 from a previous reading of -14.

The Tankan all-industries capex index, which measures capital expenditures by all Japanese industries apart from the financial sector, showed large manufacturers and non-manufacturers plan to decrease business investment by 6.6%.

The Natural Resources and Energy Agency said in a preliminary report that Japan’s crude oil imports in February fell 3.3% from a year earlier to 122.97 million barrels. Imports from the Middle East accounted for 89.3% of the total, up 2.6%age points from a year before for the fourth straight monthly expansion.

The results of the Tankan come a day after the Japanese prime minister instructed the government to draw up a third economic stimulus package, as financial data released on Tuesday indicated that the country is plunging into its worst recession in more than 50 years.

The Japan Mini Vehicle Association said Japanese sales of mini vehicles in March fell 13.8% from a year earlier to 223,035 units.

In Mainland China, the stock index finished the session higher, extending gains for second day in row, as investors’ enthusiasm for bargains hunting in recently battered shares on optimism the nation’s stimulus spending will help boost growth and an plenty supply of funds for short-term speculation in shares. The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, climbed up 34.80 points, or 1.5%, to 2,408.01. The Shenzhen Component Index on the smaller Shenzhen Stock Exchange put on 174.06 points, or 1.94%, to 9,156.01.

On the economic front, the CLSA China Purchasing Managers Index dropped to a seasonally adjusted 44.8 in March 2009 as compared 45.1 in February as collapsing global trade cut exports and growth across Asia.

The manufacturing index increased for a fourth month from a record low of 40.9 in November. An index of export orders rose to 41.4 in March from 39.5 in February. A measure of orders climbed to 43.6 from 44.2. Output gained to 44.3 from 43.9. An employment index rose to 47.1 from 46.6

In Hong Kong, the stock market finished the session somewhat lower, erasing positive opening as investors locked gains after Beijing economic data showed mixed signals in the China’s recovery and on a media report that President Barack Obama had determined a prepackaged bankruptcy was the best option for U.S. automakers General Motors and Chrysler.

The Hang Seng Index tumbled 56.48 points, or 0.42%, to 13,519.54, while the Hang Seng China Enterprise Index, which tracks H shares of Chinese companies, recovered 7.55 points, or 0.09% to 8,077.68.

In Australia, the stock market finished the session slightly lower after fluctuating in and out of the red, as losses in telecom, industrials, and retailers overshadowed gains in banks and property trusts on hopes an interest rate cut could boost their lending businesses and firmer energy and resources stocks on the back of gains in the commodity prices. The benchmark S&P/ASX200 index ending down less than 0.1%, or 2.4 points, at 3579.7, while the broader All Ordinaries index was off 0.1%, or 5.1 points, at 3527.2.

On the economic front, the Australian Bureau of Statistics said in a report that Australian retail trade at current prices fell 2% in February to a seasonally adjusted A$18.873 billion, from A$19.257 billion in January.

The ABS also said Australian residential housing approvals were up 7.8% on month in February at 10,050, but down 25.5% on year.

In New Zealand, the stock market commenced the new financial year in the negative territory amid the global slowdown. The share market started the day in the green patch following Reserve Bank Governor Alan Bollard's unusual step of issuing a statement expressing his concern at a recent rise in long-term wholesale interest rates. The benchmark NZX50 fell 0.82% or 21.152 points to close at 2569.24. However, the NZX 15 decreased 0.49% or 23.665 points to 4769.013.

On the economic front, according to the Westpac McDermott Miller employment confidence index, employment confidence has fallen to a historic low as gloom continues to stalk the job market. The index fell to 93.2 in the March 2009 quarter, the first time the confidence index has hit a sub-100 level since the survey began in 2004.

In South Korea, stocks closed higher, as investors scooped up carmakers and banks on hopes of an economic recovery. The benchmark Korea Composite Stock Price Index (KOSPI) rose 27.1 points to 1,233.36.

On the economic front, South Korea's consumer prices grew at a slower pace in March than in the previous month as the cost of oil products declined. According to the report by the National Statistical Office, the consumer price index rose 3.9% last month from a year earlier, slowing from a 4.1% on-year advance in the previous month. From February, consumer prices gained 0.7%.

In other economic news, South Korea's trade surplus reached a record US$4.6 billion in March mainly due to a sharp drop in imports and a surge in exports of ships. According to the Ministry of Knowledge Economy, the country's exports reached $28.3 billion last month, falling 21.2% on-year, with imports plummeting 36% to $23.7 billion.

On the other hand, South Korean automakers reported an 18.7% drop in sales for March as the global economic crisis wilted demand for their vehicles.

In Taiwan, stock market in Taiwan regained its upward momentum, led by financial and technology sector stocks supported by the gains in the DRAM makers stocks. The domestic bourses followed the regional upswing, which followed the overnight gains on Wall Street where market put up their first monthly advance in eight months. The main Taiex share index consolidated itself on the road of recovery by ending the day on a crisply higher side. Taiex added 103.61 points or 1.99%, closing the day at 5314.45.

On the economic front, Taiwan’s economic indicator showed the sixth consecutive blue in February, with the composite scores advancing one point to 10. According to the Council for Economic Planning and Development (CEPD), the rise in the composite scores was mainly due to the better performing M1B money supply, gaining one more point during the month to turn its indicator from blue to yellow-blue. The indicator in February actually reflects the economic outlook in March, so the economic climate in March seemed a little better than that in February.

In Philippines, murky economic outlook continued to keep the Philippines equities under check today, with benchmark indices closing nearly 1% lower. Philippines 2009 growth forecast has been scaled down in the latest Asian Development outlook released yesterday, citing a global downturn that brings with it reduced demand for exports, job losses, erosion in domestic consumption, and fewer investments. The benchmark index PSEi plummeted 0.95% or 18.94 points to 1,967.28, while the All Shares index fell 0.69% or 8.92 points to 1,274.98.

Philippine economy is expected to expand by just 2.5% this year, down from an earlier forecast of 3.5% and sharp drop from 2008's actual gain on 4.6%. The outlook was in line with the ADB's expectation of a marked slowdown in Southeast Asian growth, which it projects to dwindle to just 0.7% this year from 4.3% in 2008.

In India, key benchmark indices extended gains in late trade led by rally in realty, banking and IT stocks. The BSE 30-share Sensex closed up 193.49 points, or 1.99%, to 9,901.99. The S&P CNX Nifty was up 39.40 points or 1.30% to 3,060.35.

On the economic front, India's fiscal deficit for the April-February 2009 period was Rs 3,07,000 crore ($61 billion), or 94.1% of an upwardly revised budget target, a government statement said on Tuesday. In February 2009, the government revised upwards its fiscal deficit estimate for the year ending 31 March 2009 to Rs 3, 27, 000 crore, equivalent to 6% of gross domestic product from 2.5% estimated earlier. The deficit has widened after the government announced extra spending of close to Rs 1,50,000 to cover a farm debt scheme, subsidies and steps to stimulate a slowing economy.

Elsewhere, Malaysia's Kula Lumpur Composite index was up 1.33% or 11.63 points to 884.18, while Indonesia’s Jakarta composite increased by 27.67 points or 1.93% to 1,461.75. In Thailand, the Thai Stock exchange fell 1.41 points to 430.09.

In other regional market, European shares sagged on Wednesday, with oil majors leading markets lower on the first day of the second quarter. On the regional level, the U.K. FTSE 100 index fell 0.8% to 3,893.60, the German DAX 30 index lost 1.2% to 4,036.06 and the French CAC-40 index slid 1.5% to 2,766.87