Greece guts most Asian markets

Traders prefer to lock in gains from increase in the previous session amid fears of a possible default by debt-ridden nation

Asian stocks failed to extend the yesterday's rebound today, hurt by selling in resources and property stocks as more worries about Greece's debt crisis eroded confidence in a world recovery. The markets shrugged off calls for upbeat global GDP growth and instead focused on the fact that the extra yield investors demand to hold Greek 10-year bonds instead of German bunds climbed to a record 530 basis points. The 10-year Greece bonds were yielding above 8% -a fresh high since Greece joined the euro in 2000. Traders preferred to lock in gains from the increase in the previous session and preferred to move to the sidelines amid fears of a possible default by debt-ridden Greece. Major Asian markets sank as much as 1-1.50% after ending the previous session up.

The global economy is expected to grow more than initially estimated in 2010, led by growth in emerging and developing economies, the International Monetary Fund said in its latest report, upwardly revising its outlook. The global lender now sees world economic growth of 4.2% this year, better than the 3.9% expansion predicted in January. Growth is expected to nudge up to 4.3% next year. The global economy contracted by 0.6% in 2009, as world trade slumped and credit froze up. However, this did not help turn the sentiments around as Asian equities followed a lackluster day in U.S. markets, where strong earnings results from big names like Apple Inc. and Boeing Co. weren't enough to drive the entire market ahead.

The stock market in Japan ended in negative territory amid fresh concerns about debt crisis in Greece and lack of cues for buying in the market. Mixed closing on Wall Street in the previous session and weak trading across other markets in the region also impacted market sentiment. The benchmark Nikkei 225 Index dropped 140.96 points, or 1.27%, to 10,949, while the broader Topix index of all First Section issues was down 8.90 points, or 0.90%, to 978.

On the economic front, a report released by the Ministry of Finance revealed that the country posted a trade surplus of 948.9 billion yen in March, higher than the revised trade surplus of 649.6 billion yen reported for February. According to the report, exports surged an annual 43.5% to 6.004 trillion yen - after the 45.3% annual gain a month earlier.

Aussie market snapped 2-day gains and ended in negative territory on Thursday dragged down by mining stocks and banks following drop in commodity prices in the international market. Concerns about China tightening its monetary policy measures further to cool off its economy. The benchmark S&P/ASX200 Index declined 46.90 points or 0.95% to close at 4,907, while the All-Ordinaries Index ended at 4,937, down 43.70 points, or 0.88%.

On economic front, a report released by the Australian Bureau of Statistics revealed that new vehicle sales in the country fell a seasonally adjusted 2.7% month-on-month in March to 83,200 vehicles, compared to a 1.9% fall in the previous month.

China's stocks fell today, led by banks and developers, on speculation the government will intensify measures to curb the property market amid calls that the overheated hosing market could be in a swoon from hereon. The Shanghai Composite Index dropped 33.79, or 1.1 percent, to 2,999.48 at the close, the fifth decline in six days. The CSI 300 Index fell 1.1 % to 3,201.54.

In Mumbai, benchmark index for Indian equities ended higher than its previous close though they came down from its intra-day highs. The 30-scrip sensitive index of the Bombay Stock Exchange (BSE), which opened at 17,476.48 points, closed at 17,573.99 points, 101.43 points or 0.58 % higher than its previous close at 17,472.56 points. At the National Stock Exchange (NSE), the broader 50-share S&P CNX Nifty ended at 5,269.35 points, a gain of 0.47 %from its previous close at 5,244.9 points. Energy, auto and banking scrips saw buying, while realty and metal stocks came under selling pressure

On Wednesday, the Dow rose 7.86, or 0.1 percent, to 11,124.92, its third straight advance. However, the broader Standard & Poor's 500 index slipped 1.23, or 0.1 percent, to 1,205.94.

Elsewhere today, Hong Kong's main stock index shed 0.3 %to 21,454.94, South Korea's Kospi lost 0.5 %to 1,739.52 while the Manila stocks rose nearly 1% on upbeat assessment from the IMF.

In currencies, the dollar snapped to a high near 1.3300 as investors waited for clarity on Greece fiscal situation and a bearish undercurrent in risky assets helped the greenback. Oil prices rose toward the end of the session in Asia but faltered yet again as an intraday upswing above $84 was unsustainable. The light sweet crude oil futures for June delivery slipped from a high of $84.07 a barrel in electronic trading and currently trade at $83.04, down 64 cents per barrel from previous close.