Asian markets witness choppy moves

All eyes on the ECB interest rate decision, strong overnight cues support sentiments

Asian markets managed to hold onto their recent gains though the overall trend remained quite choppy as traders' monitored progress at the Japan's stricken Fukushima Daiichi atomic plant, which was crippled by the twin disaster and led to concerns of a nuclear catastrophe. Meanwhile, the US dollar edged slightly higher ahead of a critical interest rate setting meet on the other side of the Atlantic where the ECB is forecast to hike rates for the first time since July 2008 as price pressures continue to escalate in the region. In the overnight moves, the US markets ended mildly up amid thin buying interest. The Dow added 32.85 points or 0.3% to close at 12,426.75 points – its highest closing level in almost three years.



The mood was upbeat in Asia at the start but investors grew nervous as the session progressed. The Japanese market gained on upbeat US cues initially while weakness in Yen also supported sentiments. Fresh measures by the central bank to help people affected in the earthquake regions to recover and rebuild the businesses might also spurred the index linked counters though late selling made the market gave up its gains. The benchmark Nikkei 225 index ended with a gain of just 6.56 points, or 0.07% to close at 9,590.93 points. On the economic front, the Bank of Japan left its key rate at near zero and introduced a 1 trillion yen loan package for financial institutions in the earthquake-hit areas. The board also judged it necessary to provide longer-term funds to financial institutions in disaster areas so as to support restoration and rebuilding works.

In Australia, stocks pared their latest gains and slipped amid mild selling pressure. The benchmark S&P/ASX200 Index dropped 4.80 points, or 0.10 percent, to close at 4,908.10 points. On the economic front, a report released by the Australian Bureau of Statistics revealed that the unemployment rate in the country was 4.9 percent in March, being forecasts for 5.0 percent.

In China, the markets stretched upwards amid tight movement to hit their best levels in nearly five months. The benchmark Shanghai Composite Index added 6.71 points or 0.2% to close at 3,007.9 points. Markets have been holding up in the current week even as the People's Bank of China raised interest rates by 0.25% to 3.25% for one-year deposits in local currency, and 6.31% for one-year loans on last Friday. The move marks the fourth increase in less than six months and follows a spate of other tightening measures, including reserve-requirement increases and efforts to curb bank lending and cool the property market.

In Mumbai, the key benchmark indices edged lower in choppy trade as oil prices hovering near 2-1/2-year highs sparked inflation and interest rates worries. As per provisional figures, the BSE 30-share Sensex was down 38.45 points or 0.2% to 19,573.75. The Sensex rose 52.89 points at the day's high of 19,665.09 in mid-afternoon trade. A combination of inflationary pressures, slower external demand, and tighter fiscal and monetary policies is expected to curb India's growth this year, the Asian Development Bank said in a report yesterday. India's gross domestic product is now expected to expand by 8.2% in 2011, down from an estimated rate of 8.6% in 2010, ADB said. Agricultural output, strong private consumption and exports all supported growth in 2010, it said.

In other markets, Straits Times index in Singapore edged up 0.04%, the Taiwan Weighted index rose 0.56% while the Seoul Composite index in South Korea slid 0.21%. In commodities, flat movement was witnessed as traders eyed the ECB meet and an uncertain tone in the currency markets provided little cues. Crude oil hovered around two and half-year highs of $109 per barrel in the electronic trades while Gold rallied from lows near $1450 to quote around $1460 per ounce.