Asian stocks turned in a mixed performance on Thursday, with Japanese shares rallying on expectations of aggressive monetary easing by the Bank of Japan, while stocks elsewhere showed little change amid Cyprus fears. A pick-up in China's manufacturing sector and a commitment by Fed Chairman Ben Bernanke to keep interest rates at record lows helped to limit the downside to some extent.
At the conclusion of its two-day FOMC meeting, Bernanke described the improvement in U.S. employment to date as "partial" and "modest," and made it clear that he is looking for sustained improvement before tightening policy.
Cypriot leaders are scrambling to draw up a 'Plan B' aimed at securing a bailout and averting a financial meltdown after MPs rejected a controversial bank deposit levy. It is widely expected that a rescue plan will be placed before Parliament later today.
Japanese shares rallied to close at a near four-and-a-half-year high, as trading resumed after a national holiday. The yen edged higher against its rivals but its gains were limited ahead of Bank of Japan Governor Haruhiko Kuroda's first press conference later in the day. The Nikkei average rose 1.3 percent to 12,636, its highest closing level since Sept. 3, 2008, while the broader Topix index advanced 1.2 percent.
Brokerage Nomura Holdings rose 2.3 percent and lender Mitsubishi UFJ Financial Group added 1.6 percent amid expectations the Bank of Japan will soon embark on more quantitative easing under the new governor. Industrial robots maker Fanuc soared 5.1 percent and electronic parts maker Kyocera gained 3.1 percent. Yahoo Japan jumped 4.1 percent as it declared a larger year-end dividend for the fiscal year ending in March. Daikin Industries tumbled 3.7 percent on a brokerage downgrade.
In economic news, Japan posted a merchandise trade deficit of 777.5 billion yen in February, the Ministry of Finance said - falling into the red for the eighth consecutive month. Exports dipped 2.9 percent from a year earlier to 5.284 trillion yen, while imports jumped an annual 11.9 percent to 6.061 trillion yen.
China's Shanghai Composite index rose 0.3 percent, extending gains for the third straight session after a preliminary survey of factory managers showed growth in China's vast manufacturing sector accelerated in March. The preliminary HSBC China Manufacturing Purchasing Managers' Index rose to 51.7 in the month from a final reading of 50.4 in February. Banks fell on profit taking following Wednesday's strong rally, limiting the upside to some extent. Hong Kong's Hang Seng index ended 0.1 percent lower, erasing early gains.
Australian shares ended a volatile session lower, extending losses for the fourth consecutive session. The benchmark S&P/ASX 200 shed 0.2 percent, while the broader All Ordinaries index slipped 0.1 percent. Sentiment was dented by political uncertainty after Prime Minister Julia Gillard called a leadership vote to lead the Labor Party in the federal election due in six months.
Miners ended mixed, with BHP Billiton losing 0.4 percent, while Rio Tinto advanced 1.4 percent and Fortescue rallied 2.9 percent. Gold miner Newcrest lost 2.4 percent as gold prices edged lower on receding worries over the fiscal crisis in Cyprus. Among the major banks, ANZ rose 1.1 percent and Westpac added half a percent, while Commonwealth and NAB ended on a subdued note. Billabong shares were placed in a trading halt after shares plummeted by more than 20 percent.
On the macroeconomic front, Australia's manufacturing sector has slumped to its weakest level in almost three years, gaining little traction from a slew of interest rate cuts since November 2011, the Australian Chamber of Commerce and Industry-Westpac survey of industrial trends showed. Its composite index dropped to 46 points in the March quarter from 50.4 points in the previous quarter.
South Korea's Kospi average ended 0.4 percent lower at a five-week low as foreign investors continued to remain net sellers and the threat of cyber terrorism hurt investor sentiment. Computer networks of several major South Korean broadcasters and banks were paralyzed yesterday, prompting a probe into links with North Korea.
New Zealand shares lost ground as logistics firm Mainfreight warned of a weaker second-half and Xero fell from a record high on profit taking. The benchmark NZX-50 index rose 0.2 percent. Mainfreight shares slumped 4.7 percent after the company said its full-year operating earnings will be roughly the same as last year's, with the second half weaker than the first-half. Cloud accounting software firm Xero fell over 3 percent on profit taking after climbing 8 percent to a record high yesterday. Heavyweight Telecom lost 1.3 percent amid reports it will soon announce up to 1500 job cuts.
Among the prominent gainers, construction firm Fletcher Building rose 1.6 percent and building products company Steel & Tube Holdings added 1.1 percent after official data showed the New Zealand economy grew at the fastest quarterly pace in three years in the December 2012 quarter. GDP rose 1.5 percent to $36.81 billion from 0.2 percent in the preceding quarter.
Elsewhere, India's benchmark Sensex was down 0.1 percent in volatile trading, Malaysia's KLSE Composite slipped marginally and Indonesia's Jakarta Composite index fell 0.8 percent, while Singapore's Straits Times index was up half a percent and the Taiwan Weighted average edged up 0.2 percent.
U.S. stocks rose overnight after the European Central Bank assured to provide liquidity to Cyprus and the Federal Reserve said it would continue to support the U.S. economy. The Dow rose 0.4 percent, the tech-heavy Nasdaq added 0.8 percent and the S&P 500 gained 0.7 percent.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org