Asian Markets End Higher on Optimism about Banking Sector Stability

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The major markets across the Asia-Pacific region ended in the green on Tuesday, buoyed by the cues from Wall Street, where the markets witnessed the biggest one-day rally since October 2008 after the Obama Administration unveiled plans to help banks sell toxic assets and pave way for a revival in credit flow, which is critical for reviving the economy. Positive economic data on existing home sales also lifted market sentiment.

Market analysts are speculating that the extension of the relief rally might signal that the bottom has already been reached and the markets may find stability in the short-term, on optimism that the plans will really work and the global economic recovery might take place sooner than expected, with the banking sector likely to lead the recovery.


Crude oil was modestly down at $53.54 a barrel in Asian trading having ended Monday's session higher by $1.73 at $53.80 a barrel on New York Mercantile Exchange after hitting an intra-day low of $51.62 and a high of $54.05.

In Tokyo, the benchmark Nikkei 225 Index ended 273 points or 3.32% higher at 8,488. The broader Topix Index of all First Section issues gained 2.7% or 21.16 points to 813.

On the economic front on Tuesday, minutes from the Bank of Japan's monetary policy meeting held on February 18 and 19 revealed that board members suggested that the Japanese economy may begin to recover from the current recession in the second half of this year at the earliest. At the meeting, the board voted unanimously to keep the overnight call rate unchanged at 0.10%. The board also decided to expand special funds-supplying operations in order to facilitate a fall in longer-term interest rates that are actually applicable to fund-raising by firms and relieve them from funding concerns.

Among banking stocks, Mitsubishi UFJ, Japan's biggest bank, gained 4.49%, Sumitomo Mitsui rose 3.16% and Mizuho Financial advanced 5.00%. Exporters also gained on the back of a weaker yen. Canon advanced 4.35%, Sharp gained 3.08% and Sony rose 5.72%. Automaker Toyota added 3.61% and Honda moved up 2.42%.

Oil-related stocks also advanced. Inpex edged up 0.14%, Nippon Oil gained 3.35% and Showa Shell added 1.10%. Among trading houses, Mitsubishi Corp. gained 4.23%, Itochu moved up 3.99% and Sumitomo Corp. rose 1.89%.

In Australia, the benchmark S&P/ASX 200 index, having opened strongly and gained as much as 2.6% in early trading, pared back much of its gains over the course of the session before ending higher by 29.7 points, or 0.84%, to 3,580, and the broader All Ordinaries Index, following a similar trend, closed the session up 34.20 points, or 0.98%, at 3,517.

Mining stocks advanced on higher commodity prices. BHP Billiton, the largest mining company in the world, gained 1.77% and Rio Tinto, the third largest miner in the world, advanced 4.73%. However, Oz Minerals shed 11.02% after the government extended its review into a A$1.8 billion rescue bid by Chinese state-owned Minmetals.

Among energy stocks, Woodside gained 4.50%, Oil Search advanced 5.43% and Santos rose 1.67%.

Financial stocks ended mixed as investors resorted to profit taking at higher levels. ANZ Banking Group added 1.31%, National Australia Bank moved up 0.35% and Westpac Banking gained 0.84%. Investment bank Macquarie Group surged 5.38%. On the other hand, Commonwealth Bank of Australia ended lower by 1.65%.

Retail stocks also ended mixed. David Jones advanced 1.38%, and Coles' owner Wesfarmers gained 0.97%, while Woolworths fell 1.12%.

Gold miners ended weak after gold closed marginally lower for a second straight session on Monday. Lihir Gold lost 3.53% and Newcrest Mining shed 1.96%. However, Sino Gold bucked the trend and edged up 0.18%.

In Hong Kong, the benchmark Hang Seng Index gained 462.92 points, or 3.44% to close at 13,910, led by financial stocks, telecom and china-related shares.

Among financials, HSBC Holdings surged up 9.83%, Hang Seng Bank gained 4.94%, BOC Hong Kong advanced 6.57%, Bank of East Asia rose 6.97%, and Bank of Communications added 4.04%. Insurance stocks also gained. Ping An Insurance rose 4.44% and China Life moved up 0.58% from previous close.

Telecom stocks ended higher; Hutchison Whimpoa advanced 5.62%, China Mobile gained 1.59%, and Tencent Holdings gained 5.12%.

China-related stocks ended mixed. China Mercantile Holdings surged 11.18% and China Resources gained 0.49%. However, China Overseas lost 2.65%.

Among other major stocks, Foxconn International Holdings gained 7.91%, while retailer Espirit Holdings lost 4.71%

Resource stocks showed mixed sentiment. While Aluminum Company of China, or Chalco, decrealsed 1.17%. CNOOC and Petrochina gained 4.35% and 0.93% respectively.

The benchmark KOSPI Index in South Korea gained 22.20 points, or 1.85% and closed at 1,222.

In an effort to revive the economy by boosting demand, the South Korean government approved an extra budget of 28.9 trillion Won, equivalent to $20.7 billion, earlier in the day.

Further, in a meeting with the local business leaders and economic analysts, the Minister for Knowledge Economy stated that, based on the preliminary report from the Korea Customs Service, trade surplus for March is likely to reach $4.5 billion, due to a much sharper decline in imports than in exports during the first 20 days of the month. The data accentuates the weakness in the domestic economy.

Among the financials, Woori Finance gained 2.41%, Shinhan Financial Group advanced 3.61% and KB Financial Group, the holding firm of Kookmin bank, moved up 4.63%.

Market heavyweight Samsung Electronics rose 1.82%. Among technology stocks, Hynix Semiconductor added 0.97%. LG Electronics gained 3.60%, and LG Display moved up 2.04%.

Shipbuilders also ended higher. Hyundai Heavy Industries advanced 1.23%, Samsung Heavy Industries gained 1.90%, and Daewoo Ship building rose 2.97%.

Oil-related stocks advanced on higher crude oil prices. SK Holdings gained 4.33%, and S-Oil rose 1.37%.

Among the other major markets, China's Shanghai Composite Index rose 12.94 points or 0.50% to 2,338, Indonesia's Jakarta Composite Index closed at 1,436, up 29.47 points, or 2.02%, Singapore's Strait Times Index gained 2.54%, or 42.26 points, to 1,706, and Taiwan's Weighted Index added 118.30 points, or 2.30%, to 5,242.