Tuesday, Mar 31, 2009

SINGAPORE (Dow Jones)--Asian markets ended mixed Tuesday, with financials dragging down Japanese shares during a volatile session as investors locked in profits before the end of the financial year.

Indian stocks were up strongly in the afternoon, clawing back some of ground lost during the previous session. Several other markets edged higher, while Australia edged lower.

Persistent concerns about the U.S. automobile and financial sectors had a limited impact in Asia, compared with in the U.S., after many regional markets fell sharply Monday, pre-empting Wall Street's decline.

"We've been rising for a long time now and are turning to another stage," said Y.K. Chan, strategist at Phillip Capital Management. "There is a lack of good news at this moment. After yesterday's fall, people aren't looking to dump shares at low prices. And they aren't buying either."

Japan's Nikkei 225 Average advanced after a tentative start, with automobile companies in the lead, but retreated on late selling. The benchmark ended 1.5% lower at 8,109.53. The index still gained 7% in March. Losses during the financial year which ended with the close of Tuesday's session amounted to just over 35%.

Hong Kong's Hang Seng Index rose 0.9% Tuesday. South Korea's Kospi gained 0.7%, Taiwan's Taiex inched up 0.1% and China's Shanghai Composite rose 0.6%, while Australia's S&P/ASX 200 dropped 0.6%.

In afternoon trading, India's Sensex was up 1.6%, while Singapore's Straits Times had also gained 1.6%.

Overall, the day capped a rewarding month for Asian markets, with South Korean, Chinese and Taiwanese stocks posting double-digit gains, while most other indexes gained at least 5%.

"What was at times rampant investor risk appetite during the last couple of weeks has been reined in during the last sessions and with a number of key releases and the G20 meeting still to come, we don't expect to see major range levels broken, though intraday volatility is likely," Societe Generale's Asia foreign-exchange and investment-banking strategist Patrick Bennett wrote in a report.

U.S. stock futures were recently pointing 27 points higher in screen trade.

Several auto stocks advanced on hopes that government incentives to support the ailing industry and recent weakness in Asian currencies will aid sales.

Hyundai Motor jumped 4.7% and Kia Motors climbed 6% in Seoul, Geely Automobile Holdings rose 1.5% in Hong Kong and Maruti Suzuki climbed 1% in Mumbai afternoon trading. In Tokyo, Honda Motor Co. ended up 0.7% and Daihatsu Motor Co. rose 2.7%. But Toyota Motor fell 0.6%, reversing early gains in the weak market.

The revamp of key U.S car makers could take several years to complete, and their South Korean counterparts could use the uncertainty tied to that period of restructuring to try to win customers, said Jeff Lee, an analyst at Hana Daetoo Securities.

Energy-related stocks declined on a sharp fall in crude-oil prices in New York. Shares of Oil Search fell 4% and BHP Billiton gave up 2% in Sydney and Cnooc lost 1.7% in Hong Kong.

Publishing group APN News & Media fell 5.7% in Sydney after saying it had seen an improvement in demand in March, but warned the outlook for the current financial year remains tough.

Shanghai-listed shares were volatile, with selling pressure seen early in the day on news the market regulator had taken an important step toward clearing the way for a Nasdaq-style stock market. A new rule from the regulator lowers requirements for companies to list on the Growth Enterprise Market, which is designed to help smaller companies raise capital. The news raised concerns that a flood of new issues might crimp liquidity in existing stocks.

Moody's Economy.com economist Sherman Chan said that despite those concerns, the passion for the new market may be short-lived. "Risk aversion may prompt investors to stick with relatively more stable companies such as banks when the economic outlook is still gloomy," she said.

Malaysia's main index ended 0.4% higher, Thailand's SET Index had recently gained 0.8% and Indonesian shares closed 1.1% higher. Philippine shares fell 1.8%.

The Japanese yen was lower against the U.S. dollar and euro, while the euro had gained against the dollar as stocks in Asia showed resilience, indicating some appetite for riskier assets including high-yielding currencies.

However, some traders expressed doubt whether the trend would last.

"In the near term any renewed rally in stocks and other risk assets is likely to push the U.S. dollar down again but our medium term view remains for the [dollar] to perform stronger as financial sector de-leveraging and the global economic slump keep investors largely risk-averse throughout 2009," said UBS.

The U.S. dollar was recently around 98.27 yen, up from 97.26 yen late in New York, and the euro was at 130.51 yen, up from 128.30 yen. Against the U.S. dollar the euro was up at $1.3281, from $1.319.

Spot gold was recently at $918.90 a troy ounce, up $3.10 from New York levels, after sliding overnight. May Nymex crude-oil futures gained 56 cents to $48.97 a barrel on the Globex electronic platform, having dropped 7.6% in New York.

-Dow Jones Newswires; +65-6415-4140; markettalk@dowjones.com

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(END) Dow Jones Newswires

March 31, 2009 06:02 ET (10:02 GMT)