By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Most Asian stock markets were on
course for solid weekly gains Friday after several frontline
companies reported strong profit growth, while major miners in
Australia got a boost from rising commodity prices.
"Global share markets are in a sweet spot at present, with
traders using good earnings reports to push stocks up, whereas any
weak economic data is viewed as keeping monetary policy looser for
longer," said Perpetual head of investment market research Matthew
Sherwood.
Hong Kong's Hang Seng Index was again leading the region's
advance, climbing 0.9%, while Taiwan's Taiex gained 0.4%, and
Australia's S&P/ASX 200 rose 0.3% as Sydney investors returned
after Thursday's Anzac Day holiday.
On the downside, South Korea's Kospi dropped 0.3% and China's
Shanghai Composite fell 0.5% in choppy moves that saw both
benchmarks rise earlier.
Japan's Nikkei Stock Average rose 0.2% in similarly volatile
trade, as investors awaited the Bank of Japan's monetary-policy
decision later in the day.
Strong overnight cues from Wall Street, fueled by corporate
earnings and a sharp drop in weekly jobless claims, supported the
region's performance.
Japan's Nikkei Average, with gains of more than 4% at its
intraday levels, was set to lead the strong regional performance
for the week. The Shanghai Composite was a major exception, down
more than 2% so far this week.
Earnings-driven moves
Earnings-related news dominated trading in several regional
markets including Japan, mainland China, Hong Kong and South
Korea.
In Hong Kong, Bank of China Ltd. (BACHY) rose 1.7%,
mobile-service provider China Unicom Hong Kong Ltd. (CHU) gained
1.1%, PetroChina Co. (PTR) added 2% and casino operator Wynn Macau
Ltd. (WYNMY) climbed 3% after each reported earnings. (Read more on
earnings from China Unicom, Bank of China, and PetroChina)
Shares of BYD Co. (BYDDY), the Chinese automobile and battery
maker backed by billionaire Warren Buffett, soared 9.8% after its
quarterly profits more than quadrupled.
In Shanghai, the mood was less upbeat amid lingering concerns
about economic growth, and as investors remained cautious ahead of
more blue-chip earnings reports due later in the day.
Shares of banking giants Industrial & Commercial Bank of
China Ltd. (IDCBY), China Construction Bank Corp. (CICHY) and
Agricultural Bank of China Ltd. (ACGBY) all dropped ahead of their
quarterly reports.
Shanghai-traded shares of Bank of China lost 0.7%, and
PetroChina eased 0.4%, untouched by gains recorded in their Hong
Kong-listed stock.
Even so, some other major stocks outperformed following their
earnings, with SAIC Motor Corp. climbing 1.1%, while Baoshan Iron
& Steel Co. was flat in a downbeat market.
Hong Kong-listed insurer AIA Group Ltd. (AAGIY) rose 1.8% after
posting a strong 25% increase in new business in the first
quarter.
In Tokyo, Japan Tobacco Inc. (JAPAF) jumped 2.7% after it
reported a 10% drop in fiscal fourth-quarter net profit but
forecast its earnings in the current financial year will rise to a
record level.
Shares of Sony Corp. (SNE) gained 0.7% after the company doubled
its profit estimate for the year ended March 31 on the back of a
weaker yen, asset sales and an improvement in its life-insurance
business.
Komatsu Ltd. (KMTUF) climbed 2.9%, but Mitsubishi Motors Corp.
(MMTOY) lost 3.3%, also driven by their respective earnings
reports.
Ahead of the Bank of Japan's policy announcement, investors were
also keeping an eye on the yen, which stayed under the
psychological level of 100 per dollar (USDJPY).
While the BOJ was not expected to make any major announcements
Friday, having unveiled a monetary stimulus on an unprecedented
scale at its last meeting, some analysts said the focus is now on
the government to pursue fiscal reforms.
"We expect the financial markets to keep a vigilant eye on
whether or not the administration can come up with a structural
reform program that lifts the growth potential of the Japanese
economy over the longer run, even if it means some pain in the near
term," Citigroup analysts led by Kiichi Murashima wrote to
clients.
Referring to the latest earnings season, the analysts said firms
were expected to revise their forecasts higher but advised
investors not to be "spooked" by any conservative estimates.
Meanwhile, stocks in Seoul came under pressure as shares of
heavyweight Samsung Electronics Co. (SSNLF) dropped 0.5% even as
the giant electronics maker company reported a record quarterly
profit that rose 42% from the year-ago period, boosted by strong
smartphone sales.
Other movers
Australian stocks rose as investors returned from Thursday's
holiday, with the resource sector doing particularly well on recent
gains in commodity prices.
BHP Billiton Ltd. (BHP) jumped 2.8% and Rio Tinto Ltd. (RIO)
climbed 2.6%, while Newcrest Mining Ltd. (NCMGY) soared 5.5% after
gold futures scored their best gain since June in the U.S.
overnight.
In Tokyo, banks were generally weaker after their recent strong
run, with caution setting in ahead of the Bank of Japan's monetary
policy decision later in the day.
Mizuho Financial Group Inc. (MFG) gave up 0.9%, and Sumitomo
Mitsui Financial Group Inc. (SMFJY) lost 0.7%.
In other financial news in Tokyo, the Nikkei newspaper reported
that billions of yen in client money may have gone missing at a
U.S. financial services firm.
The anonymously sourced report said Japan's Securities and
Exchange Surveillance Commission couldn't account for some client
assets at MRI International Inc. in an inspection that began last
month.
Shares of Nissan Motor Co. (NSANY) inched up 0.1% after the
Nikkei newspaper reported the company and its French partner
Renault SA (RNO.FR) plan to use common parts for production, a move
that will slash development costs by about 30%.
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