Asian markets also followed the US stock market higher
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| ON A ROLL Wells Fargo is expected to report net income of about US$3 billion for the first quarter, more than double what analysts expect |
ASIAN markets followed the US stock market higher yesterday as they rode on an upbeat profit forecast from US bank Wells Fargo which offered hope that the worst of the financial crisis had passed.
Encouraging data on US trade and jobless claims had also helped Wall Street stocks end up for a fifth week on Thursday, while White House economic adviser Lawrence Summers predicted the economy would emerge from a sense of 'freefall' in months as stimulus and rescue efforts took effect. Markets in parts of Asia including Australia, Singapore and Hong Kong were closed for the Good Friday holiday, as were European and US markets.
But those that were opened closed higher yesterday. Tokyo, Shanghai, Korea, Taiwan and Bangkok all rose.
Japan's Nikkei average ending up 0.5 per cent, having reached a three-month high above 9,000 points during the session. The Nikkei closed higher despite banking giant Sumitomo Mitsui Financial Group's reported net loss of US$3.9 billion for the financial year just ended.
'The Nikkei is likely to test this year's peak of around 9,300 in the near term, supported by growing optimism towards the US economy,' said Takahiko Murai, general manager of equities at Nozomi Securities.
'But further gains in Tokyo stocks might be limited as executives at major firms here still hold pessimistic views on the Japanese economy.'
China's stocks soared to a seven-month closing high after the official Xinhua news agency said exports had fallen 17.1 per cent in March, much slower than February's 25.7 per cent tumble, and beating economists' forecast of a 21.5 per cent drop.
Stocks in Seoul jumped almost two per cent and the won also firmed after the South Korean central bank estimated Asia's fourth-largest economy grew a seasonally adjusted 0.2 per cent in the first quarter, helped by interest rate cuts and a fiscal stimulus. Korea on Thursday left interest rates unchanged, saying it saw signs the sharp deterioration in the economy was abating.
But in a sharp downgrade of its previous forecasts, the Bank of Korea said the export-dependent economy would contract by 2.4 per cent in all of 2009, which would mark the first annual decline in more than a decade.
And the market in Seoul closed before POSCO, the world's fourth-largest steelmaker, revealed it missed forecasts for first-quarter profit, which slumped to a seven-year low. It didn't hold out much hope of improvement for the second quarter.
Profits were improving for Wells Fargo, which said it expected to report net income of about US$3 billion for the first quarter, more than double what analysts on average expected.
Wells Fargo shares soared more than 30 per cent on the New York Stock Exchange on Thursday, sending 3.14 per cent.
'We're in a market that is hungry for what I call rays of sunshine or glimmers of hopes on company fundamentals and economics,' said Fred Dickson, market strategist and director of retail research at DA Davidson & Co in Lake Oswego, Oregon.
With a number of high-profile banks set to unveil their first quarter earnings next week, investors were relieved by the report and took it as a sign that troubles in the country's ailing financial industry may be nearing an end.
'The performance was better than expectations so everyone is thinking the financial sector is getting better,' said Christian Jin, who helps oversee US$1.2 billion in assets as head of global investment at CJ Asset Management in Seoul. -- Reuters, AFP, AP
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