Most Asian stock markets show marginal gains

Monday, April 28, 2008
Asian markets gained marginally on Monday as growing optimism about the US economy and a more stable dollar lifted Tokyo's index to a two-month high.

Still, many traders and investors remain cautious ahead earnings reports and key US economic data this week, as well as and central bank meetings on interest rate policies in the United States and Japan.

Optimism about the American financial sector's health has improved market sentiment, but some investors are wary ``before the earnings season gets into full swing,'' said Shinko Securities' strategist Tsuyoshi Segawa in Tokyo, where the Nikkei 225 stock index gained 30.9 points, or 0.2%, to 13,894.37.

Japanese financial stocks soared after gains in their counterparts on Wall Street last week. Mitsubishi UFJ Financial Group jumped 10%. Mizuho Financial Group closed up 9.5%, while Shinsei Bank jumped 13.5%.
The dollar's stability against the yen also buoyed exporter shares. Honda Motor Co. rose 3.0%, Nissan Motor added 2.8% and Mazda Motor shot up 7.9%.

In Hong Kong, investors sought the safety of utility companies amid the uncertainty. The blue-chip Hang Seng Index rose 0.6%, to 25,666.29.

``Several key data to be released this week may confirm the US economy is in recession,'' said Alex Tang, research director at Core Pacific Yamaichi International. ``I don't expect to see any positive catalyst from the coming economic indicators.''

The US is reporting gross domestic product and consumer confidence date this week, and many in the market expect the US Federal Reserve to cut its key interest rate another quarter point. The Fed has now cut its federal funds rate six times since September, and last cut the rate 75 basis points in mid-March.

Utility firms led Hong Kong's blue-chip gains. Hong Kong & China Gas, the city's dominant gas supplier, climbed 1.8%. CLP added 0.6%. Hongkong Electric rose 0.4%.

China Life Insurance, China's largest life insurer by premiums, fell 1.6% after it reported a 61% drop in first-quarter net profit on lower investment income.

Oil refiner Sinopec fell 2.7%. Its first-quarter net profit fell 69% from a year earlier, as a government subsidy couldn't fully offset surging oil costs. The poor earnings of Sinopec also pulled down the Shanghai market, where the benchmark index fell 2.3% to 3,474.72.

``The key focus of Monday's session was oil refiners, following the release of Sinopec's weak first-quarter earnings. The fact that oil prices hit a record high made a bad picture worse,'' said TX Investment analyst Qiu Yanying.

Sinopec's Shanghai shares fell 4.4%. And PetroChina, the publicly traded arm of China's biggest oil company, China National Petroleum Corp., fell 4.3%.

Chinese oil companies have suffered heavy losses on refining due to government controls that bar them from passing on record crude prices to consumers. Companies have been subsidizing their refining losses with profits from their drilling units.

New York crude oil futures hit a record high of US$119.93 a barrel on Monday after the weekend shut-in of a pipeline system that carries 700,000 barrels of North Sea crude a day to the UK.