Asian Stocks Mostly Higher But Caution Lingers

By: Jeremiah Marquez, Associated Press Email
By: Jeremiah Marquez, Associated Press Email

HONG KONG (AP) - Asian stocks were mostly higher Tuesday as investors weighed surprisingly strong earnings from U.S. investment bank Goldman Sachs against more signs of weakness from the region's economies and companies.

Hong Kong and Australian markets were among the day's best performers, catching up with last week's gains after being closed for a public holiday, but Japanese shares were dragged lower by the rising yen and sharp declines in automakers. Crude oil prices slipped to near $49 a barrel on concerns about demand.

Investors were comforted after Goldman Sachs reported a better-than-expected profit of $1.66 billion for the first quarter, beating Wall Street's forecasts and reinforcing the belief that U.S. banks may be stabilizing. That following a similar upbeat forecast from Wells Fargo & Co.

But the news was more sobering in Asia.

Singapore's economy spiraled deeper into recession in the first quarter, contracting by a record 20 percent as demand for exports evaporated. The city-state's central bank responded with an estimated 1.5 percent devaluation of the Singapore dollar. In Australia, Qantas Airways Ltd. cuts its annual profit forecast and said it would shed 500 managers.

Analysts said some markets were held back by nagging worries that global equities, after a huge run-up in recent weeks, are due for a breather since a full economic recovery is still far off.

"A number of investors are pretty sidelined during the earnings season and watching how the results play out before going either way, particularly since the market has risen so much already," said Lorraine Tan, director of equities research at Standard & Poor's in Singapore.

In Japan, the Nikkei 225 stock average lost 66.64 points, or 0.8 percent, to 8,857.79. Shanghai's index slipped 0.1 percent to 2,510.83.

Among advancing markets, Hong Kong's Hang Seng added 433.23, or 2.9 percent, to 15,334.64. South Korea's Kospi gained 0.7 percent to 1,348.16 in seesaw trade.

Overnight in New York, stocks rebounded to end mostly higher.

The Dow fell 25.57, or 0.3 percent, to 8,057.81, but the Standard & Poor's 500 index rose 2.17, or 0.3 percent, to 858.73.

Wall Street futures pointed to a lower open on Tuesday. Dow futures fell 47 points, or 0.6 percent, to 7,948 and S&P 500 futures slipped 8.5, or 1 percent, to 845.50. The Nasdaq gained 0.1 percent to 1,653.31.

In oil, prices skidded amid pessimism demand for crude can recover in the near term following last week's projection cut by Paris-based International Energy Agency.

Benchmark crude for May delivery fell 70 cents to $49.35 a barrel. The contract on Monday dropped $2.19 to settle at $50.05.

In currencies, the dollar fell to 99.81 yen from 100.34 yen, while the euro dropped to $1.3354.


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