Asian Markets Mixed Ahead Of US Bank Stress Tests

By: Kelly Olsen, Associated Press Email
By: Kelly Olsen, Associated Press Email

SEOUL, South Korea (AP) - Asian stock markets were mixed Wednesday as investors awaited the release of U.S. government "stress tests" for banks.

Hong Kong's Hang Seng index rose 125.31 points, or 0.8 percent, to 16,550.56, but South Korea's Kospi was down 0.2 percent at 1,394.68 and Australia's benchmark index fell 0.7 percent to 3,864.5.

U.S. stock futures were lower, pointing to another decline on Wall Street, where the Dow Jones industrial average fell 16.09, or 0.2 percent, to 8,410.65 Tuesday following a 2.6 percent rally the previous day.

Investors are "taking a breather" after recent strong gains, said Winson Fong, managing director at SG Asset Management in Hong Kong, which overseas about $2.5 billion.

With the bank stress test results due out Thursday, "people are using that to take some profits," Fong said.

Taiwan's market remained strong, rising 1.9 percent amid continued investor optimism over prospects for increased investment from China after the signing of a financial cooperation agreement last week. Mainland China's Shanghai Composite index was up 1 percent at 2,592.85.

Japan's financial markets have been closed since Monday and will reopen Thursday.

The bank stress test results will provide details on U.S. financial companies in need of more capital. Reports have surfaced indicating that Citigroup Inc., Bank of America Corp. and Wells Fargo & Co., as well as a handful of regional banks, will be among those requiring assistance.

Regulators have said no large institution will be allowed to fail, and have pledged government funds if necessary.

Troubles at U.S. banks sparked the global financial crisis and their return to health is seen as a key requirement for a lasting economic recovery.

U.S. stocks have surged to their best two-month performance in nearly 35 years amid upbeat economic data suggesting the U.S. recession may have bottomed out. Rising joblessness and mixed first-quarter corporate earnings, however, remain a cause for concern.

Dow futures were down 77 points, or 0.9 percent, to 8,305, while S&P 500 futures were down 1.2 percent at 892.3.

Oil prices were flat, with benchmark crude for June delivery unchanged at $53.84 a barrel in Asian electronic trading on the New York Mercantile Exchange.

In currencies, the dollar fell to 98.07 yen from 98.79 yen late Tuesday in New York. The euro fell to $1.3269 from $1.3296.


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