- The Washington Times - Wednesday, April 15, 2009

TOKYO (AP) - Asian stock markets were mixed Wednesday, caught between burgeoning hopes for a recovery in China and disappointment over weak U.S. data. European shares were lackluster in early trade.

Lethargic financial and tech shares dragged down markets in Tokyo, South Korea and Taiwan, tempering expectations for a sustained regional rally. Investors eager for good news may have jumped the gun in driving up prices recently, analysts said.

Overnight, Wall Street shifted into reverse after the U.S. government reported a 1.1 slump in retail sales in March, an unexpectedly poor result that rattled hopes that the worst of the recession had passed. Investors watch retail sales trends closely as a barometer of consumer spending, which makes up two-thirds of the world’s largest economy.

The sales data, combined with a sharp drop in wholesale prices, came just as the corporate earnings season got under way. The Dow Jones industrials lost nearly 140 points.

Francis Lun, general manager at Fulbright Securities in Hong Kong, said investors are now focused on company results out of the U.S., particularly from banks.

“The market is prepared for GM’s funeral march, so we won’t be surprised (by that),” Lun said. “The important thing is really for the banks to recover. If the banks can report strong first-quarter results, then I think it’ll be OK.”

But even then, he added, investors are “still worried that the economic data from the U.S. is still too bad.”

Japan’s benchmark Nikkei 225 stock average lost 99.72 points, or 1.1 percent, to 8,742.96 and South Korea’s Kospi fell 9.54, or 0.7 percent, to 1,333.09. Stock averages in Australia and Taiwan also fell.

Meanwhile, benchmarks in China, Hong Kong and Singapore managed to climb into positive territory. Hong Kong’s Hang Seng closed up 89.46 points, or 0.6 percent, at 15,669.62. India’s Sensex shot up 2.3 percent to 11,214.62.

Signs of an economic revival and rumors of a possible new government stimulus sent Chinese shares higher for the fifth straight session. The benchmark Shanghai Composite Index edged up 8.88 points, or 0.4 percent, to 2536.06 _ its highest closing level since Aug. 8.

Investors were optimistic after recent data suggested the economy has improved since the final quarter of 2008. Rumors that Beijing was considering a possible new stimulus on top of its 4 trillion yuan ($586 million) spending package announced in November also kindled buying enthusiasm.

The mixed mood extended into Europe, where the FTSE 100 index of leading British shares was up 0.7 percent while Germany’s DAX fell 0.7 percent and France’s CAC 40 was down 0.6 percent. Wall Street futures pointed to a modest gains Wednesday. Dow futures rose 23 points, or 0.3 percent, to 7,907 and S&P; 500 futures rose 0.1 point to 840.40.

A murky outlook from Intel Corp. Tuesday, as well the yen’s climb against the dollar, sent tech shares lower around Asia.

Intel reported first-quarter net income of $647 million. The figure was less than half what the company earned in the same period last year but beat analysts’ expectations for far worse. The chip maker claimed personal computers sales had “bottomed out” but it unnerved investors by not giving specific revenue guidance.

In Tokyo, Advantest Corp., which makes memory chip testing equipment, shed 4 percent and Tokyo Electron Ltd. lost 4.6 percent. South Korea’s Samsung Electronics Co. fell 1.2 percent.

Financial issues also took a big hit as investors moved to lock in profits after recent gains.

Nomura Holdings Inc., Japan’s biggest securities company, plunged 7.7 percent, while Korea’s Woori Financial Co. fell 6.5 percent. Australia & New Zealand Banking Group Ltd. was down 1.9 percent in Sydney trade.

Overnight in the U.S., the Dow closed down 137.63, or 1.7 percent, at 7,920.18.

Broader measures also lost ground after three days of gains. The Standard & Poor’s 500 index fell 17.23, or 2 percent, to 841.50, and the Nasdaq composite index fell 27.59, or 1.7 percent, to 1,625.72.

Oil prices hovered around $49 a barrel for most of Wednesday in Asia as the unexpected drop in U.S. retail sales suggested crude demand could remain weak amid the worst recession in decades.

But by late afternoon, benchmark crude for May delivery recovered to rise 72 cents to $50.13 a barrel in Singapore in electronic trading on the New York Mercantile Exchange. The contract on Tuesday fell 64 cents to settle at $49.41.

In currencies, the dollar fell to 98.53 yen from 98.98 yen before recovering to 99.12, while the euro dropped to $1.3251.

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