Hong Kong: Asian stocks rose on Monday on hopes for the global economy, with Taiwan shares hitting a near 7-month closing high, while oil prices slipped below $52 after a dramatic oil demand downgrade by the International Energy Agency.
But trade was thinned with many Asian and European centres still out for the long Easter holiday weekend, and shares were largely directionless as investors waited for US bank results due out this week and the resulting reaction of stock markets.
US banks including Goldman Sachs JPMorgan and Citigroup are set to report first-quarter results this week.
“The world is watching this, and with stock markets likely to move strongly in response, nobody wants to either buy or sell actively today,” said Masayoshi Okamoto, head of dealing at Jujiya Securities in Tokyo.
“People remain positive overall, though.”
Hopes that the global economy may be over the worst, particularly after a robust rise in Chinese loan data released at the weekend, meant sentiment remained largely positive.
Central bank data on Saturday showed China’s banks lent a record amount of new local currency loans, the latest sign that the economy is gaining steam, and helped send Chinese stocks up more than 3% in heavy trade.
Taiwan stocks were led higher by property shares such as Cathay Real Estate climbing after parliament approved a special spending budget, while Seoul shares rose on automaker gains after the government said it will inject money to support the car industry through the global downturn.
But Japan’s benchmark Nikkei underperformed the rest of Asia to close down 0.4%, dragged lower by retailers and tech firms such as TDK Corp after a day of seesaw trade that took it in and out of negative territory.
With US markets closed on Friday, local factors took the lead in most Asian markets as investors waited for Wall Street to resume trading later in the day.
“Investors are divided over whether shares at the current level still have room to rise, or whether we need to see clearer signs of a recovery in the US bank sector and the global economy,” said Lee Sun-yeob, a market analyst at Goodmorning Shinhan Securities in Seoul.
The Korea Composite Stock Price Index (KOSPI) closed up 0.2% at 1,338.16, while Taiwan’s main TAIEX share index gained 1.3% to 5,857.64.
The MSCI index of Asia-Pacific stocks outside Japan rose 0.5%, crawling back towards a six-month high hit a week ago.
The dollar edged up against the yen in quiet trade, gaining 0.2% to ¥100.38.
US crude for May delivery fell 0.75 to $51.49 on Monday, the first day of trade since Thursday’s nearly 6 percent gain, as the market waited for confirmation of the grim demand outlook from the US government.
The IEA said on Friday that world oil demand will dive by 2.4 million barrels per day to 83.4 million bpd this year, a one million bpd cut from its previous report.
The US Energy Information Administration is set to release its short-term energy outlook on Tuesday, while Opec publishes its updated monthly view on Wednesday.
Japanese government bonds were little changed in subdued trading as uncertainty over the outlook for extra JGB issuance kept investors on the sidelines.
The government said on Friday it would issue more than ¥10 trillion ($100 billion) of debt in the year to March 2010 to finance its latest stimulus package, which is worth $154 billion.