By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — Japanese stocks closed out a stellar quarter on a modestly upbeat note Friday, with advances for some tech blue chips offsetting losses for Panasonic Corp. and bank shares.
Tokyo’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -1.83% finished 0.5%, though the broader Topix benchmark lost 0.2%. South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.71% sat 0.7% higher just ahead of the close, while the Shanghai Composite index /zigman2/quotes/206600939/delayed CN:000001 -0.17% was up 0.2% in afternoon trade.
Markets in Hong Kong, India, Australia and Singapore were closed Friday, with those in Europe and the U.S. also set to remain shut for the Good Friday holiday.
The stage was for a positive session in the few Asia markets remaining open, after U.S. stocks rose on Thursday, with the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.51% and the Dow industrials /zigman2/quotes/210598065/realtime DJIA -1.71% finishing at record highs, as investors bought equities at the close of the first quarter.
The S&P 500 recorded a quarterly advance of 10%, its best performance in a year, while the Dow Jones Industrial Average rose 11.3% in the three-month period. Japanese stocks put in an even better quarterly performance, with the Nikkei Stock Average rising 19.3%.
Commenting on the steep first-quarter gains in the U.S. and Japan, Bank of America Merrill Lynch chief investment strategist Michael Hartnett said “fears about fiscal policy in the U.S. and Europe were overwhelmed by stronger-than-expected equity inflows, an improving U.S. real-estate market, and reflationary central-bank policies.”
Shadow banking poses risks to Chinese financial system
S&P estimates that the so-called ‘shadow banking’ system in China was worth $3.7 trillion in 2012.
“The second-quarter will likely be a ‘show-me’ quarter,” Hartnett said. “Equity performance will depend on whether European and Chinese growth expectations recover before reflation in the U.S. and Japan disappoints.”
Financials are expected to benefit from central-bank deflation fighting measures, but the sector came under pressure in Japan on Friday.
Mitsubishi UFJ Financial Group Inc. /zigman2/quotes/207520099/delayed JP:8306 -2.66% fell 1,1%, Resona Holdings Inc. /zigman2/quotes/203178794/delayed JP:8308 -0.38% /zigman2/quotes/201424788/delayed RSNHF -4.71% declined 1.4%, and broker Daiwa Securities Group Inc. /zigman2/quotes/201391978/delayed JP:8601 -0.60% /zigman2/quotes/206649614/delayed DSECF -0.0098% dropped 0.9%.
Panasonic /zigman2/quotes/201785256/delayed JP:6752 -1.98% took a tumble, with the firm’s shares losing 7.1% after the company’s president said the tech conglomerate planned to cut loose unprofitable units as part of its restructuring.
On the plus side, blue-chip tech and electronics names showed some strength, with Kyocera Corp. /zigman2/quotes/204880749/delayed JP:6971 -2.45% /zigman2/quotes/205094593/delayed KYOCF -8.27% up 2.6%, Tokyo Electron Ltd. /zigman2/quotes/202883609/delayed JP:8035 -3.51% /zigman2/quotes/200298228/delayed TOELF -2.89% climbing 4.4%, and Sharp Corp. /zigman2/quotes/203224600/delayed JP:6753 -2.27% /zigman2/quotes/207472799/delayed SHCAF +0.53% ending 1.5% higher after a Nikkei news report said the firm plans to halve the size of its headquarters staff.
Chinese banks were taking back some ground on Friday, after recording steep losses in the previous session following news that the Chinese government was set to clamp down on some wealth-management products.
China Merchant’s Bank Co. /zigman2/quotes/208058581/delayed CN:601939 +0.18% /zigman2/quotes/207732534/delayed CICHY +2.86% was outperforming in late trade with a 3.1% rally, while Industrial & Commercial Bank of China Ltd. /zigman2/quotes/202525815/delayed CN:601398 +0.46% /zigman2/quotes/204265987/delayed IDCBF -6.88% was 1% higher.
/zigman2/quotes/201568493/delayed BACHY +0.99% “The latest tightening of rules on wealth-management products will help manage risks building up in China’s shadow banking system,” said economist Mark Williams at Capital Economics.
China CItic Bank Corp. /zigman2/quotes/206411273/delayed CN:601998 +0.66% /zigman2/quotes/204346887/delayed CHBJF +0.77% fell 1.9%, however, after it reported a small increase in 2012 profit to 31.03 billion yuan ($5 billion), which fell below analyst expectations for a 33.34 billion yuan profit.
Concerns about government policy have broadly pressured Chinese stocks recently, and the index is on track for 1.6% loss this quarter, after falling 5.6% over the month.
Property companies have also suffered from policy concerns, and the sector mostly declined again Friday, with China Vanke Co, down 0.8% in Shenzhen, and Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 +4.17% lower by 1.4% in Shanghai.
In South Korea, the Kospi was showing a gain of just 0.5% for the quarter, as companies that tend to compete with Japanese rivals underperformed as the yen depreciated.
Still, some firms were making up a bit of ground on Friday, with Hyundai Motor Co. /zigman2/quotes/206684590/delayed KR:005380 -2.75% /zigman2/quotes/204364212/delayed HYMTF -2.92% up 0.7% and Samsung Electronics Co. /zigman2/quotes/209800866/delayed KR:005930 +0.95% /zigman2/quotes/202367843/delayed SSNLF -29.70% up 1.1%.