By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Most Asian markets rose Thursday after key U.S. indexes clinched another record finish overnight, although Japanese stocks skidded as a firmer yen led investors to lock in recent gains despite strong economic growth data and upbeat results from banks.
The Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 +0.79% climbed 1.2%, Taiwan’s Taiex gained 0.9%,South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.29% added 0.8%, and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +1.04% rose 0.2%.
On the downside, Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +1.32% dropped 0.4% to 15,037.24, managing to finish above the 15,000-point level. The benchmark had on Wednesday ended above 15,000 for the first time in more than five years.
Meanwhile, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.21% fell 0.5% as commodity stocks weakened.
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.51% rallied higher Thursday to end at its 20th record level so far in 2013. But while the continuing rally in U.S. stocks aided sentiment, weak economic growth in the euro zone and sluggish commodity prices kept buyers in check after strong gains for several regional benchmarks so far in May and this year. DJIA futures were on Thursday down 13 points, or 0.1%, pointing to a likely lower start on Wall Street.
Concerns about slowing growth in Asia was also in focus.
Sanjay Mathur, Royal Bank of Scotland’s Asia-Pacific head of economic research, said growth in the region excluding Japan has “taken a turn for the worse” of late, in terms of gross domestic product growth, exports and manufacturing indicators.
“Overall, we believe that recovery is likely to take its own course and be moderate given the absence of either strong global demand or fresh policy stimuli. This should ensure a period of low inflation and pressure on corporate [profit] margins,” Mathur said.
Stock gains in Hong Kong were led by heavyweight HSBC Holdings PLC /zigman2/quotes/202687335/delayed HK:5 +9.22% , which climbed 1% a day after it unveiled a plan to cut costs by up to $3 billion by 2016. The bank is planning to cut as many as 14,000 jobs across the world.
Shares of Internet services major Tencent Holdings Ltd. /zigman2/quotes/204605823/delayed HK:700 +0.50% /zigman2/quotes/207908563/delayed TCEHY +0.51% jumped 6.5% after the company announced strong growth in quarterly profit.
Those gains help offset losses in the energy sector as a strengthening dollar weakened the outlook for prices of commodities, including crude oil.
The Next 24: Watch the yen, and more
Cisco will set the tone for technology stocks, and investors should pay attention to the yen overnight.
Shares of PetroChina Co. /zigman2/quotes/204979431/delayed HK:857 +1.72% /zigman2/quotes/205108732/composite PTR +2.35% lost 2.1% and Cnooc Ltd. /zigman2/quotes/203421416/delayed HK:883 +0.13% /zigman2/quotes/204964401/composite CEO +1.22% shed 1.4%.
Commodity producers also lost ground in other regional markets, weighing in particular on Australia, where BHP Billiton Ltd. /zigman2/quotes/208108397/composite BHP +0.67% /zigman2/quotes/201448516/delayed AU:BHP -1.25% dropped 0.8%, gold miner Newcrest Mining Ltd. /zigman2/quotes/203840223/delayed AU:NCM +1.27% /zigman2/quotes/203286036/delayed NCMGY +3.36% tumbled 5.3% and Oil Search Ltd. /zigman2/quotes/204702973/delayed AU:OSH -1.08% /zigman2/quotes/205045633/delayed OISHY +3.48% lost 0.8%.
A weakened Australian dollar /zigman2/quotes/210560947/realtime/sampled AUDUSD 0.0000% , which recently fell below parity against the U.S. currency, also damped sentiment.
“A falling Australian dollar may put pressure on offshore investors to sell Australian dollar-denominated assets, as they look to preserve gains from a strengthening equity market,” said Tim Radford, a global analyst at Rivkin Securities.
In Tokyo, meanwhile, the drop came despite data released earlier in the day showing the Japanese economy expanded at a better-than-expected rate of 0.9% in the January to March period from the quarter ended Dec. 31.
Banking stocks led the drop even after the country’s three largest banks posted strong results, with the Nikkei newspaper reporting that their combined net profit for the fiscal year ended March 31 climbed 11% due to increased lending and upbeat stock and bond markets.
Shares of Sumitomo Mitsui Financial Group Inc. /zigman2/quotes/203656770/delayed JP:8316 +0.48% /zigman2/quotes/206471416/composite SMFG -0.17% dropped 4%, Mitsubishi UFJ Financial Group Inc. /zigman2/quotes/207520099/delayed JP:8306 +1.16% lost 3.6% and Mizuho Financial Group Inc. /zigman2/quotes/204507985/delayed JP:8411 +1.23% /zigman2/quotes/200950467/composite MFG +1.88% shed 3.1%.
Some exporters also weakened as the yen /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0123% firmed up against the U.S. dollar. NEC Corp. /zigman2/quotes/205173342/delayed JP:6701 +0.83% /zigman2/quotes/203814274/delayed NIPNF +7.17% and Komatsu Ltd. /zigman2/quotes/204002437/delayed JP:6301 +1.58% /zigman2/quotes/206435044/delayed KMTUF +0.14% fell 0.4% each.