By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Financials pulled Hong Kong and Australian stocks higher Thursday, lifted by strong earnings reported by a handful of major banks, while Tokyo and Shanghai ended lower as resources-related shares turned weak after a drop in commodity prices.
Trading volumes were modest in several regional markets as investors looked ahead to the Federal Reserve’s policy meeting next week. There is now growing anxiety among investors that the extent of monetary easing by the U.S. central bank could be smaller than previously anticipated.
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The world famous Taj Mahal is undergoing a "mud-pack" cleanup ahead of the rumored visit of the Obamas and the Sarkozys. Video courtesy of Reuters.
“In the past two months, markets had been running ahead of themselves in expecting too much from the Fed. Then again, exaggerating expectations is part of the price discovery process that often accompanies a policy event risk,” said Phillip Wee at DBS Group Research in Singapore.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +0.74% fell 0.2%, South Korea’s Kospi eased 0.1% and China’s Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.58% gave up 0.2%.
Among the markets that gained ground, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.32% and Taiwan’s Taiex added 0.8% each, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.89% ended 0.2% higher and India’s Sensex rose 0.7% in afternoon trading.
Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.56% futures suggested a modestly higher open for Wall Street. See more about higher U.S. stock futures in a busy session for corporate earnings.
Strong earnings reports boosted bank stocks in Sydney and Hong Kong.
Shares of Australia & New Zealand Banking Group /zigman2/quotes/205482049/delayed AU:ANZ +1.16% /zigman2/quotes/203732563/composite ANZBY -0.19% added 2.9% after the company posted a 53% surge in full-year net profit to 4.5 billion Australian dollars ($4.34 billion).
Earnings also helped shares of Agricultural Bank of China /zigman2/quotes/200705246/delayed HK:1288 -0.69% rise 0.3% and Bank of China /zigman2/quotes/204682472/delayed HK:3988 -1.33% /zigman2/quotes/201568493/composite BACHY -0.10% gain 2.2% in Hong Kong, as AgBank’s third-quarter profit surged 30% and Bank of China posted a 29% increase in profit.
Resource stocks mostly declined, playing off Wednesday’s pullback in oil and other commodity prices.
Inpex Corp. /zigman2/quotes/206936121/composite IPXHF -7.08% /zigman2/quotes/206689846/delayed JP:1605 +3.12% fell 1.3% and trading house Marubeni Corp. /zigman2/quotes/210513544/composite MARUY +0.33% /zigman2/quotes/202870197/delayed JP:8002 +1.06% lost 1.5% in Tokyo, as PetroChina Co. /zigman2/quotes/205108732/composite PTR +2.16% /zigman2/quotes/204979431/delayed HK:857 +0.52% shares sank 0.5% in Hong Kong and Sterlite Industries /zigman2/quotes/205002590/composite SLT -0.14% dropped 1.2% and Cairn India fell 0.8% in Mumbai trading.
In Shanghai, Jiangxi Copper Co. /zigman2/quotes/201334192/delayed CN:600362 -0.89% /zigman2/quotes/204256025/composite JIXAY +11.20% lost 1.6% and Zijin Mining Group /zigman2/quotes/203833875/delayed CN:601899 -1.43% /zigman2/quotes/209836076/composite ZIJMF -1.57% surrendered 2.3%.
In Sydney, however, a firm Australian dollar helped supported leading material stocks BHP Billiton /zigman2/quotes/208108397/composite BHP -0.19% /zigman2/quotes/201448516/delayed AU:BHP -1.14% , up 1.2%, and Rio Tinto /zigman2/quotes/202627887/composite RIO -0.34% /zigman2/quotes/200083756/delayed AU:RIO -0.52% , up 1.8%.
Wariness for risk
In Tokyo, commodity-related sectors overpowered gains in shares of a handful of companies such as Canon Inc. after they posted strong quarterly results.