TRADING

Asian stock markets rise

04-11-2009 | AP

Investors confidence will be tested next week as a number of high profile banks report first quarter earnings

Panama Star NEW YORK. Asian stocks finished mostly higher Friday in holiday-thinned trading, extending big gains logged in markets around the world the previous day as investors' newfound confidence in the economy grows.

Key stock market indicators gained 0.5 percent in Japan, 1.5 percent in South Korea, 2.7 percent in Shanghai and 1.2 percent in Thailand. Russia's RTS index rose 0.9 percent.

Trading was quiet as stock markets in the United States, Britain, Germany, France, Australia and New Zealand were closed for Good Friday. Exchanges in Hong Kong, India, Indonesia, Singapore and the Philippines were also closed. Oil markets were also closed.

Most markets reopen on Monday, but European markets are closed until Tuesday.

The gains in Asia appeared to be driven by the big advance Thursday in the United States where a major bank, Wells Fargo & Co., said it expects to report a big profit for the first quarter. That sparked a rally in US financial stocks which have been beaten down in recent quarters by huge write-downs related to rising loan defaults and the recession.

US investors viewed the Wells Fargo forecast as a sign that troubles in the country's ailing financial industry may be nearing an end.

But that will likely be tested next week as a number of high-profile banks, including Goldman Sachs Group Inc., JPMorgan Chase & Co. and Citigroup Inc., are set to report first-quarter earnings.

The stability of the industry is of particular concern for investors who believe that an economic recovery hinges on healthy banks. Global markets made big gains in March, and are continuing to show signs of strength.

Increasingly better economic data, combined with government efforts around the world to end the global recession, have fueled hope that the economy may be turning a corner. Stocks usually start to recover about six to nine months before the economy.

However, many analysts contend that the earnings reports from US companies pouring in over the next few weeks could upset the recent advance in stocks if they show more signs of pain in the economy.

In Japan, the Nikkei 225 stock average gained 48.05 points, or 0.5 percent.

After trading closed, Japanese Prime Minister Taro Aso unveiled a new stimulus package, calling for 15 trillion yen ($150 billion) in government spending to lift the world's second-largest economy from its painful recession.