Asian markets down as US stress tests eyed (AP) (24-04-2009)

HONG KONG (AP) -- Most Asian markets dropped Friday as investors braced for news about the "stress tests" on major U.S. banks while hopes for an economic recovery remain bogged in uncertainty.

Volumes were thin, suggesting investors are hesitant to place large bets one way or the other without clearer signs about the prospects for the economy and company results. Crude oil prices and the dollar weakened.

As in the U.S., earnings in Asia sent mixed signals.

South Korea's Samsung Electronics reported a massive drop in profit that, while better than forecast, still underlined the toll slumping demand is having on the region's major companies. But results from other Asian firms, including insurance giant China Life, were more upbeat.

Investors were also treading cautiously ahead of news about Washington's stress tests, which will determine whether the country's biggest banks have enough capital to withstand severe loan losses during the recession. The Federal Reserve is expected to explain its methodology for the tests on Friday and release results on May 4.

Japan's Nikkei 225 stock average lost 139.02, or 1.6 percent, to 8,707.99, and Hong Kong's Hang Seng shed 66.14 points, or 0.4 percent, to 15,148.3.

South Korea's Kospi was off 1.1 percent at 1,354.10. The Korean economy, Asia's fourth largest, narrowly avoided slipping into recession in the first quarter as government pump priming offset a slump in exports, but officials still predict a contraction for the full year.

Markets in Australia, China and Singapore also fell. But India's Sensex was up 0.3 percent.

Tech stocks were battered after South Korea's Samsung Electronics, the world's biggest manufacturer of computer memory chips, said net profit plunged 72 percent in the first quarter, showing more fallout from sharply lower consumer spending worlwide. Its shares fell 5.6 percent. In Japan, chipmaker Elpida memory tumbled 9.8 percent.

Shares in Asian automakers were also a wreck as struggling U.S. car company Chrysler rushed to devise a restructuring plan before a government deadline. The Treasury Department is preparing a Chapter 11 bankruptcy filing for the company, according to a New York Times report.

In Tokyo, Toyota shifted down a gear, falling 1.3 percent, and Nissan reversed 4.1 percent. Hyundai skidded 2.8 percent in Seoul.

Traders looking to the U.S. found little direction after Wall Street finished another back-and-forth session with modest gains.

The Dow finished up 70.49, or 0.9 percent, to 7,957.06, making up most of Wednesday's loss of 83 points. The Standard & Poor's 500 index rose 8.37, or 1 percent, to 851.92.

But Wall Street was poised to head lower again as U.S. futures declined. Dow futures fell 58 points, or 0.7 percent, to 7,857 and S&P 500 futures slipped 4.9, or 0.6 percent, to 843.80.

Source: AP