World markets mixed after weakness on Wall Street

[March 25, 2009]  HONG KONG (AP) -- World stocks were mixed Wednesday as overnight weakness on Wall Street and a record plunge in Japanese exports prompted investors to reassess the recent surge in global markets.

Several Asian markets fluctuated throughout the day and European shares were little changed, with the dollar falling against the yen and crude oil prices easing after rising strongly the day before. Mainland Chinese stocks paused after a seven-day climb.

As in the U.S., where markets pulled back after a huge rally Monday, global investors were re-examining the Obama administration's plan to pair taxpayer and private money to help banks wipe clean up to $1 trillion in bad loans from their books.

In Japan, the market's mood was cautious amid fresh evidence the economic slowdown continued to decimate overseas demand for goods from the world's second-biggest economy. Government figures showed exports plunged by nearly half in February from a year earlier -- a record monthly drop.

Still, several markets in Asia were showing some resilience and trimmed some of their losses, a sign this month's advance may be taking a breather rather than fizzling altogether.

"Sentiment is a lot more positive, people are feeling a little more wealthy," said Hong Kong-based John Mar, co-head of sales trading at Daiwa Securities SMBC Co. His firm's economist welcomed the U.S. asset purchase plan as a "genuine move forward" that can help re-ignite global trade and spread recovery throughout Asia -- including heavily export-driven countries like Taiwan and South Korea -- by the fourth quarter of this year.

"It's looking like the rally has got a little more ways to go," Mar said.

As European trade got under way, Britain's FTSE 100 shed 0.4 percent, Germany's DAX was off 0.1 percent and France's CAC-40 was flat.

In Japan, the Nikkei 225 stock average dipped 8.31 points, or 0.1 percent, to 8,479.99. Hong Kong turned in Asia's worst performance as the Hang Seng sank 288.23 points, or 2.1 percent, to 13,622.11.

Weighing on the territory were losses in mainland China, where Shanghai's index retreated 46.86 points, or 2 percent, to 2,291.55, ending a seven-day rally that lifted the benchmark nearly 10 percent. The market was dragged down by declines in financial and nonferrous metal shares.

On the upside, South Korea's Kospi rose 0.5 percent to 1,229.02, while Australia's key index rose 0.8 percent. Taiwan's market jumped 2 percent and India's Sensex gained 2.1 percent to 9,667.9.

In stocks, Japan's Sanyo Electric Co. fell 1.4 percent after saying Tuesday that it expects a group net loss of 90 billion yen ($918 million) for the business year ending this month, far worse than its previous projection that it would break even.

But the country's automakers moved higher despite the dismal trade data. In particular, motor vehicle exports plummeted 64 percent, with those to the U.S. down 71 percent. Toyota Motor Corp. gained 1.3 percent, while Mitsubishi Motors Co. jumped 5.7 percent.

Asia and Europe's mixed showing came after Wall Street gave back some the gains posted during Monday's staggering advance. But U.S. futures pointed to a modest rebound after President Barrack Obama declared signs of progress as his administration attacks the economic crisis "on all fronts" in hopes of ending the country's deepest downturn in decades. S&P futures gained 3.2 points, or 0.4 percent, to 806.60.

On Tuesday, the Dow fell 115.89, or 1.5 percent, to 7,659.97, fluctuating throughout the day. Broader stock indicators also tumbled, with the Standard & Poor's 500 index off 16.57, or 2 percent, to 806.35.

Oil prices declined in Asia, with benchmark crude for May delivery down $1.12 to $52.87 a barrel.

The dollar weakened to 97.66 from 98.22 yen late Tuesday, while the euro rose to $1.3506 from $1.3473.

[Associated Press; By JEREMIAH MARQUEZ]

AP writer Tomoko A. Hosaka in Toyko contributed to this report.

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