HONG KONG — Asian stocks were mostly higher in holiday-thinned trade Friday after surprisingly upbeat earnings in the U.S., but Japanese banks tumbled on fresh worries about their balance sheets amid the country’s crippling recession.
Japan’s mega lenders got pummelled after Sumitomo Mitsui Financial Group warned investors that it sank into the red in the just-ended fiscal year. To shore up its capital position, the country’s No. 3 bank said it was moving to issue new shares.
The news contrasted sharply with financials in the U.S., where stocks surged overnight after Wells Fargo & Co. surprised the market with a hugely positive profit report. The banking giant — the recipient of some $25 billion in funds as part of the government’s bank bailout plan — said it expected to post first-quarter earnings of $3 billion, far above analyst forecasts.
With a number of high-profile banks set to unveil their first quarter earnings next week, investors were relieved by the report and took it as a sign that troubles in the country’s ailing financial industry may be nearing an end.
“The performance was better than expectations so everyone is thinking the financial sector is getting better,” said Christian Jin, who helps oversee $1.2 billion in assets as head of global investment at CJ Asset Management in Seoul. “A lot of people were worried about next week’s earnings, but with the report investors are thinking there will be no problems with the financial companies.”
Stock markets in Hong Kong, Singapore, India, New Zealand, Indonesia, the Philippines and Australia were closed for a public holiday.
In Japan, the Nikkei 225 stock average was up 26.33 points, or 0.3 per cent, at 8,942.39, with gains checked by losses among banking stocks.
Shares of Sumitomo, the smallest of Japan’s three mega banks, faced a glut of sell orders and remained untraded in the afternoon. It was set to fall more than 15 per cent, following a 16 per cent plunge overnight of its American depository receipts.
Its rivals weren’t doing much better.
Mizuho Financial Group Inc. was down more than 10 per cent, and Mitsubishi UFJ Financial Group Inc. retreated 3.1 per cent despite overall market strength.
South Korea’s Kospi climbed 19.24 points, or 1.5 per cent, to 1,335.59. Shanghai’s main index rose 2.1 per cent to 2,430.01. Markets in Taiwan and Maylasia also gained.
Toronto’s S&P/TSX composite index moved up 217.84 points to 9,187.12 on Thursday despite more big job losses last month.
Statistics Canada reported the economy shed another 61,300 jobs in March as the unemployment rate hit eight per cent for the first time in seven years. That was up from 7.7 per cent in February, carrying on an accelerating jobless tide that started in October.
In New York, The Dow rose 246.27, or 3.1 per cent, to 8,083.38.
Broader stock indicators also piled on big gains. The Standard & Poor’s 500 index rose 31.40, or 3.8 per cent, to 856.56. The Nasdaq composite index rose 61.88, or 3.9 per cent, to 1,652.54.
North American stock markets, also closed Friday, will re-open Monday along with most Asian bourses. Europe’s are closed until Tuesday.