Bank Shares Slip, Commodities Rise

Asian markets headed into the weekend on a mixed note Friday, with financial stocks sagging after a pullback on Wall Street, while a surge in commodity prices overnight boosted resource stocks across the region.

With Japanese markets closed for a holiday and Dow Jones Industrial Average futures pointing lower, some of the recent euphoria over the U.S. Federal Reserve's decision to buy longer-dated Treasurys was replaced by caution.

"Traders are left wondering whether these steps are being taken because the Fed fears the ongoing slowdown could be even worse than currently expected - and they are getting their retaliation in first," said IG Index Chief Market Strategist David Jones.

"There is definitely a feeling around stock markets at the moment that the recent momentum has waned and we are back into wait-and-see mode."

Australia's S&P/ASX 200 fell 0.4%, Taiwan's Taiex lost 1.5% and Hong Kong's Hang Seng Index declined 2.3% to 12833.51.

Among gainers, China's Shanghai Composite rose 0.7% and South Korea's Kospi added 0.8%. India's Sensex fell 0.4% while Singapore's Straits Times gained 0.8%.

Elsewhere in Southeast Asia, the Malaysian index rose 0.5%, Indonesian shares gained 1.5%, Philippine stocks rose 3% and Thailand's SET Index ended 0.5% higher.

For the week, the Shanghai Composite finished with solid gains of more than 7%, while Japan's Nikkei 225 Average gained 5% in the week to Thursday.

Some analysts had a positive outlook for the markets.

"History shows that bear markets end when monetary policy is eased aggressively and the banking system is sorted," HSBC strategist Garry Evans wrote in a report. "With further positive surprises possible and quantitative easing beginning, there seems more risk on the upside than on the downside for markets now."

In a note to clients, UBS Research global equity strategist Jeffrey Palma wrote: "Recent market moves look to us to be more related to expectations of longer-term structural growth prospects rather than near-term cyclical ones."

Financials declined as investors locked in profits after recent gains. National Australia Bank fell 2% in Sydney, Shinhan Financial Group lost 2% in Seoul and United Overseas Bank fell 0.9% in Singapore afternoon trading.

Mining and energy-related companies were buoyed by gains in prices for base and precious metals as well as crude-oil. April crude-oil futures ended above $50 a barrel and gold prices climbed sharply than 8% in New York Thursday.

Rio Tinto and BHP Billiton jumped 3% in Sydney, Korea Zinc surged 9.8% in Seoul and Cnooc added 1.2% and Aluminum Corp. of China climbed 2.3% in a downbeat Hong Kong.

Macquarie Airports tumbled 8.2% after saying passenger traffic continued to decline across its portfolio of global airports in February, with traffic at the Sydney Airport down 7.8% from a year ago.

In Shanghai, expectations of government-led infrastructure construction lifted resource stocks, with Jiangxi Copper surging 10%.

Shares of Alibaba.com plunged 12.4% in Hong Kong a day after it reported weak earnings. Citigroup downgraded the stock to a sell Friday.

Chemicals maker Nuplex Industries plummeted 52.3% in New Zealand, as trading resumed trade after it announced a 132.8 million New Zealand dollar (US$74.4 million) capital-raising through a seven-for-one rights issue.

Recent strength in the New Zealand dollar was curbing export-linked stocks, with Fisher & Paykel Healthcare down 4.4% and Rakon off 4.7%.

Currency trade was fairly quiet because of the Japanese holiday. The euro was around $1.3585, from $1.3678 late in New York. The U.S. dollar was around 95.31 yen, from 94.41 yen.

Westpac senior currency strategist Sean Callow said dollar-bearishness remained, but there would be limits to its near-term fall from here. He expected it to find support against the yen around 93.55 yen.

NabCapital senior currency strategist John Kyriakopoulos added further gains in the Australian dollar, which has been buoyed by a general return of risk appetite, may now be "harder won," with the U.S. dollar heading toward oversold levels.

April Nymex futures were recently down 87 cents on Nymex at $50.74 a barrel. Crude had gained Thursday along with other commodities on hopes the Fed's actions to unlock credit and boost economic growth would help demand for raw materials.

Spot gold reversed early declines to rise $3.50 to $962.50 a troy ounce recently, after rallying more than $30 overnight.

Concerns that aggressive quantitative easing in the U.S. would spur inflation were still supporting the metal, said HSBC analyst James Steel. Gold is often used a hedge against inflation.

Still, "it's by no means clear whether the proposed Fed actions will lead to higher inflation," Mr. Steel added.