Asian Market Daily Briefing

Asian markets closed mixed on Thursday, as investors weighed the impact of higher oil prices and commodities on inflation and an economic recovery. Profit taking after recent gains and negative cues from Wall Street overnight also affected investor sentiment.

After briefly breaking above the 10,000-mark for the first time in eight months, the benchmark for the Japanese market, the Nikkei 225 index, closed at 9,981, down 10 points or a modest 0.1%. Meanwhile, the broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 4 points or 0.39% to 941, its highest closing since November 5. While iron and steel, precision machinery and securities stocks ended with notable gains, insurance, pulp and paper and mining stocks led the decliners.

Steel maker Kobe Steel and Nippon Steel jumped over 5% each and JFE Holdings advanced 3.72% on hopes of improved demand in China and other emerging markets. Defensive stocks in the telecom, railways and insurance sectors such as KDDI, Softbank Corp, Tokio Marine and East Japan Railway Co. ended in the red, as investors shifted their portfolios in favor of cyclical stocks. Trend Micro, a maker of computer anti-virus software, tumbled 4.72% after Microsoft said on Wednesday that it was getting ready to unveil a free anti-virus service for personal computers.

In economic news, the gross domestic product in Japan contracted by 3.8 percent in the first quarter compared to the previous three months, the Cabinet Office said on Thursday in its final report. That was slightly better than the record preliminary reading of -4.0 percent, at which analysts expected GDP to hold steady. GDP saw a 3.8 percent quarterly decline in Q4 of 2008.

China's Shanghai Composite index snapped a 3-day rally to finish at 2,797, down 19 points or 0.67% amid profit taking and mixed economic reports. Decliners in the Shanghai market outnumbered gainers by 528 to 282, while 44 closed unchanged. While banking, auto and property stocks ended with notable gains, stocks of securities firms and property developers ended lower.

On the economic front, China posted a trade surplus of $13.39 billion in May, the General Administration of Customs said on Thursday, below expectations for a surplus of $14.9 billion.

The Australian market closed at a fresh 2009 high, led by miners and energy stocks. The benchmark S&P/ASX200 index closed at 4,047, up 23 points 0.57% and the broader All Ordinaries index rose 31 points or 0.8% to 4,047.

Among big miners, Rio Tinto jumped 5.67%, its rival BHP Billiton rose 1.46% and Illuka Resources surged up 6.84%. Fortescue Metals Group climbed 19.22% amid speculation of Chinese buying interest, even as the iron ore miner said it cannot explain why its shares have almost doubled since early this month. OZ Minerals was in a trading halt and BlueScope Steel gained 2.18%. Gold and banking stocks ended mixed.

Australia's unemployment rate increased in May to 5.7 percent, according to data released Thursday by the Australian Bureau of Statistics. The figure was an increase of 0.2 percentage points compared to the April jobless rate.

South Korea's benchmark KOSPI ended a volatile session up by 5 points or a modest 0.32% at 1,419 amid the simultaneous expiry of June futures and options contracts. Volume was at 478.3 million shares worth 6.88 trillion won and advancers outnumbered decliners by 433 to 361.

Steel makers rose after Brazilian mining giant Vale agreed to cut iron ore prices and construction and engineering stocks advanced on reports about new order receipts, while airline stocks fell due to higher crude oil prices.

The Indian market was in a consolidation mode after a 2-day rally, as investors took profits following a massive 90% rise in the benchmark indexes since its March lows. The BSE Sensex ended at 15,411, down 55 points or 0.36%.

Among the other markets in the region, while Singapore's STI Straits Times index fell 0.39%, Taiwan's TWII Weighed index rose 1.63% and Hong Kong's Hang Seng index ended up 0.03%.