A bounce in the U.S. dollar lifted some Asian stock markets on Friday, while crude oil sank further from its recent $120 a barrel record, dragging energy firms down but boosting airline counters.
Data on Thursday showing signs of resilience in the U.S. labor market and weak German business sentiment boosted the dollar, which held its gains in early Asian trade. Signs of of a sound dollar and U.S. economy are good news for Asia's exporters, who count on strong demand for their products, and for investors, who have been nervously watching for any fresh omens of the U.S. economy slowing further.
Crude oil retreated to under $116 a barrel, as the stronger dollar ignited a selloff and investors shifted cash to equities, but concerns over supply disruptions limited losses.
Airline shares such as Hong Kong's Cathay Pacific, Singapore's SIA and South Korea's Korean Air Lines rebounded after crude oil receded further from its recent record high, but stocks in general are benefiting from a solid performance on Wall Street. The Dow Jones Industrial Average rose 0.67 percent on Thursday to end at 12,848.95 its highest close since early January.
The Nikkei 225 Average rose 2.4 percent to hit a two-month closing high, propelled up as Canon and other exporters gained as the yen retreated, while Japanese government bond futures plunged. Banks such as Mizuho Financial Group surged on growing confidence in their New York peers, while a torrent of short-covering helped lift the overall market.
South Korea's KOSPI rose 1.41 percent to a new 14-week
closing high led by techs, as No. 1 chipmaker Samsung Electronicsposted strong first-quarter profitlifted by buoyant performances at its handset and display units.
China's Shanghai Composite Index closed 0.7 percent lower in very heavy trade as investors took profits on the main index's 14 percent jump over the past two days. CITIC Securities, the country's biggest listed brokerage, rose its 10 percent daily limit before retreating. Turnover in Shanghai A shares was a massive 97 billion yuan (US$13.9 billion) as many investors used the market's rebound from 13-month lows this week to unload stocks. The rebound was triggered by government actions to support the market, including Wednesday's cut in the share trading tax, and many fund managers and analysts believe the index could reach roughly 4,000 points in coming weeks on the belief that a floor has been established around 3,000.
Hong Kong stocks ended 0.6 percent lower, as light profit-taking in energy and resources plays after recent sharp gains offset advances in aviation companies and Hong Kong Exchanges. Investors were also cautious ahead of a slew of earnings from companies such as China Life and China Construction Bank expected on Monday.
Singapore's Straits Times Index closed 0.6 percent higher with financials such as DBS Group and United Overseas Bank making gains. But Keppel Corp plunged over 7 percent after the firm posted lower-than-expected rise in first-quarter earnings and warned of a challenging year ahead.
Markets in Australia and New Zealand are closed for the ANZAC Day holiday. They will reopen on Monday.