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Asian Markets Close Mixed, Fed Uncertainties Return

CNBC.com
Friday, 20 Mar 2009 | 6:23 AM ET

Asian markets were mixed Friday, but looked set to gain for a second consecutive week -- marking their best weekly back to back gains since mid-December -- as the Fed's plan to inject a combined $1.15 trillion into the U.S. financial system improved battered confidence in the banking sector.

The Fed this week has tackled head-on the woes afflicting the world's largest economy, but the approach has also created uncertainties, mainly in the form of a weakening U.S. dollar and prospects of surging inflation once the economy starts recovering.

The greenback headed for its biggest weekly fall in 24 years on fears it will lose its status as the world's reserve currency, while oil prices ceded ground after a recent rally, but were still trading above $51 a barrel.

Japan's Nikkei 225 Average was closed today for the Spring Equinox holiday. Markets will reopen Monday. The Nikkei closed 0.3 percent lower on Thursday.

South Korea's KOSPI finished 0.8 percent higher with gains led by shipbuilders and metal issues including Korea Zinc, but falls by financials such as Shinhan Financial weighed on the index.

Australian shares closed 0.4 percent lower as investors took profits on bank shares and switched into resource stocks, spurred on by higher metal prices. Bank stocks, which rallied over the past week on positive comments from their U.S. peers, led the decline. Macquarie Group, Australia's top investment bank, slipped 4.5 percent, while National Australia Bank,
the top lender, lost 2 percent. But mining firms were boosted by firmer metal prices, with
copper rising for the sixth straight day on Thursday. BHP Billiton, the world's top miner, and Rio Tinto also rose by 3 percent.

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Hong Kong shares shed early gains to finish 2.3 percent lower as China Mobile slid after reporting its slowest quarterly profit growth in four years, while bank shares succumbed to profit taking on their recent rally. Shares in the world's largest wireless carrier were down percent after Merrill Lynch lowered its rating on the stock to neutral. A flurry of earnings reports on Thursday also triggered selling in other stocks including Alibaba which slid 8 percent after reporting a forecast-lagging drop in its fourth quarter profit.

Singapore's Straits Times Index swung into the black and closed 0.8 percent higher, with energy-related stocks such as Keppel Group and Sembcorp Marine advancing after oil prices jumped more than 7 percent in New York overnight.

China's Shanghai Composite Index also moved back into positive territory, closing 0.7 percent up. Financial and property shares were weak but oil firms were strong, apparently in response to a jump of global crude oil futures on Thursday. Heavily weighted PetroChina surged in its most active trade since at least September.