Asian Stocks End Higher; Nikkei Gains 1.4%

By Jeremiah Marquez

HONG KONG -- Asian stocks ended higher Thursday, but trading was cautious amid gnawing worries about banks after Morgan Stanley (MS Quote) reported worse-than-expected results.

A number of Asian bourses fluctuated and volumes were lackluster. Automakers helped lead the broader market, crude oil prices were flat and the dollar steadied against the yen after a morning fall.

News of U.S. investment firm Morgan Stanley's disappointing quarterly report rattled many investors already nervous about the U.S. government's upcoming "stress tests" of banking health. Reports that Nomura Holdings(NMR Quote), Japan's leading brokerage, has incurred a record net loss of 700 billion yen ($7 billion) in the last fiscal year also weighed.

Analysts said the markets were due for a technical recovery after falling sharply earlier this week. In Japan, an analyst upgrade helped boost automakers like Toyota(TM Quote) and Mazda.

Despite the gains, some investors have begun looking for reasons to book profits following a six-week rally, a shift in sentiment that could lead to declines in the near term, analysts said.

"People are starting to get nervous and we're going to see people starting to take money off the table," said Andrew Orchard, Asian strategist for Royal Bank of Scotland in Hong Kong. "Most investors still have concerns about the economy, and I don't think many are ready to believe we're in the next phase of a bull market."

European stocks were lower in early trading. Britain's FTSE 100 lost 0.3%, Germany's DAX shed 0.8% and France's CAC-40 was off 0.6%. Wall Street futures suggested a higher open in the U.S. on Thursday.