By V. Phani Kumar, MarketWatch , Shri Navaratnam and Wei-Zhe Tan HONG KONG (MarketWatch) — Asian equity markets advanced Tuesday, with South Korean shares ending at their highest level in more than three years as Hyundai Heavy Industries led shipbuilders higher on a big new order. Metal and energy shares also advanced across the region as a weakened U.S. dollar boosted commodity prices. Japan’s Nikkei Stock Average (JP:NI225 10,317, +22.88, +0.22%) and Australia’s S&P/ASX 200 (AU:XJO 4,767, +9.74, +0.21%) each climbed 0.2%, Taiwan’s Taiex ended flat and South Korea’s Kospi (XX:$SEU 1,997, +10.45, +0.53%) advanced 0.6% to 2,009.05 — its first finish above 2,000 points since November 2007. Hong Kong’s Hang Seng index (HK:HANGSENG 23,431, +113.58, +0.49%) added 0.5%, while China’s Shanghai Composite (CN:SHCOMP 2,927, +4.12, +0.14%) climbed 0.1%, after weaving in and out of losses in the wake of Monday’s 2.9% jump. “The market’s sharp gains yesterday were driven by pent-up demand following milder-than-expected policy tightening [by China’s central bank],” said Zhuo Xiangyu, an analyst at China Securities Information. “But many people are still concerned about potential further policy tightening in the near term, so [overall] the investment [mood] tends to be rather cautious.” Beijing raised banks’ reserve requirement ratio by 0.5 percentage point Friday, but refrained from an interest-rate increase despite a sharp increase in monthly inflation. The restraint in tightening, in addition to boosting Shanghai-traded stocks, also helped to support commodity prices and stocks on Wall Street overnight. Dow Jones Industrial Average (DJIA 11,429, +18.24, +0.16%) futures were five points higher in screen trade recently. Commodity-related stocks were among the best performers in Asia on Tuesday. Newcrest Mining (AU:NCM 40.83, +0.70, +1.74%) (NCMGY 40.22, +0.77, +1.95%) rose 1.7% and Woodside Petroleum (AU:WPL 43.36, +0.61, +1.43%) (WOPEY 42.70, +0.25, +0.59%) gained 1.4% in Sydney. Inpex (JP:1605 468,000, +12,000, +2.63%) (IPXHF 5,226, 0.00, 0.00%) added 2.6% in Tokyo, Korea Zinc advanced 3.9% in Seoul and Cairn India rose 2.3% in Mumbai trading. Shares of PetroChina (HK:857 10.00, +0.06, +0.60%) (PTR 129.33, +1.75, +1.37%) rose 0.6% and Zijin Mining Group (ZIJMF 0.96, +0.01, +0.95%) (HK:2899 7.38, +0.07, +0.96%) added 1% in Hong Kong, while Jiangxi Copper (JIXAY 128.55, -0.96, -0.74%) (HK:358 25.15, +0.05, +0.20%) added 1% in Shanghai. “Gold is back above the $1,400 level again, so this could cheer the mining sector, while the conservative measures in Beijing over policy tightening are again helping fuel crude’s move higher and a sustained breach of the $90 market would be the next big level,” said Ben Potter, market strategist at IG Markets. Spot gold prices stayed above the $1,400 per troy ounce in Asian trading, and were recently at $1,403.20, up $8.70 from their New York closing level Monday. January Nymex crude-oil futures were up three cents at $88.64 per barrel on Globex. Shipbuilding stocks jumped in Seoul after Hyundai Heavy Industries said it received a $1.45 billion order from German liner Hapag-Lloyd AG to build four container ships.

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