WSJ: Asian Shares End Higher; Resources Plays Advance
SINGAPORE (Dow Jones)--Asian stock markets ended on a positive note Wednesday as resource-sector shares got a lift from a higher finish on Wall Street and a jump in commodity prices Tuesday.
Despite the region-wide advance, sentiment remained cautious ahead of European sovereign bond auctions this week. Portugal is due to auction 2014 and 2020 bonds on Wednesday, Spain is auctioning 2016 bonds Thursday and Italy is due to auction 2026 government bonds on the same day.
"Tensions concerning European conditions will continue through the week," said Kenichi Hirano, operating officer at Tachibana Securities.
Japan's Nikkei Stock Average was flat, Australia's S&P/ASX 200 gained 0.3%, and South Korea's Kospi Composite rose 0.3%. Hong Kong's Hang Seng Index was up 1.5%, Taiwan's main index rose 0.4%, and the Shanghai Composite index was 0.6% higher.
Dow Jones Industrial Average futures were up 74 points in screen trade.
Resource sector shares broadly advanced on higher commodity prices, with BHP Billiton and Rio Tinto rising 1.3% each in Sydney, Aluminum Corp. of China up 1.9% in Hong Kong and 0.4% higher in Shanghai, and Sterlite Industries 4.9% higher in Mumbai.
Several energy producers advanced after February crude-oil futures rose more than 2% in New York overnight. Cnooc climbed 1.6% and PetroChina Co. rose 1.9% in Hong Kong, Cairn India climbed 3.5% in Mumbai.
February Nymex crude-oil futures were up 21 cents at $91.32 per barrel on Globex.
Chinese shares also got a lift from coal miners amid rising overseas oil prices on supply concerns and a weakened U.S. dollar. Yanzhou Coal Mining rose 2.6% and China Coal gained 0.9% in Shanghai; in Hong Kong, they added 1.8% and 2.1%, respectively.
Gains in Australian shares were capped by concerns over the impact of massive flooding in the state of Queensland.
"Everyone's waiting to see just how much damage occurs in Brisbane," said RBS Morgans investment adviser Chris MacDonald. "It's too early to make any assumptions on how the government will respond, but I think an infrastructure bond would be a good idea."
In the financial sector, Insurance Australia Group dropped 2.6% and Bank of Queensland lost 3.8%. Transport company Asciano fell 1.3% on its flood impact statement.
In Tokyo, banking shares outperformed the broader market on a general return of bullish market sentiment after the Dow Jones Industrial Average rose Tuesday for the first time in four sessions. Mitsubishi UFJ Financial Group added 3.6%, and Mitsui Sumitomo Financial Group ended up 2.7%.
"Buying appetite for banks among foreign investors is strong as they begin to price in European debt concerns," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
In Seoul, heavyweight technology stocks and construction plays led modest gains in a session marked by caution ahead of the Bank of Korea's policy meeting and interest rate decision Thursday.
Hynix Semiconductor jumped 3.7% and Samsung Electronics gained 1.9%, leading the technology sector higher on expectations that certain memory chip prices would bottom soon. Construction-related stocks were higher on optimism that the domestic housing market would recover this year, with Hyundai Engineering & Construction rising 4.5% and Daewoo Engineering & Construction climbing 1.1%.
In Taiwan, shares in the Ruentex group of companies were higher after AIG picked the consortium to buy its Taiwan life-insurance unit. Supermarket operator Ruentex Development rose 2.7%, cement-and-chemical-fiber maker Ruentex Industries added 4.8% and footwear maker Pou Chen climbed 3.2%.
Indian shares, meanwhile, overcame early losses and were on course to end a six-session losing streak, with software shares leading the advance on hopes for strong earnings in the quarter ended December. Tata Consultancy Services added 4.1% and Infosys Technologies rose 1.4%.
Elsewhere in the region, Malaysian shares were up 0.2%, Singapore's Straits Times Index gained 0.1%, New Zealand's NZX-50 was up 0.1%, Indonesia's share market rose 2.9%, Thailand shares gained 0.6%, while India's Sensex gained 1.8%.
In foreign-exchange markets, The risk-sensitive euro edged up against the dollar as Asian equities gained, though investors were treading carefully ahead of a closely watched government bond auction in Portugal later in the global day.
The euro was at $1.3031, compared with $1.2975 in late New York trade and at Y108.14, compared with Y108.00. The dollar was at Y82.99, compared with Y83.24.
The Australian dollar fell as low as $0.9818 before rebounding against the U.S. dollar. It was recently at $99.18.
Lead Japanese government bond futures were up 0.14 at 140.16 points, tracking the weakness in U.S. Treasurys Tuesday. The yield on the benchmark 10-year cash JGB was down 1.5 basis points at 1.170%.
Spot gold was at $1,384.20 per troy ounce, up $3.07 from its New York close Tuesday.
-Dow Jones Newswires; +65-6415-4140; markettalk@dowjones.com
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