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Asian Shares Mostly Higher On Solid U.S., China Data

4/3/2012 5:01 AM ET

Asian shares ended mostly higher on Tuesday, as better-than-expected U.S. manufacturing and China's non-manufacturing PMI data eased worries over global economic growth. Trading volumes, however, continued to remain thin as the Chinese market was closed for a public holiday and investors awaited U.S. factory orders numbers due later in the global day, as well as Friday's employment report.

Commodities traded mixed, with crude futures down half a percent following a 2 percent rally overnight, while copper extended overnight gains, buoyed by signs of strength in the world's two biggest economies.

A day after China's official PMI showed a surprise surge in manufacturing activity, data released today showed expansion in the nation's non-manufacturing sector as well, with the corresponding PMI climbing to a six-month high of 58 in March from 48.4 in the previous month.

Japanese shares retreated as the yen's return to strength prompted investors to take profits in export-linked shares. Honda Motor slipped 0.3 percent, Canon edged down 0.4 percent, Mazda Motor lost 2.1 percent, Panasonic declined 1.8 percent and Sony shed 0.6 percent. Both the Nikkei average and the broader Topix index ended down about 0.6 percent each.

The yen climbed to a three-week high against the dollar and the euro was also under pressure, as weak eurozone manufacturing data and lingering fears that Spain may be pushed into an international financial bailout intensified worries over the European economy.

Sharp Corp. fell 1.3 percent, extending declines for a third consecutive session, as German solar-cell maker Q-Cells's filing for insolvency yesterday increased concerns about industry outlook. The real estate sector, which outperformed the broader market in the first quarter, succumbed to profit-taking, with Sumitomo Realty & Development tumbling 3.5 percent and Mitsui Fudosan closing down 2.3 percent. Among those that gained, Advantest rose 2 percent and Tokyo Electron gained 1.7 percent.

Australian shares posted modest gains, with defensive stocks outperforming in thin trading due to the holiday-shortened trading week. Telecom giant Telstra rose 1.8 percent and TPG Telecom climbed 2.2 percent. Resource stocks ended firm, with BHP Billiton rising 0.2 percent, while Rio Tinto and Fortescue added around a percent each. Aquila Resources edged up 0.2 percent after the company said it has sold its 50 percent interest in the Isaac Plains coal mine to fund a new iron ore project in Western Australia. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index ended up about 0.2 percent each.

The big four banks rose modestly, with ANZ bucking the upward trend to end 0.3 percent lower. The Reserve Bank of Australia today kept official interest rates on hold for another month, but has flagged a likely rate cut as early as next month, saying the forthcoming key data on prices will be crucial in determining its next policy moves.

Retailers ended mixed, with Woolworths and Wesfarmers adding less than half a percent each, while Myer lost 1.8 percent and JB Hi-Fi dropped 0.9 percent after data showed Australian retail sales grew a seasonally adjusted 0.2 percent in February from the previous month. Metcash slumped 4.7 percent after the grocery wholesaler unveiled plans to shed nearly 10 percent of its workforce as part of its business restructuring to cope with difficult trading conditions.

South Korea's Kospi average rose one percent to a two-week high, as signs of recovery in the world's largest economy gave a fillip to investor confidence. Automakers paced the gains, with Hyundai Motor climbing 6.3 percent after reporting an 18 percent rise in March sales. Shares of its affiliate Kia Motor jumped 3.4 percent.

Memory chip maker Samsung Electronics rose 2.8 percent to another record high after the memory chip maker unveiled plans to to invest $7bn in China as part of its move to diversify production. Economy-sensitive shipbuilders such as Hyundai Heavy, Samsung Heavy Industries and Daewoo Shipbuilding rose 2-3 percent on receding worries over a hard landing in China.

New Zealand shares fell for a second consecutive session, as investors cashed in recent sharp gains awaiting further clarity on global growth outlook. Shares of Fletcher Building, the nation's largest construction company, fell 2.4 percent, Chorus, the networking division spun off from Telecom in November, tumbled 3.3 percent and online auction site Trade Me shed 0.9 percent.

Warehouse Group, the biggest retailer on the benchmark index, fell 4.3 percent and Ebos Group, the medical equipment and pet supplies company, lost 1.5 percent as they went ex-dividend. Restaurant Brands led the gainers on the exchange, climbing 2.7 percent after the fast food franchise operator said it was looking to hold its profitability despite a tough trading environment.

Elsewhere across Asia, India's benchmark Sensex was last trading up 0.9 percent, Indonesia's Jakarta Composite index climbed 1.5 percent, Malaysia's KLSE Composite was up 0.2 percent and Singapore's Straits Times added 0.3 percent, while the Taiwan Weighted average fell 1.3 percent.

On Wall Street, stocks rebounded after an early setback overnight as traders reacted positively to the latest U.S. manufacturing data. But, construction spending in the U.S. unexpectedly fell in February, with revised January figures also showing a much larger than previously reported decline, the Commerce Department said. The Dow rose 0.4 percent, the tech-heavy Nasdaq climbed 0.9 percent and the S&P 500 gained 0.8 percent.

by RTT Staff Writer

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