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Asian Shares Rise As PMI Data Eases Slowdown Fears

Asian shares rose across the board on Wednesday, as surveys pointing to signs of growth in American and Chinese manufacturing soothed recent worries about the global economic outlook.

Investors now look forward to the second round of the French presidential vote and elections for Greek elections, due this weekend, as well as the U.S. Labor Department's nonfarm payrolls report on Friday morning for clues to near-term market outlook.

Commodities eased and the U.S. dollar traded firm against the euro after San Francisco Fed president John Williams joined his counterparts from Richmond, Philadelphia and Atlanta in casting doubt on the need for additional bond buying by the Federal Reserve.

Tokyo stocks rebounded from a two-and-a-half month closing low, with a solid finish on Wall Street overnight and gains among Asian peers boosting sentiment. But the buying was somewhat limited due to caution ahead of the Golden Week holiday period. The Nikkei average rose 0.3 percent, while the broader Topix index added 0.4 percent. Toyota Motor rose half a percent after industry data showed the firm's U.S. sales rose 11.6 percent in April.

The yen weakened for a second day, lifting Nissan Motor up 0.8 percent and Honda Motor up 0.7 percent. Nickel smelter Sumitomo Metal Mining rose half a percent, property developer Mitsui Fudosan advanced 1.6 percent and non-life insurer Tokio Marine Holdings added 1.9 percent amid improvement in sentiment on the outlook for the U.S. economy.

Japan Tobacco jumped 2.4 percent on reports that the cigarette maker will raise its dividend payout. Sharp tumbled 4.3 percent, extending declines for a second consecutive session, on concerns about its medium-term earnings.

China's Shanghai Composite index rallied 1.8 percent to end at its highest level in seven weeks, led by brokerages after the China Securities Regulatory Commission said it would reduce transactions fees for yuan-denominated shares by 25 percent starting June 1. Investors also cheered encouraging manufacturing data which suggested further improvement in the economy. Hong Kong's Hang Seng index ended up a percent.

A survey of purchasing managers by HSBC showed China's manufacturing contracted for a sixth month in April, but the pace of deterioration in manufacturing activity had slowed following a difficult first quarter.

The final HSBC China Manufacturing Purchasing Managers Index rose to 49.3 in April compared with 48.3 in March, marking its first rise in the index since February. However, the findings continued to show marked divergence from the official survey, which pointed to stronger growth in manufacturing last month.

Australian shares ended little changed, as gains in miners offset weakness in the banking sector. Global miners BHP Billiton and Rio Tinto rose 0.8 percent and 0.9 percent, respectively, after upbeat U.S. manufacturing data and signs of bottoming out in China's manufacturing sector soother fears the global economy was slowing.

Brambles rose 2.1 percent after the pallet provider posted a 28 percent rise in nine-month sales and said it is on track to meet its full-year profit guidance. The benchmark S&P/ASX 200 edged up 0.1 percent to a fresh eight-month high, while the broader All Ordinaries index gained 0.2 percent.

Energy stocks also gained ground, with Origin Energy rising 1.7 percent after it signed a deal to supply gas to a joint venture of major energy suppliers. Woodside Petroleum gained 1.3 percent and Santos added 0.9 percent, but Oil Search slipped 0.4 percent. Financial shares eased, with the big four banks losing between 0.3 percent and 0.8 percent after ANZ reported shrinking margins in its Australian business and National Australia Bank lowered its mortgage rates by 32 basis points.

South Korea's Kospi average ended 0.9 percent higher, as data showing improving manufacturing activity in the world's two biggest economies boosted the outlook for exports. The benchmark index briefly climbed above the 2,000 mark for the first time in two weeks before ending a tad lower at 1,999.

Shares of polysilicon-maker OCI soared 9.1 percent on speculation industry oversupply may ease after Chinese solar module manufacturer LDK Solar said it cut its workforce by more than 5000 this year. Hyundai Engineering & Construction jumped 5 percent on a report that it has almost secured a 4 trillion won ($3.5 billion) deal to expand and modernize an oil refinery in Venezuela.

New Zealand shares rose sharply, lifting the benchmark NZX 50 index up 1.1 percent to its highest level since May 2008, as investors were lured to high-dividend paying stocks. Phone company Telecom, which has a dividend yield of over 11 percent, rose 0.4 percent, while electricity generator and retailer TrustPower, which offers respectable dividend yield of 8.2 percent, gained 1.4 percent.

Online auction site Trade Me rallied 3.8 percent to a record high, Fletcher Building, the nation's largest construction company, advanced 2.7 percent and Auckland International Airport, the country's busiest gateway, added 1.8 percent. Pyne Gould Corp rose 3 percent after the company appointed a former Australian journalist as an independent director to meet the NZX requirement to have two independent directors. Heartland New Zealand, the would-be bank, led the decliners on the exchange, falling 5.1 percent.

Elsewhere, India's benchmark Sensex was last trading up 0.3 percent, Indonesia's Jakarta Composite index gained 0.6 percent, Malaysia's KLSE Composite rose 0.8 percent, Singapore's Straits Times was up 0.8 percent and the Taiwan's Weighted average climbed 2.3 percent.

On Wall Street, stocks posted solid gains on Tuesday after a report from the Institute for Supply Management showed that activity in the U.S. manufacturing sector unexpectedly expanded at a faster rate in April. Investors, meanwhile, shrugged off a flat reading on construction spending, with spending increasing just 0.1 percent in March compared to expectations for a 0.5 percent increase.

The Dow rose half a percent to finish the session at its best closing level in over four years, while the tech-heavy Nasdaq edged up 0.1 percent and the S&P 500 gained 0.6 percent.

by RTT Staff Writer

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