Asian shares rose broadly on Tuesday on speculation many of the central banks across the world would join the Reserve Bank of Australia in cutting rates, responding to a weakening global environment.
Investors also looked ahead to emergency talks by the G7 finance ministers later today, the ECB meeting tomorrow and Fed Chairman Ben Bernanke's congressional testimony on Friday for clues on their responses to the global downturn.
Stocks held steady with no major fireworks, as disappointing factory orders report from the U.S. and lingering uncertainty surrounding Europe kept investors in a cautious mood.
Commodities such as copper and crude erased early gains and the euro fell from a one-week high on concerns the European debt crisis may worsen after data showed Euro area services and manufacturing output contracted in May for a fourth month.
Standard & Poor's said that it sees a one in three chance that Greece will exit the eurozone shortly after national elections are held in mid June. However, a Greek exit from the euro would likely discourage other ailing sovereign states from following suit, the agency said.
Japan's Nikkei average rose a percent, snapping a four-day losing run, as investors pinned hopes on the G7 and ECB meetings for possible relief to the European debt crisis. The broader Topix index finished 1.8 percent higher. Heavyweight Fast Retailing tumbled 8.8 percent, limiting the market rebound to some extent. Shares of the clothing retailer lost ground after the company said same-store sales at its domestic Uniqlo chain of casual clothing stores fell about 10 percent in May from a year earlier.
Among the prominent gainers, export-oriented companies such as TDK, Fujitsu and Advantest rose 4-6 percent, encouraged by a slight moderation in the yen's strength. Canon advanced 3.4 percent as it announced plans to buy back up to 50 billion yen worth of its own shares, equivalent to 1.4 percent of shares outstanding excluding treasury stock.
Realtor Mitsui Fudosan rallied 3.7 percent, trading house Mitsubishi Corp added 2.5 percent and construction machinery maker Komatsu gained 2.8 percent. Nippon Sheet Glass soared 9 percent on reports that it may announce a restructuring plan in July.
China's Shanghai Composite index posted a modest 0.2 percent gain, with worries about the outlook for the domestic economy limiting further upside. Hong Kong's Hang Seng index rose 0.4 percent, snapping a four-day losing streak.
Australian shares posted solid gains after the Reserve Bank of Australia cut interest rates by 25 basis points, as expected, to bolster investor confidence severely hit by weak U.S. data and Europe's debt crisis. The benchmark S&P/ASX 200 rose 1.5 percent, paring the previous session's 2 percent loss, with banks pacing the gains. NAB rallied 2.4 percent and ANZ rose 2.2 percent, while Commonwealth and Westpac ended up about 1.9 percent each.
Miners BHP Billiton, Rio Tinto and Fortescue added 1-5 percent, reflecting gains in copper and other industrial metals after media reports said the European Commission and French officials are in favor of a rescue package for the euro zone's struggling banks. Oil & gas producer Woodside Petroleum and Santos jumped around 4 percent each as crude prices traded higher for a second consecutive session in early Asian trading Tuesday.
Among those that fell, Qantas plunged 18.7 percent to a record low after the airline issued a massive profit downgrade of as much as 90 percent, blaming deteriorating global conditions and soaring fuel costs.
Seoul shares snapped a four-day losing streak on hopes for a potential deal to end Europe's fiscal woes. The Kospi average rose 1.1 percent to end above the psychologically important 1,800-point level. LG Electronics soared 4.7 percent, snapping five days of losses, while SK Hynix and Samsung Electronics added about half a percent each.
Battered resource stocks rallied, with S-Oil rising 1.7 percent and SK Innovation climbing 2.8 percent, as crude prices held on to overnight gains. Airline Korean Air and Asiana Airlines jumped 4-5 percent on hopes for a significant decline in jet fuel costs.
New Zealand shares lost ground, defying a regional uptrend, as heavyweight Telecom slumped on talk of rivals Telstra and Vodafone consolidating their local units. Telstra has confirmed in a statement to the NZX that it was in discussions with Vodafone New Zealand over the possible sale of Telstra's New Zealand subsidiary, TelstraClear, to Vodafone, dragging Telecom shares down a whopping 4 percent. The benchmark NZX-50 index slid 0.9 percent.
Fisher & Paykel Appliances paced the declines on the exchange, falling 5.6 percent as the kiwi dollar rebounded from its recent lows. Gold miner OceanaGold jumped 11 percent, mirroring gains in the previous metal ahead of an emergency G7 meeting to discuss Europe's debt crisis. Nuplex Industries rose 0.9 percent after the specialty chemicals maker forecast its 2012 earnings to be in line with 2011 results.
Elsewhere, India's benchmark Sensex was last trading up 0.3 percent, while Indonesia's Jakarta Composite index rose 1.7 percent, Malaysia's KLSE Composite edged up 0.3 percent, Singapore's Straits Times gained half a percent and the Taiwan Weighted average advanced 1.5 percent.
On Wall Street, stocks struggled for direction before ending on a mixed note overnight, as traders expressed uncertainty about the outlook for the markets following last Friday's sell-off coming on the heels of weaker than expected jobs data.
Meanwhile, investors largely shrugged off a Commerce Department report showing an unexpected drop in new orders for U.S. manufactured goods. The Dow edged down 0.1 percent, while the tech-heavy Nasdaq rose half a percent and the S&P 500 edged up marginally.
by RTT Staff Writer
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