Asian stocks ended mostly higher in choppy trading on Wednesday, as gains in the U.S. and Europe overnight on hopes of more stimulus measures from the Federal Reserve and talks that the European Central Bank has resumed bond buying kept investors in a good mood.
Having said that, the looming Greek election, Fitch's warning of an impending European bank funding crunch and nervousness ahead of Italian bond auctions today and tomorrow kept gains in check.
Last night, Spanish government 10-year bonds soared to a euro-era high of 6.83 percent before slipping back to 6.7 percent on speculation that the ECB has resumed sovereign bond buying to help ease Europe's debt crisis. The ECB also called for an EU-wide deposit guarantee scheme and suggested installing a banking union across the eurozone to end the crisis and create a stable base for future growth.
Next week's Federal Reserve meeting is expected to be contentious as Chicago Federal Reserve Bank President Charles Evans reiterated that he will support further U.S. monetary stimulus to produce faster job growth. Commodities were mixed as the euro moved in a tight range against the dollar and yen.
Tokyo stocks rose modestly in relatively thin trading, as investors hoped that the Bank of Japan will increase its asset purchases at a policy meeting that ends on Friday. Also supporting sentiment, the Cabinet Office said today that Japan's core machinery orders climbed a seasonally adjusted 5.7 percent from a month earlier in April, topping estimates for an increase of 1.6 percent following the 2.8 percent contraction in March and the 2.8 percent gain in February. The Nikkei average rose 0.6 percent, while the broader Topix index gained a modest 0.3 percent.
Hitachi rose 2.4 percent on a Nikkei report that it plans to buy a German service provider of conventional power plants for several billion yen. Suzuki Motor gained 0.9 percent after its Maruti Suzuki India unit decided to merge its engine- and transmission-making venture Suzuki Powertrain India with itself.
Heavyweights Fast Retailing and Softbank rose about 1.8 percent each and tech shares like Advantest and Tokyo Electron added 1.1 percent and 0.5 percent, respectively, while Canon lost 1.1 percent and Fujifilm Holdings shed 1.8 percent. Sumco tumbled 3.3 percent on profit taking after rallying more than 15 percent in the past two sessions.
China's Shanghai Composite index rallied 1.3 percent on hopes of some further monetary easing and infrastructure stimulus spending. Hong Kong's Hang Seng index added 0.8 percent, led by insurers on reports the China Insurance Regulatory Commission is considering expanding investment options for insurance companies.
Australian shares eased slightly despite positive cues from overseas and regional markets and data showing a small rise in Australian consumer confidence. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index slipped about 0.2 percent each.
The Westpac-Melbourne Institute Index of Consumer Sentiment increased by just 0.3 percent in June from May, while sentiment has risen only 1.1 percent from its April level as concerns about the domestic economy and an uncertain global environment offset most of the positive effects of the Reserve Bank of Australia's official cash rate cut early this month.
Financials closed mostly lower, with Commonwealth, NAB and Westpac retreating about 0.4 percent each, while ANZ shed 0.9 percent. Among the miners, Rio Tinto edged down marginally, but BHP Billiton rose 0.6 percent. Whitehaven Coal soared 4.5 percent on saying that it had received a non-binding privatization proposal from billionaire Nathan Tinkler.
South Korea's Kospi average gained 0.25 percent, with nagging debt contagion fears limiting the upside. Shares of polysilicon maker OCI Corp rose 2.5 percent to its highest closing level since May 30 after U.S.-based First Solar Inc said it would increase production to meet unexpectedly high levels of demand in Germany. Hana Financial Group tumbled 3.7 percent after its chairman Kim Jung Tai said yesterday the company might buy a savings bank under the right conditions.
New Zealand shares fell to a three-month low, as institutional investors churned their portfolios ahead the NZX-50 index's weighting adjustment at the weekend. The benchmark index lost 1.3 percent, with 27 of its components declining. SkyCity Entertainment Group tumbled 3.4 percent after the Auditor-General announced an inquiry into the company 's bid to build a convention centre in Auckland in exchange for more pokie machines.
Restaurant Brands, the fast food franchise operator, plunged 4.2 percent on going ex-dividend, online auction site Trade Me retreated 2.9 percent, Telecom, the nation's largest construction company, fell 2.4 percent, Chorus, the network company spun off from Telecom, dropped 2.3 percent and utility Contact Energy shed 1.9 percent.
Gold miner OceanaGold led the gainers on the exchange, climbing 2.7 percent, as gold stayed above $1600 an ounce in Asian trading Wednesday, drawing strength from the uncertainty over the euro zone debt crisis and renewed hopes for fresh U.S. and Chinese stimulus.
Elsewhere, India's benchmark Sensex was last trading up 0.2 percent in volatile trading, Indonesia's Jakarta Composite rose 0.2 percent, Malaysia's KLSE Composite edged up marginally and the Taiwan Weighted gained 0.2 percent, but Singapore's Straits Times index was down 0.4 percent.
On Wall Street, stocks ended notably higher overnight after Spanish bond yields came off euro-era record highs. Bargain hunting following the previous session's sell-off also contributed to the buying interest. The Dow rose 1.3 percent, while the tech-heavy Nasdaq and the S&P 500 added about 1.2 percent each.
by RTT Staff Writer
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