Asian stocks rose across the board on Tuesday, as an unexpected drop in U.S. retail sales and the downgrade of IMF's global growth outlook to 3.5 percent from its April forecast of 3.6 percent stoked expectations of more monetary stimulus from central banks around the world led by China and the United States.
Amid weakness in Europe and a sluggish recovery in the U.S. economy, investors are pinning hopes that U.S. Federal Reserve Chairman Ben Bernanke will hint at further stimulus for the American economy when he addresses Congress later in the global day and tomorrow.
Commodities edged higher and the euro rose against the dollar, as stimulus expectations and earnings optimism on the back of Citigroup's better-than-expected second-quarter results outweighed the news of the Italian bank downgrades.
Japanese shares rose, with lingering concerns about the global economy capping the upside. The Nikkei average ended 0.4 percent higher, while the broader Topix index finished down 0.4 percent, extending declines for the eight straight session. Among the prominent gainers, Fast Retailing climbed 4.8 percent after recent falls, Fanuc rose a percent and KDDI added 1.9 percent. Domestic-demand linked stocks such as Mitsui Fudosan and Astellas Pharma rose 3-4 percent.
Canon tumbled 3.1 percent after U. S. laser and inkjet printer maker Lexmark International Inc. cut its second-quarter earnings guidance. Panasonic and Sharp fell 4-6 percent hit by a stronger yen, while Sony lost 3.4 percent on a brokerage downgrade.
Kansai Electric Power plummeted 7.2 percent after tens of thousands of people rallied in Tokyo on Monday demanding an end to nuclear power. JX Holdings slumped 7.8 percent after an investigation revealed false inspection records had been filed at one of its domestic refineries.
China's Shanghai Composite index rose 0.6 percent, led by property developers and brokerages, despite mounting concerns over earnings and growth. Hong Kong's Hang Seng index soared 1.8 percent, led by insurers after China Life Insurance and China Pacific Insurance Company reported encouraging June premium growth.
Australian stocks gained ground, with banks rising sharply, after minutes of the Reserve Bank of Australia's July meeting suggested the central bank was in no hurry to cut interest rates in the near future amid signs of improvement in the domestic economy following rate cuts in May and June. The benchmark S&P/ASX 200 rose 0.9 percent, while the broader All Ordinaries index gained 0.8 percent.
ANZ topped the gainers' list among banks, rising 1.7 percent, while Commonwealth Bank of Australia advanced 1.6 percent, Westpac added 1.5 percent and NAB gained 0.9 percent. Telecommunications firm Telstra rose 1.3 percent due to its high dividend yield. Energy stocks also did well, with Oil Search gaining 1.4 percent, while Santos and Woodside ended up about 0.7 percent each.
Miner Rio Tinto ended the session down 0.1 percent in volatile trading after it reported record production of iron ore and coking coal in the first half of the year, but cautioned economic conditions deteriorated notably in the second quarter. Rival BHP Billiton edged up marginally and gold miner Newcrest rose 2.4 percent, but smaller rival Fortescue fell 2.2 percent.
Seoul shares posted modest gains, reversing early losses, as hopes of further stimulus measures spurred institutional buying in undervalued stocks. The benchmark Kospi average rose 0.2 percent, extending gains for a third consecutive session.
Energy shares outperformed, with SK Innovation and S-Oil climbing about 3 percent each, while Hyundai Motor, South Korea's largest automaker, fell 2.4 percent after shipbuilder Hyundai Heavy Industries completed a 705 billion won stake in the company. Likewise, polysilicon maker OCI tumbled 3.5 percent reacting to reports that China has started an anti-dumping probe against the company.
New Zealand shares ended little changed with a positive bias, as investors remained risk averse ahead of Bernanke's report on the U.S. economy tonight. The benchmark NZX-50 index rose 1.5 points or 0.04 percent to 3,469. Tech stocks paced the gainers, with Xero climbing 8.6 percent to a fresh record high on modest volumes following an announcement that it is working with ADP, a U.S. payroll company, as part of its target to expand customer base to one million in the next few years.
Diligent Board Member Services rose 2 percent after the company said it has nearly tripled its second-quarter sales to $10.1 million from $3.7 million in the corresponding quarter last year. Gold miner OceanaGold rallied 4.1 percent on news that it has secured credit approvals from a group of banks for a $220-million loan.
Elsewhere, India's benchmark Sensex was last trading down 0.1 percent in volatile trading, while Indonesia's Jakarta Composite index was up 0.8 percent, Malaysia's KLSE Composite rose 0.2 percent, Singapore's Straits Times index was moving up half a percent and the Taiwan Weighted average added half a percent.
On Wall Street, stocks ended modestly lower overnight, as a disappointing report on retail sales offset decent quarterly results from Citigroup and data showing stronger than expected growth in regional manufacturing activity. The Dow and the tech-Nasdaq slid about 0.4 percent each, while the S&P 500 edged down 0.2 percent.
by RTT Staff Writer
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