Asian stocks ended mostly higher on Wednesday, as weak reports on factory orders in Germany and Italian economic growth spurred speculation that major central banks will take measures to bolster economic growth. Having said that, gains were limited in the run-up to central bank meetings in Japan and South Korea.
Japanese shares rose for a third straight day, as short-covering in beaten-down shares such as Sharp and Sony outweighed selling in Dainippon Screen Manufacturing and other firms with disappointing earnings results.
Tracking overnight gains in the U.S. and Europe, the benchmark Nikkei average ended the day up about 0.9 percent, while the broader Topix index finished 0.3 percent higher. Stocks pared early gains on concerns about increasing political turmoil in Japan over parliamentary passage of a sales tax hike legislation, which could lead to dissolution of the House of Representatives for a general election.
Sharp Electronics rose 2.7 percent after it reached a licensing agreement with Microsoft to facilitate transfer of audiovisual media and enable seamless data. Other export-oriented electronics makers such as Fujitsu and Kyocera gained about 2 percent each, as the yen's weakness against the dollar and euro allayed concerns about their earnings growth.
Financials lost ground, as investors awaited the outcome of the Bank of Japan's two-day policy meeting through Thursday. Speculation is rife that the central bank will probably avoid adding to monetary stimulus, as domestic economic activity started picking up moderately and recent jobs data showed U.S. hiring increased in July. Both Mitsubishi UFJ Financial Group and Mizuho Financial Group ended down about 0.8 percent each.
China's Shanghai Composite posted a modest 0.2 percent gain, as investors braced for a raft of Chinese data due tomorrow, including inflation, industrial output and retail sales, which will possibly reveal hints of policy loosening. Chinese trade data will be released on Friday, with many economists expecting trade surplus to further expand in July despite slower export growth.
Shares in Hong Kong edged down marginally, with property stocks tumbling, after the government reportedly reiterated its willingness to impose home-purchase restrictions.
Australian shares rose modestly to extend gains to a four-month high, buoyed by overnight gains in the U.S. and European markets on optimism over central bank stimulus. Both the benchmark S&P/ASX and the broader All Ordinaries index rose about half a percent each.
Newcrest and Fortescue led the gainers among miners, climbing 2-3 percent, while BHP Billiton rose 0.4 percent and Rio Tinto edged up marginally. In the financial sector, ANZ rose 0.4 percent, NAB gained 1.3 percent, Commonwealth advanced 1.4 percent and Westpac ended 1.9 percent higher.
In economic news, the demand for home loans grew by the most this year in June, as buyers responded positively to the RBA's 1.25 percent interest-rate cuts since the start of November, data released by the Australian Bureau of Statistics revealed. Home-loan approvals rose 1.3 percent to 46, 859 in June 2012 compared to the previous month.
South Korea's Kospi average ended 0.9 percent higher, extending gains for a third consecutive session on heightened expectations for stimulus measures from central banks in the U.S. and Europe. Financials led the gainers, with Hana Financial and Woori Finance climbing 2-4 percent, as investors awaited the outcome of central bank policy meeting tomorrow.
The Bank of Korea is widely expected to keep its rates steady after a surprise cut last month. Hyundai Motor, South Korea's largest automaker, slipped 0.2 percent after its labor union resumed a partial strike seeking higher wages and better working conditions.
New Zealand shares edged down marginally, as caution prevailed ahead of the corporate earnings season. The benchmark NZX-50 index slid 0.1 percent, with heavyweight Telecom and Mainfreight leading the decliners. Shares of Telecom, the largest listed company on the exchange, fell 2.6 percent after rising to a four-year high yesterday, logistics firm Mainfreight declined 1.6 percent ahead of its earnings results due tomorrow, carpet maker Cavalier tumbled 3.1 percent and retirement village operator Ryman Healthcare dropped 1.4 percent.
Among the prominent gainers, Fletcher Building, the nation's largest construction company, rose 1.4 percent, jeweler Michael Hill climbed 2.9 percent to its highest level in more than a month and gold miner OceanaGold soared 7.9 percent.
Elsewhere, India's benchmark Sensex was little changed, Indonesia's Jakarta Composite edged up 0.1 percent and Malaysia's KLSE Composite and the Taiwan Weighted average advanced about 0.3 percent each, while Singapore's Straits Times index slid half a percent.
U.S. stocks rose for a third straight session to hit fresh three-month closing highs overnight, as data showing a fourth consecutive quarter of contraction in Italy's economy and declining German factory orders stoked expectations that the ECB will unveil additional measures to address the ongoing debt crisis.
Buying interest was also generated by comments by Boston Federal Reserve President Eric Rosengren, who called for an "open-ended" quantitative easing program to boost economic growth. The Dow rose 0.4 percent, the tech-heavy Nasdaq gained 0.9 percent and the S&P 500 advanced half a percent.
by RTT Staff Writer
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