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Asian Stocks Rise On Earnings, Nikkei Drifts Lower On Firm Yen

Asian Stocks Rise On Earnings, Nikkei Drifts Lower On Firm Yen

Asian stocks rose broadly on Wednesday, with a firmer yen boosting South Korean exporters while positive corporate earnings lifted Australian shares to their highest level in nearly four-and-a-half years. Japanese shares bucked the regional uptrend to end lower, with some weak earnings reports and a stronger yen weighing on investor sentiment. Investors awaited the outcome of the G20 finance ministers meeting in Moscow beginning Friday to see if G7 powers will stick to their 'long-standing position' of not targeting exchange rates.

Japanese shares lost ground, with exporters bearing the brunt of the selling on the yen's rebound after the Group of Seven financial chiefs issued a joint statement pledging to avoid using monetary policy to control exchange rates. In an earlier statement issued Tuesday, G-7 officials said they had affirmed a long-standing commitment to "market-determined exchange rates and that fiscal and monetary policy will not target exchange rates.

The statement had been "misinterpreted" and was designed to express concern about the volatile nature of the yen's depreciation, a G7 official reportedly clarified. The Nikkei average lost a percent, while the broader Topix index shed 1.2 percent. Toyota Motor fell 1.8 percent, Panasonic lost 3.4 percent and Sony slumped 5.6 percent. Olympus declined 2.7 percent after the company cut its full-year profit forecast, citing weak demand for digital cameras.

Australian shares rose sharply, with the benchmark S&P/ASX 200 rising 0.9 percent to surge above the 5,000 resistance level for the first time in almost three years, helped by a string of positive earnings reports and upbeat consumer confidence data. The broader All Ordinaries index also closed up 0.9 percent at 5,024.50.

Commonwealth Bank of Australia rallied 2.4 percent after the lender posted a $3.78 billion half-year profit and struck an upbeat note on the outlook for the Australian economy. ANZ rose 0.9 percent, NAB advanced 1.2 percent and Westpac rallied 2.1 percent. Global miner Rio Tinto gained 2.1 percent ahead of its results on Thursday, while rival BHP Billiton added 0.9 percent.

Australian consumer sentiment jumped to its highest level in more than two years in February, indicating that the Reserve Bank's rate cuts in the past year are "starting to gain more traction" with the consumers. A survey by Westpac and the Melbourne Institute revealed that the Index of Consumer Sentiment rose 7.7 percent to 108.3 in February from 100.6 in January. According to Westpac's Chief Economist Bill Evans, this is the strongest sentiment reading since December 2010 and is the biggest monthly gain since September 2011.

South Korea's Kospi average jumped 1.6 percent, led by exporters after major advanced economies warned against Japan's aggressive monetary easing. Separately, Japan and South Korea have agreed to work closely on a fresh resolution at the U.N. Security Council seeking to impose expanded sanctions on North Korea in the wake of its third nuclear test.

New Zealand shares rose marginally, helped by firm regional cues. The benchmark NZX-50 index ended up 3 points or 0.08 percent at 4,221. SkyCity Entertainment Group rose 0.3 percent after reiterating its full-year earnings guidance, Fletcher Building, the nation's largest construction company, advanced 0.6 percent and retailer Kathmandu Holdings added 1.8 percent.

Retirement village operator Summerset Group fell 2.7 percent amid speculation Australian buyout firm Quadrant will trim its stake in the firm. Rakon tumbled 32 percent to a record low after the company cut its annual earnings forecast for the second time since December.

Elsewhere, India's benchmark Sensex was moving up 0.4 percent, Indonesia's Jakarta Composite index rose half a percent, Malaysia's KLSE Composite advanced 0.4 percent and Singapore's Straits Times index was gaining 0.9 percent. The markets in China, Hong Kong and Taiwan were closed for the Lunar New Year holidays.

U.S. stocks ended on a flat note overnight, as traders seemed reluctant to make any significant moves ahead of President Barack Obama's State of the Union address later in the evening. The Dow rose 0.3 percent and the S&P 500 added 0.2 percent, while the tech-heavy Nasdaq slipped 0.2 percent.

by RTT Staff Writer

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