Asian stocks rose broadly on Tuesday as investors continued to pin their hopes on policy action from major central banks to bolster economic growth and help combat the euro zone's debt crisis. The move by People's Bank of China to ease monetary conditions lowered expectations of further economic stimulus measures from China, but that didn't deter investors from betting on further stimulus measures from the ECB and the Federal Reserve down the road.
The European Central Bank remains tight-lipped over its future course of action after quashing speculation that it was planning to cap borrowing costs for the region's struggling countries. Investors are now looking forward to a series of eurozone finance ministers' meetings and a slew of U.S. housing data due this week for near-term directional cues.
Commodities rose and the euro strengthened against the dollar for a second straight session, as investors shrugged off remarks by Germany's central bank against the proposed purchases of government bonds by the European Central Bank.
Tokyo stocks turned in a mixed performance, as investors were clueless about ECB policy action. The benchmark Nikkei average eased 0.2 percent in thin trading, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange ended 0.6 percent higher. Komatsu and Hitachi Construction Machinery both fell about 3 percent each on brokerage downgrades in the wake of weakening demand from China.
Fujitsu gained 3.7 percent after Citigroup upgraded its rating on the stock. Automaker Toyota Motor advanced half a percent, while Mitsubishi UFJ Financial Group, the nation's largest publicly traded lender, rose 1.1 percent. Vendors of Apple's iPhone smartphone such as KDDI and Softbank rose 0.9 percent and 1.4 percent, respectively, after Apple's market value climbed past $623 billion on Wall Street overnight, surpassing a record market capitalization set by Microsoft Corp. more than a decade ago.
China's Shanghai Composite index rose half a percent after the People's Bank of China injected CNY 220 billion into the money market through reverse repurchase operations to ease a cash crunch. The central bank said it added CNY 150 billion using seven-day reverse repos at a yield of 3.4 percent and CNY 70 billion via 14-day reverse repos at 3.6 percent. This huge injection into the banking system has lowered hopes of another reserve requirement reduction from the central bank in the near term.
Hong Kong's Hang Seng index edged down marginally, with China's leading offshore oil producer CNOOC leading the decliners after it posted an unexpected 19 percent fall in first-half profit.
Australian shares finished higher on speculation the European Central Bank will take steps to tackle the region's debt crisis despite denials by ECB officials of any kind of bond-buying plans. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index ended up about 0.4 percent each. The Australian dollar rose modestly after the minutes of Reserve Bank of Australia's Aug. 7 policy meeting showed the central bank was content with its policy, offering little in the way of forward-looking commentary.
Energy shares led the gainers, with Woodside and Linc Energy gaining over 2 percent each, while telco group Telstra advanced 1.4 percent after unveiling plans to cut about 422 jobs at customer service and call centre operations. Shares of Monadelphous soared 7.2 percent after the company reported another record annual profit and forecast strong demand for engineering services in the next few years.
Seoul shares edged lower, with the uncertainty over European Central Bank's policy action keeping investor sentiment subdued. The benchmark Kospi average edged down 0.2 percent. Overseas investors extended their buying streak for a 11th straight session, picking up stocks worth a net 179.6 billion Korean won, data showed, helping limit the downside to a certain extent.
Memory chip maker SK Hynix climbed 2.4 percent on expectations there is very limited room for DRAM prices to fall further. Retailers Hyundai Department Store and Shinsegae rallied 3-6 percent on hopes of a busy holiday shopping season ahead of a major harvest festival.
New Zealand shares rose to a four-and-a-half-year high, with better-than-expected corporate earnings boosting sentiment. The benchmark NZX-50 index rose 0.7 percent to its highest level since February 2008, with Fletcher Building, Skellerup Holdings and Telecom gaining between 1.4 percent and 2.4 percent ahead of their earnings results.
Rural Services firm PGG Wrightson jumped 3.2 percent and whiteware manufacturer Fisher & Paykel Appliances rallied 4.8 percent. Outdoor clothing and equipment company Kathmandu Holdings led the decliners, falling 3.4 percent, while stock exchange operator NZX and would-be bank Heartland fell about 2 percent each.
Elsewhere, India's benchmark Sensex was last trading up 0.9 percent, Singapore's Straits Times index gained 0.1 percent and the Taiwan Weighted average added a percent, while the markets in Malaysia and Indonesia were closed for public holidays.
On Wall Street, stocks ended almost unchanged overnight, with a lack of fresh directional cues amid little major corporate and economic news contributing to the lackluster performance. The Dow dipped 3.56 points, the tech-heavy Nasdaq edged down 0.38 points and the S&P 500 inched down 0.03 points.
For comments and feedback: editorial@rttnews.com