By Matthew Allen
Asian stocks ended mixed on Tuesday, as Tokyo followed Wall
Street's overnight rise despite the strengthening yen, while
investors in China worried about slowing economic growth.
Still others focused on the Reserve Bank of Australia, which
opted to keep its benchmark cash rate unchanged at 4.5%, citing
growth and inflation levels that have come in as expected.
In foreign-exchange markets, the dollar fell against the yen and
other regional currencies.
The Nikkei Stock Average ended up 1.3% at 9694.01, while the
broader Topix index gained 1%.
Australia's S&P/ASX 200 added 0.7%, South Korea's Kospi
Composite rose 0.5% and India's Sensex tacked on 0.3% in late
trading. Hong Kong's Hang Seng Index ended 0.2% higher, giving back
gains early in the session.
The Dow Jones Industrial Average surged 2% on Monday to mark its
biggest one-day point gain since July 7 and closed at its highest
level since May 13.
By contrast, the Shanghai Composite index fell 1.7%, with some
brokers saying shares appeared overbought after a recent
run-up.
Data released Monday showed manufacturing activity throughout
much of Asia cooled in July, with one data set showing China
undergoing its first contraction since its recovery began in early
2009.
"The reality set in that the mainland economy is slowing down,"
said Francis Lun, general manager of Fulbright Securities in Hong
Kong.
Others saw the pullback as more of a temporary blip. Belle
Liang, head of research at Core Pacific-Yamaichi in Hong Kong, said
the uptrend in China stocks should continue because of the
likelihood Beijing will bolster government outlays to offset any
significant slowdown in manufacturing.
In Sydney, Nexus Energy shares jumped 23% after The Australian
newspaper reported that shareholders had been "sounded out" about a
takeover bid worth 480 million Australian dollars ($438 million).
Nexus Energy said the company hasn't been approached about a
possible takeover.
Among other energy stocks, Japan Petroleum was up 1% and Inpex
Corp. added 2.4%.
In Japan, trading company Mitsui & Co. rose 4.4% after it
reported its fiscal first-quarter net profit rose 79% from a year
earlier.
Nomura Holdings rose 3.7% after Citigroup raised its rating on
Japan's largest brokerage to buy/high risk and said the stock's
fall this year was overdone.
Mizuho Financial Group Inc. (MFG) rose 1.4%, while Sumitomo
Mitsui Financial Group Inc. (SMFJY) rose 0.8%.
Technology shares in Seoul got a lift. Bellwether Samsung
Electronics (SSNHY) was up 0.6%, Hynix Semiconductor (HXSCF) gained
1.6% and LG Electronics (LGEAF) added 3.4%.
In China, several heavyweight bank stocks were under selling
pressure with Industrial & Commercial Bank of China ending 1.6%
lower and Bank of China down 1.7%.
"Some profit-taking was expected as this rebound is being
supported by expectations of policy loosening rather than any
material improvement in economic fundamentals," said Zhang Gang at
Central China Securities.
In Hong Kong, HSBC (HBC) rose 1.8%, tracking gains in its
American depositary receipts late Monday in New York after strong
first-half earnings. However, traders said share-price gains were
somewhat limited as the lender's improved earnings were driven in
part by sharply lower provisions.
Among real estate stocks, China Resources Land gained 0.7% and
Sun Hung Kai Properties added 1.4%.
Shares of Pacific Basin Shipping ended 4.3% lower ahead of the
release of first-half results. The dry bulk shipper announced after
the market close that its net profit fell 31% from a year earlier
as oversupply continued to weigh on freight rates despite a gradual
recovery in demand for raw materials.
Elsewhere in the region, Singapore's Straits Times Index eased
0.3%. Taiwan's main index closed 0.6% higher and Indonesia's
Composite Index slumped 2.8%. New Zealand's NZX-50 was up 0.2% and
Thailand's SET finished up 0.3%.
In foreign exchange markets, the greenback continued to slip
against major rivals.
The euro was at $1.3224 against the U.S. dollar, compared with
$1.3179 late Monday in New York. The dollar was at 86.03 yen from
86.51 yen, while the euro was at 113.74 yen from 114 yen.
Most of the regional currencies were up against the U.S. dollar
as gains in stocks and commodity prices fed into renewed risk
appetite, which helped currencies perceived as being riskier than
the greenback.
After the RBA held its key policy rate steady, the Australian
dollar eased from its morning high at US$0.9143, and was recently
trading at US$0.9108.
The yield on the 10-year cash Japanese government bond erased an
earlier rise and slipped to 1.030%, its lowest level since August
2003, after a well-bid government auction.
Gold futures were trading at $1,186.40 per troy ounce, up $3
from the New York close. September Nymex futures gained 48 cents to
$81.82 a barrel.