MW: Tokyo, Seoul gain, but off highs; BHP lifts Sydney
By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Asian markets advanced Tuesday as steep overnight gains on Wall Street and in commodity prices lifted financials and resource stocks, but some came off highs in afternoon trading on a decline in airline and automobile shares.
In Tokyo, where trading resumed after Monday's holiday, the Nikkei 225 Average jumped as much as 5.6% early in the session, but recently was up only 2.7% at 8,109.55. The broader Topix index added 1.1% to 811.41.
South Korea's Kospi advanced more than 6% earlier in the day, but gave away most of the gains and was recently up 0.5% at 975.09.
Hong Kong's Hang Seng Index advanced 3.2% to 12,861.65, while the Hang Seng China Enterprises Index climbed 4.3% to 6,651.52.
Alex Tang, head of research at Core Pacific-Yamaichi in Hong Kong, said the global credit crunch was "very much over," and that the multi-year lows that most regional markets touched in October were unlikely to be visited anytime soon.
"Investors are adopting short-term punting strategies. Market may not be able to move up substantially from current price levels and you'll continue to see selling at higher levels," said Tang. "What [the markets] are focusing now on is the timeframe for the global economic recovery, and that will continue to be the focus in coming months."
China's Shanghai Composite inched up 0.1% to 1,899.62, after declining for three straight sessions, while Australia's S&P/ASX 200 was recently up 4.1% at 3,564.70.
India's Sensitive Index added 2.1% to 9,087.24 in early trading.
New Zealand's NZX 50 index added 2.3% to 2,634.88, after a six-session losing streak, Singapore's Straits Times Index gained 2.6% to 1,662.83 and Taiwan's Taiex advanced 1.8% to 4,233.69.
Malaysia's KLSE Composite rose 0.4% to 858.86 a day after the country's central bank cut interest rates by a quarter-point to 3.25%.
Stocks in detail
In Sydney trading, shares of BHP Billiton rose 11% and Woodside Petroleum jumped 12.3% on the commodities rally overnight, even though crude-oil and gold prices gave up some of those gains in electronic trading.
In Seoul, shares of Korea Zinc Co. added 1%, while in Hong Kong, Cnooc jumped 8.5% and Aluminum Corp. of China, or Chalco surged 7.5%.
Shipbuilders also advanced in line with commodity stocks, with Kawasaki Heavy Industries rising 4.4% in Tokyo and STX Shipbuilding Co. gaining 3.6% in Seoul.
Francisco Blanch, head of global commodities research at Merrill Lynch, wrote in a report that the deceleration in global oil intake in the second half of this year "should continue well into next year, and we now expect an outright contraction in global oil demand of 0.5% or 400 thousand barrels (per) day in 2009."
Blanch said a 10% reduction in oil prices could improve oil demand by 0.1% to 0.5%, depending on the region. However, "the negative impact on consumer purchasing power of a global recession will offset the benefit of lower oil prices on oil demand in the first half of 2009."
In electronic trading, January crude-oil futures slipped 85 cents to $53.65 a barrel, after climbing $4.57, or 9.2%, to end at $54.50 a barrel Monday on the New York Mercantile Exchange. December gold futures gave up $6.50 to $813 an ounce recently, after advancing $27.70, or 3.5%, to end at $819.50 an ounce on the Comex division of Nymex.
Declining demand for automobiles and weakening passenger load factors hurt some automobile and airline shares.
Toyota Motor Corp. ) lost 1% in Tokyo. In Seoul, Korean Air Co. dipped 0.6% and Hyundai Motor Co. slumped 7.8%.
Shares of Dongfeng Motor Group Co. lost 4.5% in Hong Kong, Air China shares gave up 1.8% in Shanghai and FAW Car Co. slid 3.1% in Shenzhen.
Financials broadly advanced, with Tokyo-listed shares of Citigroup Inc. soaring 18.2% on the U.S. government's decision to bailout the banking giant.
Mizuho Financial Group climbed 5.9% in Tokyo, while Australia & New Zealand Banking Group shares jumped 8.9% in Sydney and 11% in Wellington.
In Hong Kong, shares of Industrial & Commercial Bank of China gained 6.6%, while China Construction Bank Corp. advanced 5.1%.
Ranking among the losers, shares of logistics firm Brambles lost 7.8% in Sydney, after Chairman Graham Kraehe told shareholders the company's operating environment may remain challenging "through 2009 and possibly beyond, particularly in the U.S. and Europe."
In Asian currency trading, the U.S. dollar bought 96.25 yen, compared with 96.39 yen late Monday.
On Wall Street, the Dow Jones Industrial Average surged 4.9% to 8,443.39 on the government's rescue of Citigroup and as President-elect Barack Obama directed his new economic team to get to work. The S&P 500 index surged 6.5% to 851.81, while the Nasdaq Composite rose 6.3% to 1,472.02.
