HONG KONG (MarketWatch) -- Most Asian markets advanced Thursday after the U.S. House of Representatives approved a $14 billion loan package for the auto industry and as South Korea cut its benchmark interest rate by a hefty one percentage point in response to a rapid economic slowdown.
But the session was marked by volatility and modest trading volumes as investors were cautious on signs some U.S. Republicans may oppose the auto industry's bailout in the Senate.
Asian auto and tire makers such as Toyota Motor Corp. and Bridgestone Corp., who derive a large part of their sales revenue from the U.S., advanced after a weak start.
"People are watching what's going to happen to the U.S. auto bailout package," said Yoji Takeda, head of Asian equities at RBC Investment. "If it fails, then it's going to be pretty negative ... But I guess people still expect it to go through with some struggle."
Takeda said the phase of "forced liquidation" in the broad market was likely over and investors were in the wait-and-watch mode ahead of the holidays later this month.
In Tokyo, the Nikkei 225 Average finished 0.7% up at 8,720.55, extending gains to a fourth day. The broader Topix index rose 1.8% to 849.25.
South Korean stocks advanced for a fifth straight session after the Bank of Korea slashed its base rate for the fourth time in two months, by a deeper-than-expected one percentage point to 3%. The Kospi ended up 0.8% at 1,154.43, responding to the central bank's rate cut to support a rapidly slowing economy.
In Hong Kong, the Hang Seng Index rose 0.2% to 15,613.90, while the Hang Seng China Enterprises Index ended down 0.3% at 8,486.45.
China's Shanghai Composite dropped 2.3% to 2,031.68. Data released earlier in the day showed the country's consumer price inflation eased to 2.4% in November from the same month a year earlier and from 4% in October.
Australia's S&P/ASX 200 gave up 1.2% to 3,598, New Zealand's NZX 50 index rose 0.6% to 2,726.71, Taiwan's Taiex slipped 0.1% to 4,655.57, Malaysia's KLSE Composite gained 0.7% to 860.68 and Thailand's SET Index advanced 0.4% to 425.57.
In afternoon trading, India's Sensex lost 1.6% at 9,500.65 and Singapore's Straits Times Index dropped 1.9% to 1,787.75.
U.S. stock futures were recently pointing downward, with the Dow Jones Industrial Average futures down 52 points at 8,663, S&P 500 futures off 8.90 points at 886.90 and Nasdaq 100 futures 10.25 points lower at 1,206.75.
Regional detail
In Tokyo, shares of tire maker Bridgestone added 0.5%, Toyota Motor Corp. gained 4.8% and Nissan Motor Co. advanced 1.2%, overcoming early weakness on the House's approval of the bailout loan package.
Shares of Sumitomo Mitsui Financial Group spiked 9.6% in Tokyo after Kyodo news service reported the banking giant plans to raise about 700 billion yen ($7.53 billion) in capital by issuing preferred securities.
In Hong Kong, shares of Lenovo Group reversed early declines to rise 1.4% in afternoon trading, on top of Wednesday's 26.6% surge. The stock rebounded in afternoon trading from early losses, after the company said it was in preliminary talks for a possible acquisition.
The announcement came after wire service reports cited Brazilian media as saying that Lenovo, as well as Dell , were interested in Positivo Informatica, Brazil's largest computer maker.
Shares of China Southern Airlines Co. surged 43% and China Eastern Airlines Corp. in Hong Kong as trading resumed after an announcement that the airlines will each receive $438 million in a capital injection from the government via share purchases by state-owned units. See full story.
Energy related shares broadly advanced in the wake of an increase in crude-oil prices overnight, with Inpex Corp. gaining 7% in Tokyo and Cnooc climbing 2.7% in Hong Kong afternoon trading.
January crude-oil futures added 68 cents to $44.20 a barrel in electronic trading, after climbing $1.45 to $43.52 a barrel Wednesday on the New York Mercantile Exchange.
Shares of Rio Tinto climbed 7% in Sydney after the mining giant said it would cut 14,000 jobs, slash 2009 capital expenditure and pare debt to conserve cash and lower costs amid weakening demand in a global economic downturn. See full story.
Shares of Bluescope Steel slumped 26.1% to A$2.98 ($1.97) as trading resumed after the steelmaker raised A$300 million through a share placement at A$3.10 apiece, and after Morgan Stanley cut the company's price target sharply to A$2.97 from A$4.48 earlier.
"Asian steel companies [are] expected to start reporting losses in [the October-December] quarter. We think Bluescope Steel isn't far behind its peers," analysts Craig Campbell and Cameron Judd wrote in a report. "We think this is just the start of declining markets in Australia for steel."
In Asian currency trading, the U.S. dollar bought 92.48 yen, compared with 92.80 yen late Wednesday.
