MW: Stocks mostly up; Tokyo, Shanghai lead gainers
Asian markets were mostly higher Tuesday, with Japanese stocks struggling to hold on to early gains spurred by recent weakness in the yen, while Hong Kong shares retreated on telecom firms such as China Mobile after a strong recent rally.
Japan's Nikkei 225 rose 0.6% to 9,088.06 in the afternoon, after rising in the previous five sessions and flirting with losses earlier in the day.
Hong Kong's Hang Seng Index dropped 1.1% to 15,387.41, reversing early gains. India's Sensitive Index, or Sensex, rose 0.1% to 10,286.31 recently, after flip-flopping between positive and negative territories.
Australia's S&P/ASX 200 climbed 1.3% to 3,734.80, as resource stocks such as Rio Tinto and BHP Billiton extended gains on the back of a strong recent trend in commodity prices.
"There does seem to be a little bit of confidence returning," said Hamilton Hindin Greene adviser Grant Williamson in New Zealand.
Along with expectations for a large-sized fiscal stimulus package soon from the U.S., analysts in several Asian markets have talked of late about the prospect of more central bank interest rate cuts, especially with inflation slowing and even the prospect of deflation in some places.
That, they have said, is spurring some interest in stocks as officials use a combination of rate cuts and fiscal stimulus measures to prop up economic growth.
Elsewhere in the region, China's Shanghai Composite advanced 1.4% to 1,906.99, South Korea's Kospi added 1.4% to 1,189.54, Taiwan's Taiex gained 0.5% to 4,724.78 and Singapore's Straits Times Index fell 1% to 1,905.27.
"As we saw yesterday, the market can reverse early gains pretty comfortably," said a trader at a brokerage in Sydney.
There was the potential for some caution, though, before U.S. economic data later Tuesday like factory orders, and especially before Friday's nonfarm payrolls reading, which was expected to be a grim reminder of the difficulties plaguing the U.S. labor market.
Analysts at Barclays Capital said investors seemed to be cash rich, and actively seeking risk; "but we also note investors will be sensitive to pullbacks in risky assets as most of them will not be able to afford a second losing year in a row."
UBS also said its sales desks had reported significant interest in taking up risk by clients; "however, it's worth putting things in perspective. Judging by the duration of past recessions, it seems to be early days to be calling for a recovery, even with Obama's stimulus packages."
In Japan, exporters were higher again on the currency cue, with the U.S. dollar up nearly 3% against the yen so far in 2009. Sony surged 7.4%, while Toshiba climbed 10.2%.
Toyota Motor was up 1% despite news it planned to expand production cuts in Japan in February and March, while Honda Motor added 1.5%. The gains came in spite of news of a steep fall in their December sales in the U.S.
Some doubted the carmakers could sustain their gains. "W have a pessimistic view on the sector in the medium term," said one trader at a European brokerage.
Financial stocks were stronger in Australia, along with resource names and consumer staples; construction company Leighton Holdings , though, slumped 11.8% after saying it would book A$170 million in after-tax charges in its first fiscal half, on lower investment values.
Korean markets were being led by technology names amid hopes for a recovery in DRAM contract prices and panel prices after sharp falls in 2008. Samsung Electronics added 4.9% and LG Display rose 2.3%.
Flat-panel stocks were also higher in Taiwan with Chi Mei Optoelectronics up 2.2%, helped by a Commercial Times report the company had received orders from China.
In Hong Kong, telecom shares reversed direction, after posting some strong gains in the last few sessions on hopes China was close to issuing 3G licenses, with China Mobile losing 3.4% and China Unicom (Hong Kong) slumping 5.9%.
Currency markets were fairly quiet after some large gains for the U.S. dollar in New York; the dollar was around 93.11 yen, from 93.33 yen in the U.S., and the euro at 125.84 yen, from 127.10 yen.
"Going ahead, we expect Asian central banks to remain on hand to prevent undue appreciation of their domestic currencies in view of the quickly deteriorating external and domestic economic landscape as well as the dousing of regional inflation rates," said analysts at OCBC Treasury Research in Singapore.
Front-month Nymex crude was down 69 cents at $48.12 a barrel on Globex after rising more than 5% in New York; oil though stayed supported by violence in Gaza and worries over Russian natural gas supplies to Europe.
February gold futures fell $4.8 to $853 a troy ounce; "it's a combination of gold just running out of a bit of topside momentum into some heavy technical resistance and then getting a bit of (downward) momentum from the euro selloff," said a Sydney-based trader.
