MW: Asia mostly higher; Hong Kong shares in late rebound
By V. Phani Kumar, Leslie Shaffer & Philip Vahn
HONG KONG (MarketWatch) -- Asian markets ended mostly higher Wednesday as Australian stocks climbed after the government announced a plan to return to a budget surplus in three years, while Chinese shares overcame intraday volatility to end higher as bargain seekers snapped up banks and property developers.
Hong Kong shares staged a last-minute rebound, with Indian shares also erasing losses in afternoon trade as European markets opened higher following the appointment of David Cameron as Britain's new prime minister and earnings reports from ING and Deutsche Telekom.
"European stocks were doing fine at the opening, so that took away some worries about the [markets there]. There was also some short-covering in the banks and big blue-chips on expectations that European and U.S. markets will have a positive day ahead," said Jackson Wong, an investment manager at Tanrich Securities.
Hong Kong's Hang Seng Index finished up 0.3% and India's Sensex also rebounded to gain 0.4% in afternoon trading as banks rose to offset sharp declines in telecommunication shares. Earlier in the day, China's Shanghai Composite rose 0.3%, Japan's Nikkei Stock Average of 225 companies slipped 0.2%, Australia's S&P/ASX 200 gained 0.6%, South Korea's Kospi slid 0.4%, and Taiwan's Taiex slipped 0.1%.
Dow Jones Industrial Average (INDU 10,748, -36.88, -0.34%) futures also erased losses and were 13 points higher in screen trade.
Australia shares got a boost after Treasurer Wayne Swan forecast the government's budget would return to financial surplus three years sooner than expected and before any other major advanced economy, helped by global demand for its key commodity exports. Australia & New Zealand Banking Group added 1% and National Australia Bank rose 0.8%.
"Indications are that with Europe achieving at least a short-term stabilization and the Australian budget appearing financially responsible, our share market is refocusing on fundamentals," said Macquarie Private Wealth associate director, Marcus Droga. "In the short-to-medium term, the risk is probably more to the upside."
Gold miners surged after burgeoning demand pushed the price of gold to a record high as investors sought safer havens with the euro tumbling across the board. Lihir Gold (LIHR 35.76, +0.43, +1.22%) (AU:LGL 4.07, +0.17, +4.36%) added 4.4% and Eldorado Gold (AU:ELD 1.01, 0.00, 0.00%) (ELDXF 17.64, +1.69, +10.60%) surged 11.1% in Sydney, Sumitomo Metal Mining (STMNF 14.27, -0.31, -2.11%) (JP:5713 1,323, -37.00, -2.72%) added 3.7% in Tokyo, and Zijin Mining Group (HK:2899 6.26, +0.22, +3.64%) (ZIJMF 0.82, -0.02, -1.80%) gained 3.6% in Hong Kong.
Shares of toll road operator Transurban Group (AU:TCL 4.92, -0.08, -1.60%) stayed under a trading halt after the company said it has rejected two takeover proposals from a consortium of its major shareholders on the grounds that neither of them offer sufficient value or certainty for its security holders. The company plans to proceed with the 542.3 million Australian dollar ($488 million) capital raising launched Monday to raise funds to acquire the Lane Cove Tunnel in Sydney's north.
Japanese banks extended losses on worries about capital-raising, with Mizuho Financial Group (MFG 3.52, -0.05, -1.40%) (JP:8411 163.00, -8.00, -4.68%) dropping 1.2% and Sumitomo Mitsui Financial Group (SMFJ.Y 3.02, -0.12, -3.82%) (JP:8316 2,815, -106.00, -3.63%) dropping 0.6%, while Mitsubishi UFJ Financial Group (MTU 5.02, -0.10, -1.95%) (JP:8306 460.00, -8.00, -1.71%) declined 2.4%.
But shares of exporters gained on the back of recent earnings reports. "Exporters' earnings are attracting short-term buyers, but at the same time, there are concerns over the weak euro, so sentiment is somewhat mixed," said Tachibana Securities strategist Kenichi Hirano.
Hitachi (HIT 42.52, -0.69, -1.60%) (JP:6501 382.00, -13.00, -3.29%) jumped 4.7% after it swung back to profits in the January-March quarter and on hopes it is now on its way to its first full-year net profit in five years.
Toyota Motor (TM 77.46, +0.71, +0.93%) (JP:7203 3,495, -25.00, -0.71%) gained 2.7% after providing Tuesday the clearest signal yet that it has stanched the bleeding associated with its global recalls, unveiling a surprise fiscal-fourth-quarter profit and forecasting an earnings increase this year as it attempts to boost sales in Asia and cut more costs.
In Seoul, a strong debut for Samsung Life Insurance helped support the market. The insurer ended the day at 114,000 Korean won ($100.5) a share on its debut, as compared with its initial public offering at 110,000 won, although it failed to latch on to its stronger early gains. The IPO is South Korea's largest to date.
The broad market ended lower although the Bank of Korea left its interest rates unchanged at 2%, as the central bank's statement was interpreted as being more hawkish. Shares of Korea Exchange Bank (KOOQF 12.38, -0.23, -1.83%) dropped 2.3% and KB Financial Group (KB 44.13, -1.90, -4.13%) lost 1.5%, while GS Engineering & Construction Corp. dropped 4.7%.
Indian banks and real-estate shares propped up the broad market in afternoon trade, offsetting sharp losses in telecom stocks. Shares of State Bank of India gained 1.9% and DLF climbed 1.4% in afternoon trading amid expectations that a normal monsoon forecast this year would support domestic consumption and economic growth.
