SINGAPORE (Dow Jones)--Most Asian markets advanced Monday as strong Chinese exports data and extended gains on Wall Street aided sentiment in the region. "The Chinese trade data add to the bullish leads inherited from Wall Street," said IG Markets strategist Ben Potter. "They suggest the global economy is still reasonably strong." The Nikkei Stock Average lost 0.4% to 9,548.11 in Tokyo, while China's Shanghai Composite gained 0.8%, Hong Kong's Hang Seng Index advanced 0.4%, Australia's S&P/ASX 200 rose 0.3% and South Korea's Kospi added 0.6%. In afternoon trade, India's Sensex edged 0.6% higher, while Singapore's Straits Times Index was up 0.3%. Dow Jones Industrial Average futures were 41 points lower in screen trade. Sentiment got a boost in some regional markets after Saturday's data showed China's exports in June grew 43.9% from the year-earlier month to a record $137 billion, beating estimates. The exports data suggested that global growth was holding up despite disappointing U.S. economic data. "We think this data point will provide a slight support for market sentiment in the very short term, as it helps ease some investors' concern on the impact of global deceleration on China's export performance," Jun Ma, Deutsche Bank's chief economist for Greater China, wrote in emailed comments. However, "despite the fact that quarter-on-quarter export growth may remain acceptable in the third quarter, fixed asset investment-led economic slowdown will nevertheless occur and will dominate the growth outlook," he added. Chinese banks broadly advanced on hopes policy makers will not introduce more credit tightening measures after the latest loans data. Financial institutions in China extended CNY603.4 billion worth of new CNY loans in June, central bank data showed Sunday. That was higher than estimated by analysts, but lower than the CNY639.4 billion worth of new loans extended in May, highlighting the central bank's efforts to curb lending as Beijing works to gradually cool the domestic economy. Bank of China rose 0.9% and China Merchants Bank advanced 2.1% in Shanghai; the stocks added 1.2% and 1.3% in Hong Kong. Tokyo-traded stocks went on a rollercoaster ride on fears of political uncertainty after the ruling Democratic Party of Japan's losses in Sunday's Upper House elections. The DPJ claimed just 44 seats of the 121 seats contested -- less than 40% of the total -- down from 54. In last year's election, the DPJ took 64% of the seats at stake. Junko Nishioka, an economist at RBS Securities, said DPJ's crushing defeat implied a "weakening of the political foundation and difficulty of doing business with the Diet," Japan's parliament. "If equity prices continue to decline, it could increase the risk of the economy experiencing a double-dip even though business activity has been in good shape so far," he added. Fast Retailing was the single largest negative drag on the market falling 1.8% to Y12,570 while several drug makers were also down with Takeda Pharmaceutical off 1.2% and Astellas 2.6% lower. But some exporters were bucking the broader market's declines due to a weaker yen with Honda Motor up 3.1% and Sony 3.6% higher. Australian stocks ended higher, but sentiment and trading volumes were subdued as investors were unwilling to make big bets before Alcoa kicks off the U.S. earnings season later on Monday. Macquarie Private Wealth Division Director Martin Lakos said the strong China exports data should be a plus for market sentiment. "It's been a sluggish start to the week," said Mr. Lakos. "There are a lot of U.S. and Chinese economic data due this week, as well as U.S. earnings. But the offshore leads were reasonably positive over the weekend." Rio Tinto gained 1.0% and BHP Billiton advanced 0.5%. Shares of DuluxGroup rose on their debut, following the company's spinoff from mining industry products and services firm Orica. Dulux shares ended at A$2.54, higher than its listing price of A$2.50, but lower than the day's high of A$2.78. In Seoul, auto stocks and battery makers led gainers, with Hyundai Motor Co. rising 1.4% and Kia Motors Corp. up 1.2%. Battery makers were higher after local news agency Yonhap reported the government on Sunday said that it would invest KRW15 trillion in the rechargeable battery industry over the next 10 years. Samsung SDI Co. advanced 4.6% and LG Chem climbed 4.8%. Elsewhere in the region, Taiwan's Taiex ended 0.1% lower, New Zealand's NZX-50 rose 0.2% and Philippine shares ended 0.4% higher. By late afternoon, Thailand's SET Index was down 0.1% and Indonesian stocks rose 0.5%. In foreign exchange markets, the U.S. dollar was earlier up against the yen following the weekend's Upper House elections before returning some gains later in the day. The dollar was at Y88.60 from Y88.65 in late New York trade on Friday, compared with the day's peak at Y89.16. The euro declined to Y111.38 from Y112.07 Friday. Against the greenback, it was changing hands for $1.2571 from $1.2641. The DPJ's big loss could be yen-positive because Prime Minister Naoto Kan's influence in the ruling party and the coalition should decrease, said Barclays Capital chief Japan currency analyst Masafumi Yamamoto. Mr. Kan has in the past supported a weaker yen. "There is even the risk that Kan won't be re-elected as the leader of the DPJ at September's intra-party presidential election," Mr. Yamamoto said. Lead September JGB futures rose 0.24 to 141.45 points, while the yield on the 10-year cash JGB was down 3.5 basis points at 1.120%. Spot gold was at $1,205.50 per troy ounce, down $5.90 from late New York trade Friday. Nymex August crude-oil futures were down 55 cents at $75.55 per barrel. -Dow Jones Newswires; +65-6415-4140; markettalk@dowjones.com

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