Expectations of a further cut in U.S. interest rates buoyed most Asian stocks Tuesday. Japan finished nearly up 3 percent, but the Australian market bucked the positive trend to close almost 2.5 percent lower.
Gold hit a record high just short of $930 an ounce. Platinum also hit an all-time high, of $1,735 an ounce while silver commanded prices not seen for 27 years as expectations of a weaker dollar added to supply pressure from disrupted output in South Africa.
All three major U.S. stock indexes gained more than 1 percent on Monday as investors snapped up shares of manufacturers and downtrodden banks after more weak housing data bolstered expectations of a follow up to last week's emergency rate cut. The Federal Reserve holds its latest policy meeting on Wednesday, with markets expecting a further 50 basis point rate cut.
The Nikkei 225 Average jumped nearly 3 percent, with banks riding a wave of short-covering on hopes for a U.S. rate cut and shipping firms powering up on good earnings for industry leader Nippon Yusen. Trading houses gained on record prices for gold and platinum as well as hopes for good results later this week, with property shares such as Sumitomo Realty & Development rising on short-covering.
Seoul stocks rose 0.7 percent, bouncing after the prior session's selloff, with firms sensitive to overseas demand such as technology and steel makers gaining on growing bets for another deep U.S. rate cut this week. Top South Korean lender Kookmin Bank rose following a newspaper report that it was buying up to half of Kazakhstan's No. 6 bank, CenterCredit for 1 trillion won ($1.05 billion).
Australian shares fell 2.45 percent, reacting to big falls in Asian markets the previous day when the market had been closed for a public holiday. The big four banks fell, led by Commonwealth Bank. Investment banks also suffered with Macquarie Group down over 5 percent.
Singapore's FTSE Straits Times Index was 0.3 percent higher, rebounding from yesterday's 3.8 percent losses. Financial shares such as United Overseas Bank and DBS Group were on the advance.
Hong Kong stocks ended 1 percent higher after weak U.S. housing data reinforced hopes of a Fed rate cut this week, boosting shares in rate-sensitive local property developers. Coal shares advanced further after China ordered a halt to coal exports for at least the next two months to help end its most severe power crisis yet.
China's Shanghai Composite Index rebounded, closing 0.9 percent higher, with investors encouraged by stronger overseas markets, but the Chinese recovery was sluggish and turnover shrank further. Many analysts said Monday's 7.19 percent plunge, triggered by falling global markets as well as disruption to transport, energy and food supplies due to heavy snows across China, was excessive. The official China Securities Journal quoted fund managers as saying their funds had not suffered large-scale redemptions, which was positive news. Also, the China Securities Regulatory Commission on Tuesday proposed new rules for brokerages' asset management business, a preparatory step toward resuming the business after it was suspended for several years during an industry-wide clean-up.