Asian Markets Bounce, Japan Breaks Losing Streak
Asian stocks bounced Tuesday, extending gains as a rally in U.S. financial shares helped Japan break a 10-session losing streak, while also reversing a little of the recent safe-haven rush into the yen.
Helping was upbeat news from Singapore, as economic growth in the trade hub climbed 20.4 percent annualized in the three months to June, putting an end to four quarters of contraction.
Analysts said other export-dependent Asian economies were also expected to see improved second quarters, but questioned whether improvements can be sustained amid still weak consumer demand in the region's major Western markets. Unease ahead of key data on U.S. retail sales and a slew of U.S. corporate earnings including banking giant Goldman Sachs, was enough to to keep commodity prices subdued and oil pinned around $60 a barrel.
The tentative pick up in stocks seemed to lessen the need for safe havens like the Japanese yen , which eased across the board. The dollar inched up to 92.94 yen, while the euro firmed to 129.95 yen , from a trough around 127.95. The single currency was steady on the dollar around $1.3982. The Australian dollar got a lift to $0.7839 after a surprisingly strong survey of Australian business conditionswas seen as lessening the need for further cuts in interest rates.
Japan's Nikkei 225 Average gained 2.3 percent to snap a nine-day falling streak, with banks buoyed by upbeat analyst comments about the U.S. financial sector
and exporters lifted by a halt in the yen's sharp appreciation. Nissan Motor surged more than 7 percent on its plans to boost production capacity in China, while Komatsu jumped more than 6 percent after the Nikkei business daily said the company returned to profitability in the April-June quarter.
Seoul shares ended half a percent higher after volatile trade, with gains led by banks and steel
issues including POSCO, but markets trimmed earlier 1.7 percent gains as shipbuilders and OCI retreated.
Australian stocks finished 3.5 percent higher, led by mining giant BHP Billiton, helped by better economic news at home and abroad, though traders played down the move pointing to extremely thin trade volumes.
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Hong Kong stocks rebounded from a seven-week low, up 2.3 percent, after strong gains on Wall Street spurred bargain-hunting in banks and financials, but traders said the rally could fizzle out as fears about the broader economy weighed. Tsingtao Brewery surged 6.7 percent to a 17-month high after the brewer said it expected first-half profit to increase 60-70 percent year on year.
Singapore's Straits Times Index advanced 1.9 percent. Singapore Press Holdings rose 2.2 percent after JPMorgan raised its price target for Singapore's largest publishing firm to S$3.95 from S$2.71 a share. SPH reported a lower-than-expected drop in profit for its fiscal third quarter.
China's Shanghai Composite Index closed 2.1 percent higher, boosted by solid gains in overseas stocks and hopes for an improving earnings outlook. Financial shares led gains. Ping An Insurance jumped after saying premium income in the first half rose 36 percent from a year earlier to 73 billion yuan.