Published: Wednesday, 4 Nov 2009 | 5:06 AM ET

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Asian stock markets finished higher in lackluster trade on Wednesday, as investors stayed cautious ahead of a U.S Federal Reserve statement on interest rates and the economy.

The Nikkei Average

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[JP;N225  Loading...      ()   ] rose, with Fast Retailing climbing on a surge in sales at its Uniqlo clothing stores but chip-related stocks lost ground after Morgan Stanley downgraded the U.S. semiconductor sector to "cautious".

Shionogi & Co extended gains after saying it has applied for approval of its experimental influenza treatment, while Japan Steel Works surged after the maker of thermal and nuclear power generator parts lifted its full-year operating profit forecast.

In thin trade, the benchmark Nikkei added 41.36 points to 9,844.31, after sliding 2.3 percent on Monday to hit a three-week closing low. Japanese markets were closed on Tuesday for a national holiday.

The broader Topix was virtually flat at 881.27.

Seoul Reverses Losing Streak as Banks Rebound

Seoul shares staged a rebound, reversing a six-day losing run, with Korea Exchange Bank (KEB) soaring on strong quarterly results and brokerages rallying on hopes the market might have bottomed out.

The gains spread to technology and other sectors towards the close, although analysts said the rebound mostly appeared technical in the absence of fresh leads from economic and corporate fronts.

The Korea Composite Stock Price Index rose 1.94 percent to close at a session high of 1,579.93 points.

The benchmark index had declined 10 percent since touching a 15-month high in late September as of Tuesday, pulling technical indicators near oversold territory.

KEB, the country's sixth-largest bank, leapt 7.81 percent to 13,800 won in heavy trade, scoring its biggest daily percentage gain since late May. The lender, 51 percent owned by U.S. private equity house Lone Star, posted a forecast-beating quarterly profit on Tuesday after the market close, reviving optimism for the sector.

Daewoo Securities also led gainers in active trade, up 7.34 percent, while Samsung Securities, South Korea's most valuable brokerage stock, gained 6.29 percent.

Australia Edges Up, Miners & Banks Gain

Australian shares ended up 0.2 percent, helped by banks after Westpac Banking Corp said the bad debt cycle had peaked, while gold miners led gains after gold scaled a new record high.

Westpac, the last of the big banks to report its full year results, was the best performer among the banks, climbing 1.4 percent to A$24.79 after it narrowly beat analysts' forecasts.

Analysts said however that banks may not give the market the same impetus in coming sessions since the sector as now seen as fairly priced following a sharp run-up since March.

National Australia Bank fell 0.9 percent to A$28.15, while Australia & New Zealand Banking Group rose 0.7 percent to A$22.73 and Commonwealth Bank of Australia
rose 0.2 percent to A$51.37.

The benchmark S&P/ASX 200 index

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[AU;XJO  Loading...      ()   ] picked up 8.6 points to close at 4,540.1, reversing Tuesday's small loss.

Among gold miners, Kingsgate Consolidated notched up the biggest gain, rising 10.4 percent to A$8.39, followed by St Barbara, which rose 7.8 percent to A$0.345.

Top miner BHP Billiton rose 0.5 percent to A$36.94 while Rio Tinto rose 1 percent to A$63.43.

China Gains on Upbeat Economy, Earnings Outlook

China's key stock index rose 0.46 percent to end at a nearly three-month closing high on Wednesday, led by metal shares, continuing a rally this week fuelled by optimism over the economic recovery and sharply improving corporate earnings prospects.

The Shanghai Composite Index finished 0.46 percent higher at 3,128.537 points, its highest close since Aug. 13, having risen more than 4 percent so far this week.

Gaining Shanghai A shares outnumbered losers by 557 to 311 as turnover remained active at 164 billion yuan ($24 billion), although that was down from Tuesday's 170 billion yuan.

In the latest evidence of China's recovering economy, the World Bank on Wednesday raised its forecasts for Chinese growth this year and projected a slightly faster pace of expansion in 2010, but it said Beijing did not need to embark on major policy tightening at this stage.

Shandong Gold outperformed the market, ending up 2.11 percent at 69.79 yuan, after gold prices hit a record $1,088 per ounce following news that India's central bank bought 200 tonnes of the metal from the International Monetary Fund. Rival Zijin Mining  rose 1.5 percent to 9.49 yuan.

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