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Asian Shares End Mixed; Australia Up 1%

CNBC with wires
Tuesday, 29 Dec 2009 | 6:00 AM ET

Asian stocks ended flat to higher on Tuesday, with Australian shares rising 1 percent.

Japan's Nikkei average eked out a four-month closing high, with trading firms such as Mitsui & Co rising after gains in oil and metals prices.

The benchmark index gained 3.83 points or 0.04 percent to 10,638.06, while the broader Topix edged up 0.1 percent to 915.87.

Trading houses gained after oil touched a five-week high over $79 a barrel as expectations of colder weather in the United States and signs of economic recovery boosted the outlook for
fuel demand.

Mitsui & Co rose 2 percent to 1,329 yen and Mitsubishi Corp gained 1.5 percent to 2,315 yen.

But Japan Airlines fell 8.3 percent following media reports that a state-backed turnaround fund now weighing whether to support JAL was considering a bankruptcy filing as one component of its restructuring plan.

Shares of Japanese exporters took a breather. Electronics parts maker Kyocera Corp fell 1.4 percent, chip-tester maker Advantest Corp lost 2.2 percent and Canon slipped 1.2 percent.

Seoul stocks declined following a four-session gaining streak and as the ex-dividend effect took hold of the main index on Tuesday, with losses in telecoms issues weighing on markets.

The Korea Composite Stock Price Index (KOSPI) was down 0.7 percent at 1,672.48 points.

Listed companies that close their financial years in December went ex-dividend on Tuesday, the exchange said. After companies go ex-dividend, investors no longer qualify for the nearest dividend payout.

The ex-dividend impact shaved an estimated 17.58 points off the main KOSPI index at the open, according to a statement from the Korea Exchange.

Units of Kumho Asiana Group led the way down, including Kumho Tire, whichdived 12.6 percent to 4,240 wondue to renewed liquidity worries.

Telecommunications issues, which tend to pay out heavy dividends, also declined. KT, South Korea's dominant fixed-line operator and No.2 mobile carrier, said on Monday that about 16 percent of its workforce would leave under an early retirement program.

Shares related to a major UAE power deal advanced for a second day. A consortium led by KEPCO had secured a $40 billion contract to build and operate four nuclear reactors in the UAE.

Korea Power Engineering and KR Plant Service & Engineering, both units of KEPCO that specialize in power plant businesses, were up 11.48 percent and 3.57 percent respectively.

Hyundai Engineering & Construction rose 1.27 percent and Samsung C&T climbed 1.09 percent.

Key blue chip exporters also rose, with LG Display, the world's No.2 maker of flat panels, advancing 1.04 percent and Hyundai Motor, South Korea's top automaker, climbing 0.24 percent.

Shares in Hyundai Heavy Industries rose 1.45 percent on news Abu Dhabi Gas Liquefaction Company (ADGAS) formally signed an agreement worth $1 billion with Hyundai Heavy for the construction of an integrated gas development plant.

But banks retreated, with KB Financial losing 0.33 percent and Shinhan Financial
declining 1.22 percent.

Australian stocks ended 1.1 percent higher at a nine-week high, supported by gains in resource stocks, banks and fresh merger interest in Australian farm-chemicals group Nufarm.

The benchmark S&P/ASX 200 index closed up 54.3 points at 4,845.1, its highest close since Oct. 26.

New Zealand's benchmark NZX 50 index ended up 0.62 percent at 3,225.1, its highest close since Oct. 21.

While trading volume was light with many participants on holiday, analysts said the market was buoyed by a view that global economies are on the path to recovery, auguring well for
markets.

Miners benefited from rising oil and metals prices. BHP Billiton, the world's biggest miner, gained 1.06 percent to A$42.92, a near 18-month high, while Newcrest Mining, Australia's largest gold miner, was up 0.4 percent to A$35.28.

Shares in Nufarm rose by as much as 5.1 percent before easing back to trade up 2.8 percent at A$10.86 after the firm rejected a lowered takeover bid from China's Sinochem and unveiled an equity partnership proposal with Japan's Sumitomo Chemical.

Sumitomo Chemical offered to buy shares from existing Nufarm shareholders for A$14 each to take a stake of up to 20 percent in the Australian company. Trading is expected to be light in the three trading days between Christmas and the New Year holiday.

Other chemical stocks also advanced, with Incitec Pivot up 1.7 percent at A$3.54 and Penrice Soda up 4 percent at A$0.87.

Bank stocks extended pre-Christmas gains, with the country's top lender, National Australia Bank up 1.8 percent to A$27.18. Australia and New Zealand Banking Group closed 1.4 percent higher at A$22.70.

Retail stocks finished mixed in the wake of the Christmas sales period. Australia's dominant supermarket chains led the charge with Wesfarmers advancing 2.6 percent to A$31.02 and Woolworths up 0.9 percent at A$27.67.

But sellers of consumer electronics fared worse. Shares in Harvey Norman lost 1.4 percent and JB Hi-Fi declined 2.3 percent at A$21.72.

Drinks companies Fosters Group and Coca-Cola Amatil added 1.1 percent to A$5.55 and 1 percent to A$11.62, respectively.

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