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Asia Ends Higher on Global Recovery Hopes

CNBC with wires
Tuesday, 5 Jan 2010 | 5:21 AM ET

Asian stock markets saw healthy gains on Tuesday, after a report showed that the U.S. manufacturing sector expanded for a fifth straight month.

Japan's Nikkei 225 average hit a 15-month closing high on Tuesday after solid U.S. manufacturing data boosted investor confidence in the economy, lifting shares of exporters.

But the market generally ran out of steam hurt by a slightly stronger yen and as SumitomoMitsui Financial Group trimmed earlier gains on news it is planning an $8.7 bn share sale.

The benchmark Nikkei inched up 0.3 percent to 10,681.83, its highest close since Oct. 3 2008, after rising as high as 10,791.04 at one stage. The broader Topix rose 0.4 percent to 919.57.

Japan Airlines rose 2.3 percent to 90 yen after the struggling airline said on Monday that more than two-thirds of its employees have agreed to proposed pension cuts, clearing one key hurdle in its push to reduce its pension shortfall, a prerequisite for a state bailout.

Resource shares such as trading house Mitsubishi Corp climbed 2.5 percent as commodity prices rose and oil shot higher on increasing demand amid cold weather in the United States.

Japan's top three banks -- Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group -- are among JAL's main creditors, and their shares suffered late last year from worries JAL would be restructured in bankruptcy court.

Mizuho rose 1.2 percent to 164 yen and Mitsubishi UFJ Financial Group edged up 0.2 percent to 452 yen. Sumitomo Mitsui Financial Group gained 1.4 percent to 2,653 yen.

Among the biggest gainers were resource-linked shares after the commodity rise, with copper soaring to a new 16-month high on Monday and other metals, such as aluminium and nickel, also climbed.

Mitsui & Co rose 3.1 percent to 1,376 yen, Mitsubishi Corp gained 3.2 percent to 2,391 yen and Itochu Corp climbed 3 percent to 715 yen. Inpex Holding ended 1.8 percent higher.

Australian stocks climbed to their highest close since the Lehman collapse in 2008, on fresh hopes of a global economic recovery after positive manufacturing reports from the United States, China and India.

The improved outlook for manufacturing bolstered metals and oil prices, which drove up mining and energy stocks, while banks also posted good gains.

The benchmark S&P/ASX 200 index closed up 48 points at 4,924.3, according to the latest data, reaching its highest close since September 2008.

New Zealand's benchmark NZX 50 index ended 1.2 percent higher at 3,268.2 on its first day of trade this year, also hitting a nearly 16-month high.

Global miner Rio Tinto advanced 1.9 percent to A$76.35, while BHP Billiton underperformed the market, rising 0.5 percent to A$43.28. Top gold miner Newcrest Mining jumped 2 percent to A$36.72 and rare earths miner Lynas Corp gained 5.3 percent to A$0.595.

Real estate investment trusts rose, with the A-REIT index jumping 3.3 percent as gains in sales of detached homes in Australia in November boosted residential developers like
Stockland Group and Mirvac Group.

Top home loan lender Commonwealth Bank of Australia also benefited, up 1.5 percent to post the biggest gain among banks.

Retailers were among the laggards, after The Warehouse Group, New Zealand's largest listed retailer, said sales were flat in the nine weeks to Jan. 3, weaker than it had expected.

Warehouse fell 3.3 percent to NZ$4.07. In Australia, The Reject Shop lost5 percent, Harvey Norman slid 2.9 percent and JB Hi-Fi declined 2.2 percent to A$21.86.

The South Korean market erased earlier gains to end down 0.33 percent, led by automakers but Samsung Electronics posted firm gains amid a rosy memory chip sector outlook.

Shares of the world's No.1 memory chip maker outperformed, rising 1.61 percent to 822,000 won, after briefly hitting their previous all-time high of 829,000 won.

Hyundai Motor tumbled 7.56 percent, and Kia Motors fell 5.53 percent. Analysts attributed sharp losses by automakers to the won currency's strength and rising concerns about their U.S. market share.

The Korea Composite Stock Price Index (KOSPI) finished down 5.52 points at 1,690.62 points.

Shares in Kumho Asiana Group related companies continued to tumble even after the group announced a rigorous self-rescue plan, including raising more than 1.3 trillion won ($1.1 billion) from asset sales.

Kumho Industrial slumped by the 15 percent limit for a third straight session, having shed more than 50 percent of their value in less than a month and half. Kumho Industrial ended at 6,030 won, its lowest close since May, 2004.

Kumho Tire was also limit-down, closing at a record low and down 44 percent since late November.

Hong Kong's benchmark Hang Seng Index gained 2.1 percent, driven by resources, exporters and gambling stocks.

Resources-related issues rose after prices for commodities gained overnight on growing signs of a global economic recovery.

PetroChina surged 4.2 percent, Aluminum Corp of China gained 2.41 percent and Realgold Mining climbed 5.02 percent. CNOOC advanced 2.78 percent and Jiangxi Copper was up 2.93 percent.

Exporters were higher on growing hopes that a recovery in the global economy would boost demand for electronics and other products shipped overseas. Yue Yuen Industrial rose
2.62 percent, Esprit Holdings gained 1.55 percent. Foxconn International Holdings was up 1.78 percent and Li & Fung was 1.39 percent higher.

Shares of Macau casino operators climbed, boosted by reports that gambling revenues in the enclave in December rose 48 percent from a year earlier, signalling sustained growth in the world's largest gambling market.

Shares of Sands China, the Macau unit of Las Vegas Sands, rose as much as 4.72 percent to a near three-week high of HK$10.42. Wynn Macau, a unit of Wynn Resorts advanced 3.56 percent to a three-week high of HK$9.89.

SJM Holdings, Macau gambling tycoon Stanley Ho's flagship firm, gained as much as 5.7 percent to its highest level in more than two months at HK$4.63.

China's key Shanghai Composite index chalked up 1.2 percent to 3,282.8 points, recouping its 1 percent loss yesterday.

In Southeast Asia, Singapore's STI rose 0.9 percent on a positive lead from Wall Street, supported by the country's big banks and other blue chips.

Malaysia's KLCI advanced 1 percent to an 18-month high of 1290.55 points, as buying momentum gathered pace from local funds and retail investors on renewed optimism over rosier economic outlook.

Shares of Alliance Financial Group fell after its unit Alliance Bank, one of the country's smallest lenders, reportedly put several top executives on forced leave pending
an internal probe.

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