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Asian Stocks Hit 1-Month Highs, Techs Climb

CNBC Staff with Wires
Monday, 14 Jun 2010 | 7:49 AM ET

Asian stocks rose to a one-month high on Monday, led by a rally in the technology sector, after semiconductor chipmakers last week gave positive news about demand, helping Wall Street recover early losses on Friday.

Japan's Nikkei average jumped 1.8 percent to close near a key resistance level as short-covering emerged on a sense the market had been oversold, with investors also taking heart from gains in the euro.

The benchmark Nikkei climbed 174.60 points to 9,879.85, its highest finish in about a week and almost matching its 25-day moving average of slightly above 9,880.

The broader Topix gained 1.4 percent to 878.56.

Chip-linked shares such as Advantest rose after U.S. peers gained on stronger-than-expected results by a major chipmaker that suggested improving demand, with strong U.S. consumer sentiment data reassuring investors about the health of the economy following an unexpected drop in retail sales.

The euro rose as far as $1.2207, before trading around $1.2175. It rose 0.4 percent to 111.70 yen.

Chip-tester maker Advantest gained 2.0 percent and Tokyo Electron added 1.2 percent. Chip stepper maker Nikon climbed 1.7 percent.

Sony rose 1.8 percent and Canon gained 1.6 percent to 3,775 yen. Panasonic extended Friday gains that took it up nearly 7 percent, rising 3.2 percent to 1,259 yen.

Foreign Buying Lifts Kospi

Seoul shares ended up 0.9 percent as steady buying by foreign investors sustained upside momentum, with gains led by retail and technology issues including Samsung Electronics.

"We are seeing investors slowing regaining confidence thanks to a recent stronger than expected U.S. economic data. Robust foreign buying also comes as a positive sign," said Kim Cheol-joong, a market analyst at Korea Investment & Securities.

Analysts said the impact of South Korean government forex controls announced on Sunday was muted.

"The impact (of the controls seems) to be limited and not very visible in the stock market, probably because they had been anticipated for some time," said Lee Sun-yeb, a market analyst at Shinhan Investment Corporation.

The Korea Composite Stock Price Index (KOSPI) finished up 0.91 percent at 1,690.60 points.

Foreign investors were buyers of a net 304 billion won ($244 million) worth of stocks, their second-biggest net daily purchase since late April.

Technology issues advanced after firm gains in the key U.S. semiconductor index.

Samsung Electronics, the world's No.1 memory chip maker, rose 1.25 percent and Hynix Semiconductor climbed 0.78 percent.

Shares in iriver jumped by the daily limit of 15 percent after the electronics firm said it had signed an agreement to set up a e-book joint venture with LG Display in China.

iriver and LG Display will invest combined a $5 million into the joint venture, L&I Electronics Technology, with iriver controlling 49 percent and LG Display 51 percent.

Airlines and transport outperformed as the sectoral outlook continued to strengthen, helped by gains in the won.

Asiana Airlines advanced 2.66 percent and Modetour, a leading tour agency, gained 2.84 percent.

"Airlines' second-quarter earnings are expected to come out very strong. We saw overseas passenger numbers rise rapidly in May," said Yoo Duk-sang, an analyst at Dongbu Securities.

Retail issues also advanced, with Lotte Shopping ending up 0.87 percent and Shinsegae Co up 1.54 percent.

Shares in Daewoo Shipbuilding & Marine Engineering advanced 2.41 percent after the world's No.2 shipyard said on Monday it had won a ship order worth 694.2 billion won from an unnamed European company.

Hang Seng Rises Above 20,000

Hong Kong stocks were up 1.1 percent on Monday after a jump in U.S. consumer confidence spurred a rally on Wall Street, but gains were capped by chart resistance from which the benchmark index has repeatedly backed away this month.

The Hang Seng Index chalked up 179.5 points at 20,051.91 in thin volume.

The China Enterprises Index of top locally listed mainland companies was up, with all constituents trading in the black.

Dongfeng Group, was the top performer, building on gains from Friday after the Chinese government extended a subsidy for replacing vehicles until the end of the year.

Taiwan's main TAIEX share index rose 1.2 percent to 7,387.40 points, a one-week intraday high, as investors chased technology exporters including chipmaker TSMC after gains on Wall Street raised optimism over demand for technology products.

The expected signing of a trade pact between Taiwan and China later this month also gave a boost to market sentiment, he said.

Local newspapers reported on Monday that TSMC was likely to receive new orders to make processors and micro SIM cards. J.H. Tzeng, a TSMC spokesman, declined to comment on the reports.

Smartphone maker HTC rose 0.84 percent after a U.S. trade panel said it would investigate allegations by HTC that Apple infringed on its technology.

In Southeast Asia, Singapore's Straits Times Index rose 0.8 percent while Malaysia's KL Composite gained 0.2 percent.

Australia markets were closed for the Queen's birthday while China's share markets were shut for Monday-Wednesday for the Dragon Boat Festival holiday.