Asia-Pacific Markets

Asian Stocks Close Higher After US Rally

CNBC with wires

Asian stock markets tracked a strong session on Wall Street, which saw the Dow climbing more than one percent to end at its highest level so far this year. Key indices in Seoul and Hong Kong chalked up over 1 percent each.

Investors shifted funds back into equities as fears eased about potential negative impact from Dubai's debt repayment problems. Upbeat U.S. home sales and analysts' forecasts that China's economy could grow by 10 percent or more this quarter also helped sentiment.

Pending sales of previously-owned U.S. homes rose unexpectedly to the highest level in 3-½   years in October, suggesting that the housing market recovery was gaining pace.

The region's miners outperformed, boosted by rising metals prices. Copper surged to a 15-month high. Aluminium and zinc prices also jumped. Gold hit a record for a second straight day, with spot gold above $1,210 a troy ounce in Asian trade Wednesday.

Japan's Nikkei Average closed higher on Wall Street's rally
and hopes that the Bank of Japan's additional monetary easing measures may at
least help prevent a sharp strengthening of the yen for now.

The BOJ said after the market close on Tuesday that it would offer 10 trillion yen ($115 billion) in new short-term funds, but stopped short of more aggressive measures to support
the economy.

The benchmark index went through a choppy session, drifting in and out of negative territory, before closing up 36.74 points, or 0.4 percent, to 9608.94. The broader Topix edged up 0.1 percent to 858.7.

Steel and auto stocks led the market. Nippon Steel rising 2.7 percent and JFE Holdings rose 2.4 percent. Automakers gained after relatively solid U.S. auto sales data, with Nissan Motor
up 2.5 percent and Honda Motor up 2.1 percent.

Metals shares such as Sumitomo Metal Mining, a non-ferrous metal smelter, rose 1 percent as positive manufacturing data in the United States and China bolstered the economic outlook.

Fellow smelter Dowa Holdings gained 2.3 percent, and Nippon Light Metal rose 3.9 percent.

Showa Denko rose 3.2 percent to 162 yen after the Nikkei business daily said the company would increase its production of parts for hard disk drives (HDD) by March 2010.
Kadokawa Group fell 6.7 percent to 2,235 yen on news the publisher would issue 10 billion yen worth of convertible bonds to repay debt and for investments.

South Korea's KOSPI climbed 1.4 percent to its highest close in a week and nearly recovering losses suffered on fears over the Dubai debt situation.

The Korea Composite Stock Price Index finished up 21.9 points at 1,591.63, after rising to as high as 1,597.12 points.

Memory chip makers powered ahead, helped by a rise in the U.S. semiconductor index. Samsung Electronics rose 1.3 percent and Hynix Semiconductor surged 6.2 percent.

Banking issues also firmed as investor appetite for the sector continued to strengthen. KB Financial Group gained 2.2 percent and Shinhan Financial Group climbed 1.7 percent.

Hyundai Motor pared gains after advancing 1.4 percent to close 0.49 percent higher. A strong set of U.S. November sales data showed that Hyundai's sales rose 58.6 percent from a year earlier.

Australian shares ended 0.9 percent higher, driven by resources companies as gold, oil
and metals prices rose with a falling U.S. dollar, and receding debt problems in Dubai and signs of U.S. growth lifted sentiment.

The benchmark S&P/ASX 200 index gained 43.4 points at 4,762.4, adding to Tuesday's 0.4 percent rise.

The materials index jumped 2.1 percent, with top miner BHP Billiton rising 1.4 percent to A$41.92 and Rio Tinto climbing 3 percent to A$73.54.

Gold miners soared as gold hit a record above $1,210 an ounce. Newcrest Mining jumped 5 percent to A$39.26, while Lihir Gold rose 4.2 percent to A$3.73.

Copper miners were also in demand, with copper prices running up to a 15-month high. Kagara and Equinox Minerals both climbed 7.4 percent. Oz Minerals rose 5 percent to A$1.255.

The rejection of the government's carbon trading scheme in the Senate for a second time lifted shares of manufacturers like Bluescope Steel and OneSteel.

Nufarm slumped 6.5 percent to A$10.51 after extending talks on a proposed A$2.8
billion ($2.6 billion) takeover by Chinese state-owned Sinochem to December 23.

New Zealand's benchmark NZX50 index gave up most of its gains to end up 2.8 points at 3,149.4.

The main TAIEX share index advanced 0.37 percent or 28.3 points to close at 7,677.62, adding to Tuesday's 0.88 percent gain.

Cathay Financial rose 1 percent, Chinatrust and Fubon pared gains but closed 0.5 percent and 0.7 percent higher, after China said it hoped a currency clearing system with Taiwan would be ready soon.

That news also lifted real estate plays, as the currency clearing system could lead to more Chinese investments in the island's property market.

Farglory rose 2.56 percent, in line with the broader construction sub-index's 2.74 percent advance.

The Chinese market gained 1 percent in afternoon trade, with bank and metals shares strong as confidence mounted that China would keep its economic policy mostly steady in the year
ahead while talk of possible government support for banks lifted sentiment.

Shanghai Composite Index gained 34.4 points at 3,269.75 points, up for a third consecutive session after a sell-off last week shook out nervous investors worried by official warnings over asset price bubbles.

The banking sector rose on market talk that Central Huijin, an arm of China's sovereign wealth fund, may reinject dividends it receives from the four biggest state-owned banks this year,
helping to ease pressures to raise funds, which had recently weighed on share prices.

The country's biggest lender, Industrial and Commercial Bank of China, advanced 1.71 percent to 5.35 yuan, while Bank of China rose 1.21 percent to 4.19 yuan.

Metals shares were firmer, with Shandong Gold up 3.17 percent at 87.63 yuan after U.S. gold futures hit a record high.

Hong Kong's benchmark Hang Seng Index rose 0.8 percent to 22,289 points, as gold counters soared and shares of Geely Auto jumped.
Gold miners got a boost after U.S. gold futures rose to a record high on Wednesday as weakness in the dollar spurred buying of the precious metal as an alternative investment.

Realgold Mining rose 3.6 percent to HK$15.36, Sino Gold Mining gained 7.5 percent to HK$59.65 and Zijin Mining advanced 4.6 percent to HK$9.05
Geely Auto surged more than 9 percent to an all-time high before paring gains, following a report that its parent was a step closer to completing its acquisition of Ford Motor's Volvo

Securities trading firm UBA Investments jumped 18 percent, the market's second-highest percentage gainer after the firm swung to profit for the six months ended September on the back of a stock market rally in Hong Kong.

In Southeast Asia, markets in Singapore and Malaysia advanced. The STI rose 0.9 percent and the KLCI edged up 0.4 percent.

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