Asia Steady After Profit Taking; Earnings Eyed

Asian shares ended mixed on Wednesday after rounds of profit taking from a sharp rally at the start of the new year subsided, while investors waited warily for corporate earnings season to kick off in full force.

U.S corporate reporting season kicked off after market-close on Tuesday with Alcoa posting better than expected earnings, but Jason Hughes, Head of Premium Client Management, IG Markets warned in a note that despite the good news, "analysts have been cutting back forecasts for earnings so the bar is already low."

ASX 200
CNBC 100

The FTSE CNBC Asia 100 index increased by 0.1 percent.

Japan's Nikkei average rose, as a halt in the yen's gains prompted investors to buy shares of exporters such as Toyota Motor and Honda Motor who would gain from a more competitive currency.

The index also gained support from news that the Bank of Japan will consider easing monetary policy again this month as it eyes doubling its inflation target.

The benchmark index closed up 0.67 percent at 10,578.5 on Wednesday, while the broader Topix gained 0.8 percent to 879.05.

Exporters reversing early losses included Toyota Motor, Honda Motor, Nikon and Daikin Industries, up between 0.6 and 1.6 percent. But Canon and Panasonic remained weak, down 1.2 and 0.2 percent, respectively.

Convenience store operator Seven & I's jumped 1.6 percent after its quarterly operating profit rose 4.8 percent as higher profits from its core 7-Eleven stores were supported by stronger income figures at other retail formats.

Construction shares also attracted buying, with Kajima rising 1.8 percent and Taisei climbing 2.1 percent on expectations that the new government will increase spending on public works.

Australian shares rose 0.4 percent, breaking a three-day losing streak as top miners and major banks helped to offset declines in department stores and some gold miners.

The S&P/ASX 200 index added 17.8 points to 4,708.1.

Alumina rallied 4.6 percent after Alcoa beat expectations on revenue. Alumina holds 40 percent of Alcoa World Alumina & Chemicals (AWAC), the world's largest alumina business, while U.S.-based Alcoa owns 60 percent.

Top miners managed to stay in positive territory at the close, with BHP Billiton gaining 0.2 percent and Rio Tinto adding 0.3 percent, after rounds of profit taking from a recent rally.

Supermarket chain Woolworths climbed 1.5 percent, reflecting a steady growth in groceries. Myer Holdings fell 2.7 percent as the government report showed department store sales fell 0.4 percent in November.

New Zealand's NZX 50 index extended gains by 0.3 percent to close at a fresh 5-year high of 4,103.5.

South Korean shares fell for a fifth straight session as investors remained cautious about the lacklustre outlook for upcoming fourth-quarter corporate earnings results.

The benchmark Korea Composite Stock Price Index fell 0.31 percent to close at 1,991.81 points.

Blue chips were mostly down. Tech heavyweightSamsung Electronics closed flat, failing to regain ground after a four-session losing streak.

Among small- and mid-cap stocks, Tongyang rose 5.5 percent and Tongyang Networks rose by the daily limit of 15 percent. The Korea Economic Daily reported on Wednesday that Tongyang Networks had ended negotiations to sell its IT service business to IBM's South Korean unit for 50 billion won ($47 million).

China shares closed flat, paring losses after Reuters reported that the mainland IPO market could be frozen until the end of March, a move that would reduce competition in the A-share market.

The Shanghai Composite Index and the CSI300 of top Shanghai and Shenzhen listings both closed flat. Both indexes have been hovering near its highest since mid-June after a strong December surge.

Hong Kong shares rebounded from its lowest in a week, resuming a start-of-the year rally that has the main indexes headed towards multi-month highs, with Chinese banks stronger following a brokerage's upgrade for the sector.

The Hang Seng Index ended up 0.5 percent at 23,218.5, recovering from its lowest close since December 31 set on Tuesday. The China Enterprises Index of the top Chinese listings in Hong Kong rose 0.9 percent.

Bank of China (BOC) climbed 1.1 percent to HK$3.59 after UBS raised its price target by 31 percent from HK$3.05 to HK$4, citing its attractive valuation that make BOC the least expensive among the larger H-share banks.

China Railway Group jumped 5.1 percent and China Railway Construction rose 3 percent after JP Morgan analysts raised their price target for both these stocks by about 40 percent.

MGM China shares jumped 7 percent after the company received government approval for a $2.5 billion Macau casino.

Over in Southeast Asia, Singapore's Straits Times Index closed 0.5 percent higher while Malaysia's KLCI Composite Index ended up 0.06 percent.

In India, the BSE Index finished 0.4 percent lower and the 50-share NSE Index closed down 0.5 percent.