Asian Markets Cheered by Intel, Yen Takes a Breather

Asian markets extended gains Wednesday as blockbuster results from tech bellwether Intel seemed to augur well for the U.S. earnings season and for consumer demand globally. Hong Kong's Hang Seng Index also managed to breach the 18,000 level.

The main U.S. share indices gained up to 0.5 percent, lifted by a strong rise in quarterly profit at investment bank Goldman Sachs, while chipmaker Intel also reported a solid result after trading had finished. Intel stock was up about 7 percent in afterhours trade.

The results offset a report showing U.S. retail sales remained sluggish, with the headline figure supported by a jump in car and petrol sales while core sales were lower for a fourth consecutive month.

The Australian dollar benefited from a return to risk, rising to a one-week high and leaving behind Monday's $0.7700 low. The yen was the major loser as a safe-haven, with the dollar reaching 93.50 yen from a 91.72 trough early in the week, while the euro firmed to 130.80 yen. Oil prices edged above $60 a barrel on ongoing global demand worries.

Japan's Nikkei 225 Average closed flat, giving up earlier gains made on upbeat results from Goldman Sachs and Intel after investors grew cautious ahead of more earnings in the United States and Japan. The Bank of Japan voted unanimously to extend its corporate funding support measuresbeyond their planned expiry in September, and it kept interest rates on hold. The impact was limited as the moves were within expectations.

South Korea's KOSPI finished 2.6 percent higher, powered by a rally in chipmakers on Intel's strong results and sharp gains in financial and transportation stocks. Samsung Electronics jumped 5 percent, hitting a 13-month intraday high at one point. KB Financial Group surged nearly 7 percent and Kia Motors climbed 5.47 percent.

Australian stocks ended up 1.5 percent, hitting a two-week closing high as strong earnings from Goldman Sachs revived investor appetite for risk and boosted shares as Macquarie Group.

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In markets still trading, Hong Kong shares gained 1.6 percent, to move above the 18,000 level. Air China shares soared over 6 percent after an upbeat profit forecast from China's flag carrier. Air China said it expected to see at least a 50 percent year-on-year rise in profit for the first half of 2009. China Cosco, the country's largest shipping conglomerate, jumped 5.8 percent, while bulk carrier China Shipping Development rose 5.3 percent, tracking strong gains on the main sea freight index.

Singapore's Straits Times Index was up 1.6 percent with banks such as DBS Group, up 1.7 percent and United Overseas Bank, up 1.5 percent leading the advance.

China's Shanghai Composite Index added 1 percent, held up by on hopes for a solid economic recovery, backed by China's fine-tuning of monetary policy. Annual growth in China's broad M2 measure of money supply surged in Juneon the back of breakneck bank lending ordered by Beijing to pump up the world's third-largest economy.