Asian Stocks Rebound but Caution Prevails

Asian stock markets staged a rebound on Wednesday, after Wall Street made a comebackfrom earlier session lows, helping U.S. indexes end mostly flat after first falling more than 3 percent on growing questions about the stability of the European banking system.

Japan's Nikkei average closed 0.7 percent higher, a day after tumbling to a six-month low, but gains were kept in check by fears about the euro zone's debt crisis and banking system.

The benchmark Nikkei ended up 62.77 points at 9,522.66 after climbing as much as 1.7 percent to 9,622.40. On Tuesday the Nikkei dropped 3.1 percent to its lowest finish since Nov. 30.

The broader Topix fell 0.1 percent to 859.00.

Concerns about a possible "hard landing" for China's economy and rising tensions on the Korean Peninsula have also kept investors leery of taking on risk and helped push the Nikkei down
more than 16 percent in recent sessions from an 18-month high marked in April.

Shares of exporters advanced on bargain-hunting after helping Japanese stocks fall to a six-month closing low on Tuesday.

Chip-tester maker Advantest climbed 2.8 percent to 2,014 yen and Tokyo Electron rose 3 percent to 5,220 yen. Olympus added 2.2 percent to 2,285 yen.

Nippon Yusen and other shipping companies rose after the Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose 6.2 percent to its highest in six months. The boost came from better cargo demand and tight vessel availability.

Nippon Yusen climbed 3.2 percent to 322 yen, while Mitsui O.S.K. Lines jumped 5 percent to 630 yen.

Trading houses also gained as commodity prices firmed, with metals advancing after steep losses the previous day and oil rising nearly a dollar towards $70.

Mitsui & Co rose 3.7 percent to 1,251 yen and Mitsubishi Corp climbed 3.1 percent to 1,973 yen.

Shares of Brother Industries advanced 3.9 percent to 964 yen after the company raised its profit forecasts for the first half to Sept. 30, citing strong sales of a machine tool used to punch holes in electronic components.

Dai Nippon Printing also gained, rising 3.3 percent to 1,138 yen after the Nikkei business daily reported that the printing firm plans to cut 50 billion yen ($553 million) in costs, mainly in its manufacturing division in the year to March 2011.

Dai Nippon hopes the move will help the firm reach a double-digit rise in operating profit for a second straight year, the paper said.

Kospi Ends Higher

Seoul shares turned up to finish on positive ground late in the session, as domestic investors picked up bargains among the debris after sharp falls the previous day.

The Korea Composite Stock Price Index (KOSPI) ended up 1.36 percent at 1,582.12 points, led by gains in tech and auto stocks.

North Korea announced on Tuesday that it was cutting all ties with South Korea in retaliation for Seoul imposing sanctions on Pyongyang for torpedoing one of its warships.

Memory chip makers outperformed the broader market, due to a 6 percent jump in the key U.S. semiconductor index.

Samsung Electronics, the world's No.1 memory chip maker, was up 1.21 percent and Hynix Semiconductor, the world's No.2, advanced 3.78 percent.

Auto parts maker Mando continued to soar, rising 3.14 percent to 115,000 won, a near 39 percent increase from its IPO price since its debut last week.

"Mando's IPO pricing was set very attractively, as book builders at the time were a bit unsettled by the European debt crisis," said Suh Sung-moon, an analyst at Korea Investment & Securities.

"It is also riding on automakers' positive earnings momentum. About 62 percent of its sales come from Hyundai Motor and Kia Motors, and they are doing very well," Suh added.

Kia Motors rose 8.21 percent and Hyundai Motor advanced 0.37 percent.

Financial plays continued to declined. KB Financial, holding company of South Korea's top commercial lender Kookmin Bank, fell 3.31 percent. Hana Financial shed 3.69 percent.

Iriver shares surged 14.92 percent on a local media report that the electronics company was in talks with LG Display to set up an e-book joint venture.

An LG Display spokesman confirmed the report, saying that while nothing had been officially decided, the company was "nearing an agreement" with Iriver.

Australia Trims Gains

Australian stocks rose 1 percent as investors cherry picked battered shares but the market closed well off its intraday high as edgy investors were still watching out for negative leads.

Rio Tinto jumped as much as 4.7 percent and ended 3.7 percent higher after tjhe mining giant predicted strong iron ore demand would continue and gave an upbeat outlook for aluminum, defying sharp slides in commodity prices and fears of a double-dip global recession.

The benchmark S&P/ASX 200 index , which has fallen 11.5 percent so far this year, rose 41.86 points to 4,307.20. The index dropped 3 percent on Tuesday.

New Zealand's benchmark NZX 50 index rose 0.25

Rival miner BHP Billiton climbed 2.7 percent and Fortescue Metals soared 9.88 percent to A$3.78.

Brewer Foster's Group surged 7.3 percent to A$5.53, its highest level in a month, on news it planned to separate its beer and sagging wine business.

Top home lender Commonwealth bank of Australia climbed nearly 1 percent and No.4 Australia and New Zealand Banking Group rose 2.5 percent.

Investors prefer CBA for its steady growth and ANZ for its Asia focus, while top lender National Australia Bank has been dubbed an underperformer and No.3 Westpac Banking Corp has recently fallen out of favour with its high pricing.

Takeover target Sigma Pharmaceuticals rose 2.2 percent taking gains this week to 5.4 percent.

Toll road operator Transurban, which has rejected a takeover approach and is proceeding with a share sale, fell 1.4 percent to A$4.2.

Hang Seng Holds Firm

Hong Kong stocks advanced 0.9 percent as investors seached beaten down stocks for bargains after Tuesday's sharp sell-off took valuations to their lowest since March 2009.

The benchmark Hang Seng index opened 0.9 percent at 19,151.34.

China's key Shanghai Composite wobbled following a higher open. The index finished 0.12 percent higher at 2,625.7 points, after weaving in and out of positive territory much of the day.

Agricultural Bank of China was in focus. Local media reported that the Chinese lender had cleared a preliminary hearing with the Chinese securities regulator in the run-up to its planned $30 billion IPO in China and Hong Kong.

The bank's initial public offering later this year is expected to be the largest of all time.

Taiwan Rebounds

Taiwan stocks rose 1.14 percent in cautious trading, as a late rally on Wall Street offered temporary relief from the euro zone crisis and rising tensions between North and South Korea.

Shares at Hon Hai, a major supplier to Apple and Dell, ended 2.4 percent higher despite a series of apparent suicides at its Foxconn unit.

The gain came even after Apple said it was "saddened and upset" by the deaths and noted that an internal team was independently evaluating steps Foxconn is taking to address working conditions at China plants.

The main TAIEX share index finished up 80.98 points at 7,167.35 with turnover moderate at T$98.9 billion ($3 billion), recovering from a nine-month closing low in the previous session.

TSMC, the world's top contract chip maker, gained 0.9 percent. The company received approval from the Taiwan government to invest $5 million in a Chinese venture capital firm, local media said.

In Southeast Asia, Singapore stocks tracked Wall Street's higher close. The benchmark Straits Times Index chalked up 1.5 percent at 2,691.3 points.

Sembcorp Industries fell 1 percent, after the conglomerate announced a US$227 million acquisition of a 49 percent interest in an Indian power venture.

Malaysia's KLCI gave up early gains to stand flat at 1,249.87 points and Thailand's SETadvanced 0.4 percent.