Asia Gains, Economic Fears Drag on China

North Asian markets edged higher on Monday as investors picked up beaten-down stocks, shrugging off the weaker-than-expected U.S. jobs report which rattled Wall Streeton Friday. But shares in China fell, hurt by lingering fears of a slowdown in the Chinese economy.

Japan's Nikkei Average edged up as beaten-down exporters gained some ground after the Nikkei last week marked its worst week in over a month, and as a key retracement level continued to offer support.

Consumer lenders such as Acom sky-rocketed, with many jumping by nearly a fifth in value after the Mainichi newspaper said Osaka prefecture may set up a special financial zone where tough new lending rules would be eased.

The benchmark Nikkei rose 0.7 percent or 63.07 points to 9,266.78, ending the day above support at 9,200, which is roughly a 50 percent retracement of the move up from its March 2009 low to its high in April.

The broader Topix gained 0.7 percent to 836.89.

Shares of exporters gained broadly after many fell to multi-month lows last week, with the dollar climbing further above a seven-month trough against the yen, on demand from Japanese importers. Hitachi climbed 1.8 percent while Canon added 0.7 percent.

Sanyo Electric jumped 3.5 percent to 118 yen after three sources said the company is close to finalizing the sale of its chip unit to ON Semiconductor, its latest move to shed non-core businesses to focus on more promising areas.

U.S.-based ON Semiconductor is expected to pay 20-30 billion yen ($228-342 million) for the loss-making unit, Sanyo Semiconductor Co, Kyodo news agency said.

But Fast Retailing underperformed, dropping 1.7 percent after the company said on Friday that same-store sales at its Uniqlo casual-clothing chain fell 5.8 percent in June from a year earlier, the first year-on-year decline in two months.

Seoul shares finished slightly higher, snapping a four-session losing streak with gains led by shipyards and steelmakers.

The Korea Composite Stock Price Index (KOSPI) ended up 0.21 percent at 1,675.37 points.

Strong gains in shipyards lifted the market, with shares in STX Offshore & Shipbuilding, a unit of STX Group, surging 9.13 percent after a local media report STX Group planned to list its European unit in Singapore in October to raise as much as $570 million.

The sector was also encouraged by news Daewoo Shipbuilding and Marine Engineering secured orders worth $300 million to build two oil carrier and two chemical product carriers. Daewoo Shipbuilding ended up 1.61 percent.

Samsung Heavy Industries advanced 2.55 percent after Taiwan's Evergreen Group said late on Friday it had ordered 10 new ships from the shipbuilder.

Steelmakers outperformed, buoyed by hopes new ship orders may increase demand for steel. POSCO, the world's No.4 steelmaker, advanced 3.64 percent and Hyundai Steel climbed 2.52 percent.

Hyundai Department Store jumped 3.98 percent amid strengthening earnings hopes.

But losses in banks dented the market's upward momentum. Shares in KB Financial fell 0.53 percent and Woori Finance shed 1.04 percent.

Australian stocks reversed earlier gains to end the session 0.4 percent weaker, after a burst in takeover activity was offset by negative sentiment from Asia.

Centennial Coal, Australia's biggest independent coal producer, soared 32 percent after it agreed to a $2 billion takeover offer from Thailand's Banpu Public.

Conglomerate CSR ended up 3.5 percent after agreeing to sell its sugar business to Singapore-listed Wilmar International for A$1.75 billion ($1.47 billion), trumping China's Bright Food Group.

However, sentiment was weak with big miners and some banks closing weaker.

The benchmark S&P/ASX 200was down 16.6 points at 4,222.1.

New Zealand's NZX 50 index inched up 9.235 points at 2,947.34.

The Centennial bid lifted shares in other coal miners, with Macarthur Coal up 5.2 percent and Whitehaven Coal advancing 5.0 percent. Both are seen as potential takeover targets after uncertainty over a new mining tax was resolved last week with a watered down proposal.

Taiwan climbed 1.4 percent, led by banking stocks on hopes of long-term potential gains in China, while technology shares lagged before they announce June sales figures later this week.

Chinatrust Financial advanced 2.4 percent and Taishin Financial rose 4.3 percent, as investors focused on possible gains from closer links to China following last month's signing of a key trade deal.

Their gains helped push the TAIEX index up 109.22 points to 7,439.96, extending Friday's 1.06 percent rebound from a three-week closing low.

Top contract chipmaker Taiwan Semiconductor Manufacturing Co rose 1.8 percent on hopes its June sales figures, due out this week, will show fresh demand for chips thanks to new PCs and high-tech devices.

Smartphone maker HTC jumped 6.9 percent, pushing the broader electronics sub-index 1.6 percent higher.

Shares in China lost ground broadly, due to lingering concerns over a slowdown in the domestic economy and worries that Agricultural Bank of China's mid-July IPO could lead to a liquidity crunch.

The key Shanghai Composite Index fell as much as 1.7 percent to 2341.28 in early morning trade.

Hong Kong traded to the downside, slipping 0.3 percent, weighed down by weakness in mainland markets and bank shares.

The benchmark Hang Seng Index fell 64 points to 19,840.8, after declining 4 percent over the past three sessions.

Bank of China retreated after China's No. 4 lender said it would raise up to 60 billion yuan ($8.8 billion) in a rights offering. Its shares were last quoted down 1.2 percent in Hong Kong and 0.8 percent in Shanghai.

The issue would come on top of the $5.9 billion it raised in convertible bonds in Shanghai last month, joining domestic rivals in a rush to replenish its capital after last year's lending spree and to meet tighter capital adequacy ratios demanded by regulators.

Singapore's Straits Times Indexand Malaysia's KLCI slipped as concerns over global growth kept investors at bay.

Singapore-listed China Animal Healthcare fell 1.6 percent to S$0.32, as profit-taking emerged after shares in the maker of drugs for livestock rose as much as 4.7 percent in early trade. The sharp gains were in response to the company's announcement that Blackstone will invest about $45 million in it.