By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) -- Asia stocks gained Wednesday, with Hong
Kong and Australian markets hovering around multi-year highs, while
Japanese shares surged as earnings results and helped fuel
gains.
The region's second-largest equity market, Japan's Nikkei Stock
Average , surged 2.3%, while regional leader, Hong Kong's Hang Seng
Index , climbed 0.7% after hitting an intraday level not seen since
May 2011 early in the session.
The Shanghai Composite Index inched up 0.1%, South Korea's Kospi
rose 0.4%, and Australia's S&P/ASX 200 index closed 0.2% up to
extend a 21-month high and seal its 10th straight gain.
"Markets are testing higher," said Andrew Sullivan, director of
sales trading at Kim Eng Securities.
"Generally, market sentiment is that the economic backdrop is
better than this time last year," he said, though adding that some
economic overhangs remain.
Sullivan also said there has been more volume in stock markets
lately, and "it seems like extra money is going to equities" rather
than bonds.
In Hong Kong, companies exposed to the global economy were
pulling higher, as ports operator China Merchants Holdings
International Co. (0144.HK) gained 2.1%, and Cosco Pacific Ltd.
(CSPKY) rose 1.7%, while footwear major Belle International
Holdings Ltd. (BELLY) advanced 2.2%.
Some major Japanese retailers jumped after retail-sales data for
December rose 0.4% from a year earlier, just ahead of analyst
expectations for a 0.3% increase.
Among them, Fast Retailing Co. (FRCOY) surged 3.9%, while
Takashimaya Co. (TKSHF) gained 2.4%.
Meanwhile, earnings optimism gave the Japanese market an extra
boost on Wednesday, as Yahoo Japan Corp. (4689.TO) surged 17.1%
after updating its fiscal-year earnings forecast to a 10%-11% gain
year-on-year amid growing online-advertising revenue, and
announcing that it would buy back shares.
Telecoms also saw earnings-related buying in Tokyo, with
Softbank Corp. (9984.TO) improving by 3.6% after the Nikkei
reported that the wireless carrier is expected to post a 10% gain
for its April-December operating profit, helped by sales of Apple
Inc.'s (AAPL) iPhone.
Rival KDDI Corp. (KDDIF) -- which also sells the iPhone, and
which already posted a 40% rise in its October-December operating
profit late Monday -- saw its shares advance another 3.1% on
Wednesday.
Also among the wireless carriers, NTT DoCoMo Inc. (DCM) traded
up 1%, even as a separate Nikkei report tipped a 9% lower
nine-month operating profit for the firm.
Central Japan Railway Co. jumped 6.6% after reporting a 49% rise
in nine-month net profit, while fellow rail operator Keisei
Electric Railway Co. rose 1.9%.
In South Korean trading, Samsung Electronics Inc. (SSNLF)
climbed 2.1%, while rival chip maker SK Hynix Inc. (HXSCL) rose 1%
after reporting a swing to quarterly profit, thanks to rising chip
demand after the release of new smartphones and other devices.
Australia saw major mineral extractors advance, with Rio Tinto
Ltd. (RIO) up 1.5%, and BHP Billiton Ltd. (RIO) higher by 1.2%.
The move in the mining sector offset losses for consumer-staples
firms, including Coles supermarket owner Wesfarmers Ltd. [(WFAFY),
which traded down 1.8% after reporting second-quarter sales
figures.
Australia's Prime Minister Julia Gillard on Wednesday surprised
the country by announcing that the next general election will be
held on Sept. 14.
"This is a very early announcement for an election date. At face
value, this might inject some uncertainty into the economy, yet it
should be remembered that Parliament has been hung for over two
years now, and political uncertainty has been high for the
duration," said Michael Turner, strategist at RBC Capital
Markets.
U.S. monetary policy will be front and center for investors
later Wednesday, with the Federal Reserve due to wrap up a two-day
policy meeting. Investors will be alert for any signals as to the
duration of the Fed's bond-buying program.
With Spanish and U.S. gross domestic product figures also due
out, "data releases ahead of the Fed [Federal Open Market
Committee] rate decision today will keep markets busy," Crédit
Agricole strategist Mitul Kotecha said.
U.S. stock gains Tuesday had set up a mostly positive lead for
Asia, with pharmaceutical giant Pfizer Inc. (PFE) leading blue-chip
gains after reporting fourth-quarter earnings that beat
estimates.
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