By Sarah Turner, MarketWatch
HONG KONG (MarketWatch) -- An improved economic outlook boosted
Asian markets Wednesday, lifting stocks in Hong Kong and Australia
to near two-year highs, while Japanese shares ended at their
highest level in 33 months, also fueled by earnings optimism.
Japan's Nikkei Stock Average surged 2.3% to end at its best
level since April 27, 2010.
Hong Kong's Hang Seng Index rose 0.7% and Australia's
S&P/ASX 200 climbed 0.2% to reach their highest closing values
since April 2011. The session marked a tenth day of gains for the
Australian benchmark.
China's Shanghai Composite Index added 1%, while South Korea's
Kospi and Taiwan's Taiex each advanced 0.4%.
"Generally, market sentiment is that the economic backdrop is
better than this time last year," said Andrew Sullivan, director of
sales trading at Kim Eng Securities. Despite a few economic
concerns, trading volumes have been risen in regional stocks
recently, and "it seems like extra money is going to equities"
rather than bonds, he added.
The region-wide advance came ahead of the conclusion of the
Federal Reserve's two-day policy meeting later in the day, with
investors on alert for any signals about the duration of the Fed's
bond-buying program.
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.
Dow Jones Industrial Average (DJI) and S&P 500 (SPX) futures
were mildly positive by late afternoon in Hong Kong.
Stock movers
Earnings optimism gave the Japanese market an additional boost
Wednesday.
Yahoo Japan Corp. (4689.TO) surged 17.1% after the company's
upbeat quarterly results and announcement of a share buy back.
Telecom firms also saw earnings-related buying. Softbank Corp.
(9984.TO) jumped 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.
Shares of rival KDDI Corp. (KDDIF) -- which also sells the
iPhone, and announced a 40% increase in its quarterly operating
profit Monday -- advanced 3.1%, on top of Tuesday's 2.8% rise.
Also among the wireless carriers, NTT DoCoMo Inc. (DCM) climbed
1%, underperforming the broader market after a separate Nikkei
report tipped a 9% decline in the firm's nine-month operating
profit.
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%.
Some retailers also advanced after data showing a
better-than-expected increase in Japanese retail sales for
December. Fast Retailing Co. (FRCOY) rallied 4.3%, while
Takashimaya Co. (TKSHF) gained 2.4%.
In Hong Kong, companies exposed to the global economy pulled
higher, with ports operator China Merchants Holdings International
Co. (0144.HK) gaining 2.2%, while industry peer Cosco Pacific Ltd.
(CSPKY) rose 1.7%.
In Seoul, Samsung Electronics Inc. (SSNLF) climbed 2.2%, while
rival chip maker SK Hynix Inc. (HXSCL) rose 0.6% after swinging to
a quarterly profit, thanks to rising chip demand after the release
of new smartphones and other devices.
Major mineral extractors paced the advance in Sydney, with Rio
Tinto Ltd. (RIO) gaining 1.5%, and BHP Billiton Ltd. (RIO) climbing
1.2%.
Those gains offset losses for consumer-staples firms, including
Coles supermarket owner Wesfarmers Ltd. (WFAFY), which fell 1.8%
after reporting second-quarter sales figures.
Australian Prime Minister Julia Gillard surprised the country
Wednesday 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.
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