UPDATE: Asian Shares Rise On Wall Street Cue; Jobs Data Eyed

(Adds information, quotes, updates/adds market levels)

By Kate O'Keeffe and Kirsty Green

Of DOW JONES NEWSWIRES

SINGAPORE (Dow Jones)--Asian shares were broadly higher Friday, taking their cue from Wall Street's strong performance overnight. Hopes that governments around the world would remain committed to stimulus measures were supporting sentiment, though there was some caution ahead of tonight's U.S. nonfarm payrolls data.

Hong Kong's Hang Seng was 1.9% higher and Japan's Nikkei 225 rose 1.1%. China's Shanghai Composite was up 0.6%, Korea's Kospi Composite advanced 1.4% and Taiwan's main index was 1.0% higher.

Australia's S&P/ASX 200 was 1.7% higher and New Zealand's NZX-50 added 0.5%. The Dow Jones Industrial Average shot up 2.1% Thursday, though futures were down six points in screen trade.

"This week's rash of central bank meetings have concluded. And the take away message is that the major central banks have not begun to remove the extraordinary liquidity provisions," said Brown Brothers Harriman. "The key point is liquidity, which we believe is a critical driver, remains ample," which will encourage risk-seeking behavior.

Government policy on stimulus measures is set to remain in the headlines in the near-term with the G20 and APEC meetings coming up. "The timing and methods of reversing such stimulus are likely to be a focal point," said Standard Chartered analysts.

In the nearer term, some traders were cautious ahead of the U.S. October nonfarm payrolls report later as recent U.S. jobs-related data have shown mixed results.

"My suggestion to clients is that, unless U.S. stocks are on a more stable path, they should sell on rallies," said David Li, trader at Daiwa Securities SMBC-Cathay in Taiwan.

Financials were strong in Asia, tracking their U.S. peers, with CBA 1.7% higher, Westpac up 2.5% and Axa up 5.9% in Australia. In Korea, KB Financial rose 2.2% and Samsung Securities gained 1.6%.

Chinese financial stocks were tracking well in Hong Kong with China Life up 2.2%, ICBC up 2.0% and China Overseas 1.8% higher.

In Japan, however, financial stocks were lagging after a Nikkei report on tighter global banking regulations sparked worries of capital raising. Mizuho FG was down 1.7% and Sumitomo Mitsui FG lost 1.3%.

Still, Tokyo's exporters were helping to keep the market in positive territory. Electronics maker NEC was a bright spot, up 8.9% on bargain hunting following news of capital raising. Toyota Motor rose 0.8% after announcing better-than-expected earnings and Elpida jumped 4.8% after news it had signed a pact with Taiwan's ProMOS Technologies to outsource production of DRAM chips. ProMOS was trading 6.3% higher in Taiwan.

Ssangyong Motor was another standout, jumping 9.9% in Korea before the court's final ruling on the company's proposed self-rescue plan later.

Resources were firmer in Australia, with BHP Billiton rising 1.7% and Rio Tinto up 2.3%. While in New Zealand, Telecom rose 2.4% after posting first-quarter results, and Nuplex gained 4.6% after upgrading its guidance.

Among other regional markets, Singapore's Straits Times Index was 1.4% higher while Malaysia's main index was up 0.7%. Indonesian shares were up 1.1%, though Philippine shares were bucking the bullish regional trend and trading down 0.5%.

Shares of Manila Electric Co. slumped 11% after First Philippine Holdings Corp. on Thursday decided to sell just half of its remaining 13.4% stake in Meralco to Metro Pacific Investments Corp., forsaking an offer from Triratna Holdings Corp. to buy the entire stake. "Obviously, a sell-on-news phenomenon after the winner of the bidding war is known," said Erwin Balita, research head of SB Equities in Manila.

Foreign exchange markets were trading in a fairly tight rage ahead of the U.S. payrolls data, with the euro at $1.4874 from $1.4875 late in New York and at Y134.90 versus Y135.00. The U.S. dollar was at Y90.69, from Y90.75.

Barclays Capital chief currency strategist Masafumi Yamamoto said the U.S. payrolls could show a 150,000 decline in jobs, less than the 175,000 drop tipped in a Dow Jones poll of economists, which could push the U.S. dollar up against the Japanese yen and boost U.S. long-term interest rates and stocks.

The Australian dollar rose 20 points to US$0.9122 after the Reserve Bank of Australia revised higher its medium-term forecasts for inflation and economic growth and said a further gradual withdrawal of monetary stimulus would likely be needed.

Coming on top of a speech Thursday where RBA Governor Glenn Stevens said the economy had experienced only a mild downturn and spare capacity would be used up quickly, the central bank's quarterly statement will likely increase expectations of further interest rate hikes.

Nymex December crude oil was recently up 51 cents at $80.13 per barrel on Globex. But Morgan Stanley said that upside for crude was limited as supportive macroeconomic factors are beginning to fade. "The deluge of global liquidity has contributed to lifting oil prices since February...with the end of easing approaching, we envision a harder grind ahead - one where fundamentals will matter more."

Spot gold was at $1,090.80 per troy ounce, up 80 cents versus the New York close.

Lead December Japanese government bond futures were slightly lower as the Nikkei rose, with the contract down 0.03 point at 137.57.

-Kate O'Keeffe, Dow Jones Newswires; +65-6415-4140; kathryn.okeeffe@dowjones.com

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November 05, 2009 23:18 ET (04:18 GMT)


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