UPDATE: Asian Shrs End Higher; Financials Solid

(Update with Singapore, India close, latest available prices)

By V. Phani Kumar, Matthew Allen and Wei-Zhe Tan

Asian shares ended mostly higher Tuesday as financials got a lift from the strong finish overnight on Wall Street.

Chinese shares ended higher for an eighth successive session, aided by automobile stocks on data showing that passenger vehicle sales surged nearly 76% in October. In Sydney, AXA Asia Pacific was trading higher a day after the firm rejected a combined multibillion dollar takeover bid from AXA SA and AMP.

Japan's Nikkei 225 Average rose 0.6% to close at 9870.73, South Korea's Kospi added 0.4%, Australia's S&P/ASX 200 rose 1.3%, Taiwan's Taiex advanced 0.8% and New Zealand's NZX 50 inched up 0.1%.

Stock markets were getting a lift as "concerns about an immediate exit from economic stimulus programs seemed to have eased somewhat after the poor U.S. employment data," said Hwang Bin-ah at Kyobo Securities in Seoul.

Hong Kong's Hang Seng Index gained 0.3% and China's Shanghai Composite rose 0.1%, while India's Sensex reversed early advances to fall 0.4% and Singapore's Straits Times Index rose 0.5%.

Dow Jones Industrial Average futures were recently down 25 points in screen trade after the DJIA jumped over 200 points overnight for its best finish in more than a year. Investors in the U.S. were cheered by the absence of signals from the meeting of Group of 20 finance ministers on exiting loose monetary policies. That boosted risk appetite, dented the U.S. dollar and buoyed commodity prices.

"Just when risky assets started to look vulnerable, policymakers have come out to reassure investors that the world is safe for risk," Barclays Capital analysts said in a note to clients.

But some also remained wary and advised caution. "People should be cautious and skeptical. ...We've had the biggest credit and debt bubble the world has ever seen. I don't personally think that we'll get through this with a one-year, or two-year downturn," Albert Edwards, Societe Generale's head of global strategy told reporters in Hong Kong. Mr. Edwards expects global equity markets to fall to new lows next year.

Financials across the region were mostly higher after their U.S. counterparts helped pace the rise on Wall Street Monday.

National Australia Bank rose 1.8%, Shinhan Financial Group added 1.4% in Seoul, Sumitomo Mitsui Financial Group gained 3.6%, Nomura Holdings added 2.9% in Tokyo and DBS Group Holdings climbed 1.6% in Singapore trading while State Bank of India rose 2.1% in Mumbai.

Banks in Seoul were helped by data showing a drop in the industry's nonperforming loans by the end of September from a quarter earlier.

Financials in China and Hong Kong extended gains a day after ratings agency Moody's lifted the outlook on many of them. Industrial & Commercial Bank of China added 1.2% and Bank of China rose 1.1% in Hong Kong, in addition to posting a 1.3% and 0.2% rise, respectively, in Shanghai.

Chinese automobile shares were in the limelight on news passenger vehicle sales in the country surged 75.8% to 946,400 units last month. FAW Car jumped 5.2% in Shenzhen and SAIC Motor rose 1.4% in Shanghai, with Brilliance China Automotive Holdings soaring 15% and Dongfeng Motor Group climbing 5.2% in Hong Kong.

In Sydney, AXA Asia Pacific gained 1.2%, a day after the firm rejected a takeover bid from AXA SA and AMP. Both Citigroup and Merrill Lynch analysts said a revised offer was needed to get shareholder support.

"We would be surprised if this is the end of the matter, rather we expect at some stage to see a revised offer which should find greater favor with the independent AXA APH directors," said an analyst at Citigroup.

Samsung Electronics ended up 0.4% after the company said it expects no impact on its business from a ruling in the U.S. ordering it to stop selling some of its liquid crystal display devices in the U.S. The U.S. International Trade Commission Monday ruled that Samsung infringed four patents of Sharp relating to LCDs and said the Korean company should cease selling devices in the U.S. that infringed the patents.

Resource shares in Sydney advanced on recent gains in commodity prices, with Rio Tinto ending up 2.6% and BHP Billiton gaining 2.3%.

But in Shanghai, Chinese oil firms with refining operations lost ground even after authorities Monday announced an increase in the prices of diesel and gasoline. China Petroleum & Chemical Corp., or Sinopec, lost 0.7% and PetroChina shed 0.2%. In Hong Kong, Sinopec fell 1.5% and PetroChina rose 0.8%.

Light, sweet crude for December delivery was recently down 74 cents at $78.69 on Globex after rising $2.00, or 2.6% overnight.

The U.S. dollar index, which tracks the greenback against a trade-weighted basket of six major currencies, was recently up 0.2% at 75.14, though it fell against the Japanese unit, recently buying 89.76 yen from 89.94 yen late in New York. The euro was fetching $1.4989 compared with $1.4995 and 134.55 yen compared with 134.97 yen. The British pound fell to $1.6652 from $1.6761.

Spot gold, meanwhile, dropped $4.70 from its New York close, to $1,098.20 per troy ounce.

The 10-year Japanese government bond was flat at 1.470% after briefly rising to 1.485%, its highest level since June 16. Lead December Japanese government bond futures were 0.17 point higher at 137.55.

"Even if the U.S. Treasury market shows its solidness, JGBs are expected to remain top-heavy," said Deutsche Securities strategist Makoto Yamashita in Tokyo. "In the long run, uncertainty over JGB issuance plans regarding the supplementary budget and next fiscal year's government spending will likely" remain as the main theme for the bond market.

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November 10, 2009 05:48 ET (10:48 GMT)


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