Asian Shares End Higher; Gold, Commodity Plays Shine

SINGAPORE (Dow Jones)--Asian stock markets advanced Wednesday, with many of them rebounding on the back of commodity shares amid soaring gold prices.

Trading volumes were thin in some markets as many investors stayed on the sidelines ahead of the results of the U.S. Federal Reserve's policy meeting.

The Fed was widely expected to stand pat on rates, but investors were focused on its commentary on the U.S. economic outlook and any hints about when it could tighten policy.

Japan's Nikkei 225 Average rose 0.4% to 9,844.31 and Hong Kong's Hang Seng Index added 1.8% to 21,614.77, while China's Shanghai Composite stretched its winning streak to a fourth straight session, ending 0.5% higher at 3,128.54.

India's Sensex jumped 3.3% in afternoon trading, well on its way to snap out of a six-session losing streak, including a 3.1% tumble Tuesday. Taiwan's Taiex finished 2.0% up and South Korea's Kospi gained 1.9%, ending higher for the first time in seven sessions.

Elsewhere, New Zealand's NZX 50 gained 0.2% and Philippines' main index ended flat, with Singapore's Straits Times Index up 1.0%, Thailand's SET Index rising 2.2% and Indonesia's JSX gaining 1.6%.

The Dow Jones Industrial Average futures contract was 31 points higher in screen trade, after the DJIA ended off 0.2% Tuesday.

Gold miners were again in the limelight, after spot gold rallied to a record high of $1,089.10 per troy ounce in late New York trade Tuesday, helped by news of the Indian central bank's purchase of 200 metric tons of gold from the International Monetary Fund. Spot gold was at $1,085.80 per troy ounce, up $1.50 from the New York close.

Sumitomo Metal Mining Co. shares rose 2.6%, outperforming the broad market in Tokyo, as did Newcrest Mining and Lihir Gold in Sydney, finishing up 3.2% and 4.4%, respectively.

Shandong Gold-Mining rose 2.1% in Shanghai and Zhaojin Mining Industry Co. added 4.2% in Hong Kong, with Zijin Mining Group Co. rising 1.5% in Shanghai and 5.7% in Hong Kong.

Barclays Capital said gold had broken out of its recent consolidation and was now heading for the $1,100 target.

The Australian market was unable to sustain all of its early gains, after September retail sales came in lower than expected, dropping 0.2% from August, with ANZ Bank economist Alex Joiner saying retail sales will be soft for the rest of the year as the effect of government stimulus efforts fade.

With no sign of a massive recovery in the labor market and wage growth muted, "households are going to be very cautious going into Christmas, with spending levels pared back from the artificially-boosted levels we got from the cash hand outs earlier this year," he said.

Woolworths dropped 0.8% and Wesfarmers gave up 0.6%, though Westpac Banking Corp. gained 1.4% as its full-year results were marginally ahead of expectations.

Tokyo's chip-related shares fell after Morgan Stanley's rating cut on the semiconductor industry, with Tokyo Electron slumping 5.1%.

In Hong Kong, oil producers were being supported by gains in crude-oil futures. Cnooc rose 3.0% and PetroChina advanced 3.6%, also helped by Credit Suisse's rating upgrade to neutral from underperform.

In Mumbai, stocks that lost heavily in the past few days led the gains on bargain buying, with market heavyweight Reliance Industries up 4.1%, real estate major DLF rising 4.2% and metals producer Hindalco Industries climbing 4.4%.

The South Korean market, meanwhile, was helped by a rise in financial stocks, which also recently lagged the market. Eugene Investment & Securities analyst Kwak Byong-ryel called the market's rise a technical rebound, after a six-session drop.

"It's hard to find a cue now...amid uncertainties over global financial firms and before the FOMC policy meeting," he said.

Samsung Securities soared 6.3%, KB Financial Group gained 1.8% and Shinhan Financial Group added 2.8% after reporting strong third-quarter results.

Seoul Semiconductor gained 4.7%. Singapore state investment company Temasek Holdings will invest 284.7 billion Korean won ($241 million) in the company and an affiliate through a rights offering, said Daishin Securities, which advised on the deal.

Chinese property developers were mostly lower on speculation that the Chinese government will end property-boosting measures by year-end and some banks may soon tighten lending. China Vanke dropped 1.6% in Shenzhen, while Gemdale Corp. lost 1% in Shanghai.

The U.S. dollar was buying Y90.68 from Y90.37 in late New York trade Tuesday ahead of the FOMC meeting outcome. The euro was stronger at $1.4772 from $1.4721, and at Y133.95 from Y133.00.

The lead Japanese government bond futures contract was down 0.31 at 137.96 points, weighed by Tuesday's weakness in long-dated U.S. Treasurys. The 10-year cash yield gained two basis points at 1.395%.

The December Nymex crude oil futures contract was down one cent at $79.59 per barrel after settling $1.47 higher Tuesday.

-Dow Jones Newswires; +65-6415-4140; markettalk@dowjones.com

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November 04, 2009 04:48 ET (09:48 GMT)


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