Asian stocks rose broadly on Friday, as encouraging signs about the U.S. housing market as well as German Chancellor Angela Merkel's voice of support for the ECB action to resolve the debt crisis helped improve investor risk appetite.
Speculation concerning Spain receiving its first, 30 billion euro tranche of the EU banking bailout also boosted sentiment. Spanish stocks rallied and bond yields dropped on Thursday amid speculation the European Central Bank will soon buy the sovereign debt of Spain, Italy and other troubled euro zone countries to reduce their borrowing costs.
Tokyo shares gained ground for a second straight session, with a softer yen and easing fears about the European debt crisis underpinning sentiment. The Nikkei average rose 0.8 percent to a fresh three-month high, while the broader Topix index ended 0.9 percent higher. Sharp reversed early losses to end up over 5 percent after the Nikkei said Taiwanese electronics maker Hon Hai Precision Industry Co. is looking to double its stake in the company.
Honda Motor advanced 2.4 percent in the wake of reports that it will increase production of scooters in Indonesia. Fanuc, Kyocera and Toshibha gained 2-4 percent, benefiting from a weaker yen. Steelmakers JFE Holdings and Nippon Steel both closed up over 4 percent each after increasing steel scrap prices.
China's Shanghai Composite index edged up 0.1 percent as gold miners gained ground on the back of higher gold prices. Hong Kong's Hang Seng index rose 0.8 percent, rebounding from a two-week low on improved risk appetite after Merkel voiced her support for the European Central Bank's efforts to contain the region's debt crisis.
Australian shares hit a fresh three-month high, taking cues from the U.S. and European markets overnight after reports said Spain is about to receive its first tranche of the EU banking bailout. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index rose about 0.9 percent each.
Australia & New Zealand Banking Group climbed 3 percent after the lender beat forecast with a 10 percent rise in profit for the nine months to June. Commonwealth and NAB rose about half a percent each, while Westpac gained 1.6 percent.
QBE Insurance tumbled 4.5 percent after reporting a lower-than-expected rise in first-half profit. APA Group slid 1.1 percent after lifting its takeover bid for Hastings Diversified Utilities Fund. Resources stocks turned in a mixed performance, with BHP Billiton gaining 0.4 percent, while Rio Tinto lost 1.1 percent after pricing a $3 billion bond issue.
Fortescue Metals advanced 1.9 percent after it awarded Norfolk Group a $56 million contract to work on an Western Australian rail project. Oil & gas producer Santos rallied 3.2 percent after it announced a better-than-expected underlying profit for the first-half and maintained full-year production guidance.
Seoul shares fell modestly, dragged down by tech shares as investors took some profits off the table following recent steep gains. The benchmark Kospi average retreated 0.6 percent. Heavyweight Samsung Electronics tumbled 3.7 percent to its lowest level since August 7, while shipbuilders gained ground, boosted by Merkel's supportive comments on the issue of euro zone bailout plan.
New Zealand shares rose, buoyed by strong global cues on hopes of ECB action. The benchmark NZX-50 index gained 0.7 percent, with Nuplex shares rising 2.3 percent after the specialty chemical maker reported a flat profit for the year to June, meeting its guidance. Chorus climbed 3.9 percent after the Commerce Commission decided not to launch a Schedule 3 investigation into the company's regulated copper services and associated pricing principles for the ageing lines.
Fletcher Building, the nation's largest construction company, rose 1.2 percent, carpet maker Cavalier rallied 3 percent and rural services firm PGG Wrightson soared 6.7 percent. Children's clothing chain Pumpkin Patch fell 1.9 percent on profit taking after yesterday's 13 percent rally, jeweler Michael Hill International dropped 0.9 percent and heavyweight Telecom retreated 2.5 percent from its highest level since August 2008.
Elsewhere, India's benchmark Sensex was last trading up 0.3 percent and Singapore's Straits Times index edged up marginally, while Malaysia's KLSE Composite slipped marginally and the Taiwan Weighted average fell 0.3 percent.
U.S. stocks broke sideways movement to end mostly higher overnight, as investors cheered Cisco's better than expected quarterly results and remarks by German Chancellor Angela Merkel that Germany was committed to do what it could do to maintain the euro.
Traders also digested another mixed batch of U.S. economic data, including a report from the Commerce Department showing a drop in housing starts but a substantial increase in building permits. The Dow and the S&P 500 rose about 0.7 percent each, while the tech-heavy Nasdaq gained a percent.
by RTT Staff Writer
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