Asia Advances, Toyota Down 3.7%

Asian shares advanced on Wednesday, led by resources stocks, as demand for riskier assets increased after Wall Street rallied on upbeat U.S. earnings and economic data.

Japan’s Nikkei average edged up 0.4 percent, with rises by exporters on strong U.S. data offsetting declines for Toyota Motor and Fast Retailing.

The benchmark Nikkei climbed 49 points to 10,419.8, while the broader Topix gained 0.6 percent to 918.65.

Fast Retailing lost 4.3 percent to 14,380 yen to become the biggest drag on the index after same-store sales at its Uniqlo casual-clothing chain fell for the first time in six months in January.

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Toyota shares fell 3.7 percent after its recall woes sent U.S. sales tumbling 16 percent in January and after a U.S. official said the government could take the unusual step of announcing a civil penalty against Toyota.

In addition, Toyota is facing a growing number of lawsuits from consumers who complain their vehicles suddenly accelerate or may do so, and want the world’s largest automaker to pay for it.

Rising sales of previously owned U.S. homes and robust earnings from U.S. bellwethers in the consumer and industrial sectors pointed to a steady rebound in demand, helping lift blue-chip exporters.

The dollar was up 0.1 percent against the yen at 90.43 yen. Investors fret about a stronger yen since it eats into exporter profits when repatriated.

Among exporters, Canon rose 2 percent to 3,685 yen and Honda Motor gained 1.6 percent to 3,120 yen.

Investors will be watching Japanese earnings. Companies announcing results after the close include Honda Motor, Sharp and Mitsubishi UFJ Financial Group.

Pioneer shot up 7.4 percent to 376 yen. The Nikkei business daily said Mitsubishi Chemical will likely invest  1-1.5 billion yen ($11.1 million-$16.6 million) to take a small stake in the electronics maker and the two firms will jointly develop organic electroluminescent lighting equipment. The investment by the unit of Mitsubishi Chemical will be a key pillar of Pioneer’s restructuring efforts, the Nikkei said.

Brokerages also rose across the board amid a stock market pickup. Shares in Samsung Securities, South Korea’s top brokerage by market value, climbed 1.1 percent, and Woori Investment & Securities advanced 2.3 percent.

Australian stocks gained 0.7 percent as miners rose for a second day, buoyed by results from key U.S. industrial and consumer companies, and Insurance Australia Group jumped after a profit upgrade.

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The top miners had been sold down over the past few weeks on  worries about the move by China, their biggest customer, to rein in bank lending. But signs of a sustainable global recovery have lured investors back into the resources stocks.

Australian building materials firms which have big businesses in the United States got a lift after U.S. data showed sales of previously owned homes had risen and a top five U.S. home builder reported its first quarterly profit in nearly three years.

James Hardie Industries, which in good years has made as much of 80 percent of its earnings in the United States, rose 4.3 percent to A$8.00. Boral rose 5.4 percent to A$5.65.

The S&P/ASX 200  picked up 33 points to 4,638.4, adding to Tuesday’s 1.8 percent gain.

 

Insurance Australia Group, the country’s top car and home insurer, was one of the top five gainers, surging 5 percent to A$3.98 after raising its insurance margin forecast for this year.

Rupert Murdoch’s News Corp jumped 4.7 percent to A$17.66 after its second quarter profit came in stronger than expected.

Hong Kong’s Hang Seng Index climbed 1.3 percent to 20,536.3 points, following gains on Wall Street.

CNOOC shares surged 7.9 percent after it raised its output forecast for this year. The Chinese offshore oil and gas producer also said it plans to increase capital spending for oil exploration in 2010 amid rising crude oil prices. Its sister company, China Oilfield, jumped 7 percent.

China Merchants Bank rose 2.14 percent, extending Tuesday’s gain after it won approval to raise capital through a rights issue.

A strong computer sales outlook boosted shares of Lenovo. The computer maker rose 5.56 percent, spurred by optimism over sales of its products in China, its main market.

Imagi International saw its shares sky-rocketing 21 percent. The company, engaged in the production of computer graphic imaging (CGI) for animated films, said it is in talks with a potential investor for a controlling stake in the company.

Resource issues extended gains after prices of gold, copper and oil rose on Tuesday, aided by economic recovery hopes and a weak U.S. dollar. Crude oil was up almost 4 percent, its biggest one-day gain in four months, to top $77 per barrel.

Aluminum maker Chalco rose 1.76 percent, Jiangxi Copper gained 1.52 percent, while gold miner Zijin Mining advanced 1.21 percent. Oil company PetroChina added 1.7 percent.

China’s key Shanghai Composite was up 0.7 percent while Taiwan stocks rose 0.9 percent.

Shares of UMC, the world’s No. 2 contract chip maker, soared 4 percent after the firm said it will buy back 200 million of its shares from Wednesday to distribute to employees.

In Southeast Asia, Singapore’s benchmark Straits Times Index advanced over 1 percent, recovering from yesterday’s 0.5 percent loss.

Shares of Singapore Airlines jumped 3.8 percent to S$14.18 score their biggest single-day percentage gain in seven months. Investors cheered news that the world’s No. 2 airline by market value posted a 19.7 percent rise in quarterly profit, rebounding from two straight quarters of losses.

One stock on the move in Malaysia was EON Capital. The country’s seventh-largest bank fell 3 percent to 6.85 ringgit after it rejected bigger rival Hong Leong Bank‘s $1.45 billion offer for its banking assets.

Hong Leong Bank, Malaysia’s sixth-largest lender, lost 0.6 percent to 8.15 ringgit, underperforming the KLCI, which traded flat at 1,264.3 points.


Shares of Mitsubishi Chemical Holdings climbed 1.9 percent to 383 yen.

Seoul shares rebounded, led by gains in brokerages and shipbuilders on the back of better than expected U.S. earnings and economic data.

Analysts said upbeat U.S. economic data, including pending homes sales data, boosted sentiment.

The Korea Composite Stock Price Index (KOSPI) was up 0.9 percent to 1,611 points at mid-day.

Shipbuilders advanced across the board after recent losses and amid growing hopes that the industry will fare better this year after a severe downturn in 2009.

Hyundai Heavy Industries, which had fallen nearly 11 percent since late January as of Tuesday’s close, rose 3.55 percent.

Daewoo Shipbuilding & Marine Engineering gained 4.05 percent.


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