Asia Turns Mixed Despite Wall Street’s Strong Lead

Asian stock markets turned mixed on Tuesday afternoon, with Japan and Australia holding on to their earlier gains after better-than-expected U.S. manufacturing data sparked a rally on Wall Street, but South Korea lost its momentum to fall into negative territory.

Japan’s Nikkei Average [JP;N225  10354.26  149.2402  (+1.46%) ] rose 1.6 percent with Toyota Motor jumping after detailing plans of its fix for recalled vehicles, while exporters climbed on a weaker yen and stronger-than-expected economic data.

But analysts said any overall Nikkei rise would be limited ahead of a U.S. Senate hearing on the Obama administration’s proposed new limits on big banks later on Tuesday and U.S. jobs data later this week.

The Nikkei gained 150.06 to 10,363.64 after briefly falling as far as 10,129.91 on Monday to around the level of the Nikkei’s 75-day average, which market players said should serve as support for now.

The broader Topix rose 1.4 percent to 911.22.

Toyota rose 5.5 percent to 3,640 yen after it detailed plans on Monday to fix nearly 4.5 million vehicles equipped with faulty accelerators in North America and Europe. Toyota also said it would resume production of eight models on Feb. 8 after a planned one-week shutdown at six plants in the United States and Canada. But shares in the automaker are still 13 percent below their price the recall woes began, with investors concerned about the long-term impact on earnings.

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Canon rose 2.5 percent to 3,605 yen, Sony Corp climbed 3.3 percent to 3,160 yen and Kyocera gained 1.4 percent to 8,260 yen.

Resource-linked shares climbed after metals surged on the ISM data, with oil extending gains as well.

Trading house Mitsubishi Corp gained 4.6 percent to 2,239 yen, while fellow trader Mitsui & Co rose 3.7 percent to 1,341 yen. Nippon Oil gained 4.5 percent to 438 yen.

Seoul shares gave up their early gains to trade lower by 0.4 percent. Better-than-expected U.S. manufacturing data cushioned losses with key large cap issues including POSCO, and tour issues rallying on hopes for an industry recovery.

The Korea Composite Stock Price Index (KOSPI) lost 7.5 points to 1,598.61 points.

Key large cap issues rebounded after their recent losing streak, with POSCO, the world’s No.4 steelmaker rising 3.2 percent after four sessions of declines.

Shares in Samsung Electronics, the world’s No.1 maker of memory chips, and Hynix Semiconductor both lost ground after racking up gains early in the session.

The key shareholders of Hynix, the world’s No.2 maker of memory chips, extended a deadline on Monday for preliminary bids for the firm to February 12. Its shares were higher initially on speculation shareholders may have found an interested bidder.

Auto issues declined following their rallies in the previous session on news of Toyota’s recall struggles. Hyundai Motor, South Korea’s top automaker, was down 3.5 percent and Kia Motors fell 2.2 percent.

Tour issues advanced for a second session, helped by a jump in January earnings at Hana Tour that added to hopes the sector would pick up this year after a prolonged downturn. Shares in Hana Tour rose 3.62 percent and Modetour advanced over 2 percent.

Australian stocks rose 1.5 percent on Tuesday, with mining stocks leading the charge after strong U.S. manufacturing data revived hopes of the global economic recovery and buoyed the outlook for oil and metals demand.

The Reserve Bank of Australia held its key cash rate steady at 3.75 percent on Tuesday, stunning investors who had confidently expected a rise to 4.0 percent and sending the local dollar tumbling. However, the central bank said further rate rises were likely to be needed over time if the economy improved as it expected.

The benchmark S&P/ASX 200 index [AU;XJO  4605.4  81.259  (+1.8%) ] recovered from a near three-month closing low on Monday.

BHP Billiton [BHP  72.10  2.73  (+3.94%) ], the world’s top miner, jumped 3.4 percent to A$40.55, while smaller miner Rio Tinto [RIO  71.9   UNCH  (0) ] rallied 4.7 percent to A$70.60. Miners were the hardest hit in the recent sell-down on concerns about slowing demand for metals.

Arrow Energy gained 3.4 percent after saying its share of cost for a gas export project in the eastern coast will exceed $1 billion and that funding options may include an equity raising and a project stake sale.

Westfield Group, the world’s biggest shopping mall owner by market value, added 4.1 percent to A$12.88 after declaring a second-half distribution of A$0.47 per security.

Hong Kong shares traded higher with Chinese lenders such as Industrial and Commercial Bank of China (ICBC) rising on easing concerns that Beijing would take more steps to slow lending.

ICBC was up 1.21 percent. China’s top lender said its new loans in January were about 110 billion yuan ($16 billion), less than in the same month last year.

China Merchants Bank rose 2.4 percent in the afternoon session. The lender has won approval from the country’s stock regulator  for a rights issue to raise up to 22 billion yuan ($3.22 billion) to replenish capital.

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Gold counters Real Gold rose 9.02 percent and Zijin Mining advanced 4.66 percent, after gold prices posted their biggest daily gain in three months on Monday.

CVM Minerals dropped 12.79 percent when it resumed trading on Tuesday. The company said it was selling shares at HK$0.36 apiece, a 16.3 percent discount to its closing price before it was suspended on Monday.

The benchmark Hang Seng Index gained 0.1 percent to 20,268.09 points while the Shanghai Composite jumped over 1 percent.

In Southeast Asia, the Straits Times Index lost its early gains to trade lower by 0.08 percent while the KL Composite remained 0.4 percent higher.

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