By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — Asian shares rallied into the end of the week as airlines, Chinese banks and Japanese exporters helped lead the broad advance Friday.
Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.17% jumped 1.9% to close at 22,171.95, the Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 +2.30% climbed 2.2%, and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.67% rose 1.7%.
“Comments from China’s Premier Wen [Jiabao] that Chinese inflation pressures are now under control have seen investors in an optimistic frame of mind heading into the weekend,” said IG Markets strategist Ben Potter.
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The Chinese premier wrote in a Financial Times editorial published Friday that Beijing’s efforts to curb inflation have worked, with price gains now back within a controllable range.
Chinese banks — which have been expecting more monetary- policy tightening to control prices — traded notably higher in Hong Kong, with Bank of China Ltd. /zigman2/quotes/204682472/delayed HK:3988 0.00% /zigman2/quotes/201568493/delayed BACHY +0.79% up 2.9%, Agricultural Bank of China Ltd. /zigman2/quotes/200705246/delayed HK:1288 -0.31% /zigman2/quotes/204629388/delayed CN:601288 +0.86% leaping 6.1%, China Citic Bank Corp. /zigman2/quotes/205809997/delayed HK:998 +0.24% /zigman2/quotes/204346887/delayed CHBJF -18.18% adding 3.9%, and China Construction Bank Corp. /zigman2/quotes/208974133/delayed HK:939 0.00% /zigman2/quotes/207732534/delayed CICHY +1.33% up 3.5%.
However, Bank of America Merrill Lynch economist Ting Lu cautioned against reading too much into Wen’s statement, citing remarks the premier made to domestic officials earlier this month which “emphasized more difficulties than achievements.”
“Despite these positive messages from Wen [in the editorial], it could be wrong to expect the Chinese government to change its policy stance soon,” Lu said. Read more on China premier comments,
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Airlines advanced after the oil sell-off, with Cathay Pacific Airlines Ltd, /zigman2/quotes/208114856/delayed CPCAY +2.14% /zigman2/quotes/208114856/delayed CPCAY +2.14% up 5.3%, and Air China Ltd. /zigman2/quotes/203408003/delayed HK:753 +0.58% /zigman2/quotes/207207351/delayed AIRYY +1.37% soaring 7.8% in Hong Kong. In Sydney, Qantas Airways Ltd. /zigman2/quotes/205534063/delayed AU:QAN +5.87% /zigman2/quotes/200387630/delayed QUBSF -1.74% advanced 1.9%.
However, energy firms were consequently weaker, with Cnooc Ltd. /zigman2/quotes/203421416/delayed HK:883 +1.16% /zigman2/quotes/204964401/composite CEO +1.53% losing 1% in Hong Kong, and Japan Petroleum Exploration Co. /zigman2/quotes/201212147/delayed JP:1662 +2.42% /zigman2/quotes/202925532/delayed JPTXF -1.12% dropping 0.7% in Tokyo.
At the same time, reports that Greece had gained European Union and International Monetary Fund approval of its latest five-year austerity plan fueled hopes for progress on resolving the country’s sovereign-debt crisis. Read more on Greek austerity plan deal.
This helped some exporters gain in Tokyo, with Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 +2.06% /zigman2/quotes/208567357/composite SNE +0.65% rising 2.4%, Toyota Motor Co. /zigman2/quotes/203803129/delayed JP:7203 +2.77% /zigman2/quotes/200537742/composite TM -1.10% , closing 1.1% higher, and Toshiba Corp. /zigman2/quotes/205628942/delayed JP:6502 -1.65% /zigman2/quotes/204149068/delayed TOSYY -1.69% adding 4.9%. Sony and Toshiba were also aided by Mitsubishi UFJ Morgan Stanley Securities upgrades of each firm’s shares to outperform from neutral.
In Seoul, Samsung Electronics Co. , rose 2.5%, and LG Display Co. /zigman2/quotes/204466928/composite LPL +0.61% gained 5.2%.
Losses for Telstra Corp. /zigman2/quotes/201936124/delayed AU:TLS +1.07% /zigman2/quotes/202275272/delayed TTRAF -3.16% weighed once again in Sydney, with the Australian telecom major extending losses from the previous session, when it signed a deal with the Australian government to enable access to its broadband infrastructure.
Telstra shares finished down 2.7% on Friday, bringing week-to-date losses to over 5%.
Meanwhile, shares of Italian fashion house Prada SpA /zigman2/quotes/200575701/delayed HK:1913 0.00% chalked up mild gains in their Hong Kong trading debut, rising 0.3% but underperforming the broader market. The shares had traded lower in the gray market in the days ahead of the launch.
Chris Oliver in Hong Kong contributed to the report.