By Shri Navaratnam And Wei-Zhe Tan
South Korean shares ended at their highest level in more than three years on Tuesday as Hyundai Heavy Industries led shipbuilders higher on a big new order. Metal and energy sector shares advanced in several markets as a weakened U.S. dollar boosted commodity prices.
The Korea Composite Stock Price Index, or Kospi, advanced 0.6% to 2009.05, its first finish above 2,000 points since November 2007. Japan's Nikkei Stock Average climbed 0.2% to close at 10316.77, and Hong Kong's Hang Seng Index added 0.5% to end at 23431.19.
"The market's sharp gains yesterday were driven by pent-up demand following milder-than-expected policy tightening [by China's central bank]," said Zhuo Xiangyu , an analyst at China Securities Information. "But many people are still concerned about potential further policy tightening in the near term, so [overall] the investment [mood] tends to be rather cautious."
Beijing raised banks' reserve-requirement ratio by half a percentage point Friday but refrained from an interest-rate increase despite a sharp increase in monthly inflation. The restraint in tightening helped to support commodity prices and stocks on Wall Street overnight.
Tuesday in Asia, commodity-related stocks were among the best performers, with Newcrest Mining /zigman2/quotes/203840223/delayed AU:NCM +1.45% rising 1.7% and Woodside Petroleum /zigman2/quotes/203437212/delayed AU:WPL -0.15% gaining 1.4% in Sydney, and Inpex /zigman2/quotes/206689846/delayed JP:1605 -0.23% adding 2.6% in Tokyo.
Shipbuilding stocks jumped in Seoul after Hyundai Heavy Industries said it received a $1.45 billion order from German liner Hapag-Lloyd AG to build four container ships.
Hyundai Heavy surged 8.9% and Samsung Heavy Industries climbed 5.7%.
Woori Finance Holdings /zigman2/quotes/203604265/composite WF -0.95% fell 4.6% on worries that the government's efforts to sell its 57% stake in the firm may falter after South Korean groups that had shown interest in the stake said Monday that they were dropping out of the sales process.
Stock gains in Tokyo were constrained as the yen's overnight strength against the U.S. dollar dragged down some exporters. Canon /zigman2/quotes/210242912/composite CAJ -1.32% fell 0.5% and Sony /zigman2/quotes/208567357/composite SNE -1.20% declined 0.6%.
"We are seeing a temporary market correction on the back of a stronger yen, combined with a pre-existing sense of overheating," says Yutaka Miura , a senior technical analyst at Mizuho Securities. He said investors are turning their attention to the U.S. Federal Reserve's policy-setting meeting later in the global day and the Bank of Japan's quarterly tankan survey early Wednesday.
Mitsubishi Motors /zigman2/quotes/202404490/delayed JP:7211 -0.25% jumped 8.5% and Nissan Motor /zigman2/quotes/208298710/delayed JP:7201 -0.06% closed up 0.3% after a Nikkei business daily report that the auto makers had agreed to begin joint development of mini-vehicles. After the market close, the two companies said they are considering a 50-50 joint venture and also plan to expand their existing pact. The latest deal will enable both companies to offer more models without spending on developing and production, while they will be able to increase their production volumes by supplying vehicles to their partners.
In Hong Kong, China Coal Energy /zigman2/quotes/201486584/delayed HK:1898 -0.37% rose 2.9% after the coal producer said Monday its November output rose 40% from a year earlier.
Banks rose after a China Securities Journal report Tuesday cited unnamed "authoritative sources" as saying China's new yuan loan quota for 2011 will be the same as this year's. Bank of China /zigman2/quotes/204682472/delayed HK:3988 -0.93% advanced 1.4%, and Industrial & Commercial Bank of China /zigman2/quotes/201401473/delayed HK:1398 -0.54% ended 0.9% higher.
In Sydney, AGL Energy fell 4.9% after confirming that it hasn't acquired any of several key electricity assets being privatized by Australia's New South Wales state.
Write to Shri Navaratnam at firstname.lastname@example.org