By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — Asian stocks advanced Tuesday, with investors reacting to deal news and some local earnings amid signs that a massive storm was set to abate in the U.S.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.48% climbed 0.4%, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.04% advanced 0.7% and Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO +0.33% rose 0.2%.
U.S. stock markets remained shut on Monday as super storm Sandy barreled toward the East Coast.
Storm's impact on global markets
Sandy forces U.S. stock and options markets to go dark for Monday and Tuesday. What’s the likely impact on global trading?
“If the damage from Sandy is significant, markets will need to assess its potential impact on U.S. and world economic growth in coming days,” said Ric Spooner, chief market analyst at CMC Markets.
The storm’s center made landfall late Monday in southern New Jersey, with the extreme weather affecting much of the Northeast U.S., including New York, Washington and Boston. U.S. financial markets will be closed Tuesday as well. Read: Sandy super storm smashes into East Coast.
Still, signs were emerging that floodwaters will recede in the coming hours in New York, with Mayor Michael Bloomberg saying the heaviest rains had passed and that winds would soon ease to below gale-force. Read: New York flood surge to recede by midnight
Spooner at CMC said any economic hit from Sandy may not last for long.
“Natural disasters usually have an initial negative impact as production is lost. This is followed by a positive impact as economic activity increases to replace damaged infrastructure. As markets are forward-looking, they often move fairly quickly to anticipate the positive rebuilding phase after a natural disaster,” he said.
In Sydney, shares of Virgin Australia Holdings Ltd. soared 5.4% after the airline said it will issue shares to Singapore Airlines Ltd. /zigman2/quotes/208369943/delayed SG:C6L 0.00% , buy a controlling stake in budget carrier Tiger Airways Holdings Ltd. and acquire domestic carrier Skywest Airlines Ltd. . Shares of Skywest Airlines soared 44.6%, while Singapore Airlines rose 0.4%.
QBE Insurance Group Ltd. /zigman2/quotes/207050271/delayed AU:QBE 0.00% /zigman2/quotes/201857553/delayed QBEIF -6.73% , which has exposure to the U.S., fell 1.1%, extending losses from the previous session on storm-related concerns.
The firm’s share of insurance industry impact could be around 1% — or $50 million in losses totaling around $5 billion — similar to the hit it took from Hurricane Irene last year, said analysts at Deutsche Bank.
Asia-located investors were also keying into earnings, with /zigman2/quotes/205453964/composite GOOG -1.38% Nomura Holdings Inc. /zigman2/quotes/206251373/delayed JP:8604 +0.38% /zigman2/quotes/207276383/composite NMR -1.09% /zigman2/quotes/207276383/composite NMR -1.09% up 2.5% in Tokyo.
The Japanese financial giant posted a second-quarter net profit of 2.81 billion yen ($35.3 million) late Monday, helped by fixed-income trading and a better performance from its investment banking operations. Last year, the financial group posted a net loss of ¥46.1 billion.
Sharp Corp. /zigman2/quotes/203224600/delayed JP:6753 +0.41% /zigman2/quotes/207472799/delayed SHCAF +6.51% jumped 5.6% after Kyodo News said in an anonymously sourced report that the firm has entered into talks for a flat-panel alliance with U.S. tech majors Apple Inc. /zigman2/quotes/202934861/composite AAPL -2.63% , Microsoft Corp. /zigman2/quotes/207732364/composite MSFT -2.32% and Google Inc. /zigman2/quotes/205453964/composite GOOG -1.38%
Meanwhile, government data showed that Japanese industrial production fell 4.1% in September, a reading that was weaker than a 3.1% decline expected in a survey by Dow Jones Newswires. The data was released in the hours before a policy decision due from the Bank of Japan.
The yen had weakened in recent days in anticipation of more easing moves from the central bank to support the Japanese economy and the dollar ticked higher again against the yen on Tuesday.
Amid the currency moves, exporters in Tokyo advanced, with Canon Inc. /zigman2/quotes/207639533/delayed JP:7751 +0.28% /zigman2/quotes/210242912/composite CAJ -0.74% up 2.7% and TDK Corp. /zigman2/quotes/208948266/delayed JP:6762 -1.01% /zigman2/quotes/203182885/delayed TTDKF +6.72% 1.5% higher.
Property firms extended declines in Hong Kong, bruised after the government announced new taxes late last week. Sino Land Co. /zigman2/quotes/202960683/delayed HK:83 +0.50% /zigman2/quotes/206858840/delayed SNLAY +6.21% dropped 0,.7% while New World Development Co. /zigman2/quotes/202357413/delayed HK:17 +4.16% /zigman2/quotes/207378574/delayed NDVLY +1.45% declined 2.2%.
Earnings from some Chinese companies were poorly-received, with China Merchants Bank Co. /zigman2/quotes/209899244/delayed HK:3968 +9.43% /zigman2/quotes/208876947/delayed CIHKY -0.26% down 4.2%, China Citic Bank Corp. /zigman2/quotes/205809997/delayed HK:998 +3.95% /zigman2/quotes/204346887/delayed CHBJF +3.56% falling 1% and auto firm BYD Co. /zigman2/quotes/206867707/delayed HK:1211 +5.32% /zigman2/quotes/206767010/delayed BYDDY +1.01% tumbling 4.3%.
In Seoul, Kia Motors Corp. /zigman2/quotes/206019389/delayed KR:000270 +2.91% /zigman2/quotes/205439169/delayed KIMTF 0.00% and partner Hyundai Motor Co. /zigman2/quotes/206684590/delayed KR:005380 +0.90% /zigman2/quotes/204364212/delayed HYMTF -2.98% were helping the market to move higher. The firms advanced 2.3% and 3%, respectively, taking back some earnings-related losses made Monday.