By Virginia Harrison, MarketWatch
MUMBAI (MarketWatch) — Asian stocks rallied Tuesday, with resources and banking firms among the best performers, as investors showed more appetite for riskier assets in the wake of strong U.S. equity gains.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.39% closed up 1.2%, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.49% ended with a 0.8% gain, and Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -0.33% finished 0.1% higher.
Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.03% led the region with a 1.7% gain, but China’s Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 -0.45% lost 0.4%.
The gains in Asia followed a positive finish for U.S. stocks, where sentiment was buoyed by an upbeat report on personal spending. Read more about the U.S. session.
Asia more resilient to global recession
Asian countries are better prepared for a global recession now than in 2008 because of a lesser reliance on exports.
RBC Capital Markets strategists described upward revisions to the previous month’s U.S. personal spending data as the “icing on the cake“ for investors.
“For a market still bathing in the Bernanke glow, this was an eagerly consumed slice of cake. ... It’s not a terrifically well constructed cake but was sweet enough to draw market interest into risk assets,” they said of the data, with reference to Federal Reserve Chairman Ben Bernanke’s comments Friday that kept options open for further easing.
Financial stocks rose in Asia, tracking sharp gains for the sector in U.S. and European trading hours after news of a merger between Greece’s EFG Eurobank Ergasias SA and Alpha Bank SA. Read more about the European session.
Shares in Aozora Bank Ltd. /zigman2/quotes/202607094/delayed JP:8304 0.00% surged 8.2% amid reports that Australia & New Zealand Banking Group Ltd. (ANZ) /zigman2/quotes/205482049/delayed AU:ANZ +0.78% /zigman2/quotes/204542251/delayed ANEWF +2.67% was considering a takeover of the Japanese bank.
Shares in ANZ lost 0.2% in the Sydney session, underperforming its peers, with Macquarie Group Ltd. /zigman2/quotes/206727308/delayed AU:MQG -0.28% /zigman2/quotes/209628452/delayed MQBKY -0.51% putting on 3.2%.
Hong Kong-listed shares of China Construction Bank Corp. /zigman2/quotes/208058581/delayed CN:601939 0.00% /zigman2/quotes/208974133/delayed HK:939 -0.61% /zigman2/quotes/207732534/delayed CICHY -0.83% gained 1.8%, shrugging off news that Bank of America Corp. /zigman2/quotes/200894270/composite BAC +0.37% will sell half of its stake in the Chinese lender.
“Bank of America selling off China Construction Bank is definitely a positive, and [Warren] Buffett’s investment into Bank of America helps to stabilize the sludge in U.S. financials, but the overall picture has not really changed much,” said Tom Kaan, director of equity sales at Louis Capital Markets in Hong Kong.
“There are still a number of headwinds, primarily the situation in Europe. The European factor in the equation has not been resolved at all,” Kaan said.
Technology shares also showed strength, with Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 -0.57% /zigman2/quotes/208567357/composite SNE -0.49% climbing 3.5%, Toshiba Corp. /zigman2/quotes/205628942/delayed JP:6502 -1.07% /zigman2/quotes/204149068/delayed TOSYY -3.05% up 2.1% and Elpida Memory Inc. adding 1.8% in Tokyo trading, while LG Electronics Inc. /zigman2/quotes/206354790/delayed LGEIY 0.00% surged 4.1% in the Korean session.
Auto makers posted solid gains in Japan, with Hino Motors Ltd. /zigman2/quotes/209422954/delayed JP:7205 -0.20% /zigman2/quotes/207652388/delayed HINOY +0.93% adding 4.0%, Isuzu Motors Ltd. /zigman2/quotes/202637468/delayed JP:7202 +0.22% /zigman2/quotes/206362374/delayed ISUZY -1.43% rising 3.4% and Mazda Motor Corp. /zigman2/quotes/204777714/delayed JP:7261 -0.11% /zigman2/quotes/206326885/delayed MZDAY -0.25% gaining 3.1%.
Retail stocks underperformed in Tokyo trading, however, after government data showed July sales fell short of expectations, with sector-heavyweight Fast Retailing Co. Ltd. /zigman2/quotes/200663563/delayed JP:9983 -1.31% /zigman2/quotes/203924235/delayed FRCOY -1.53% losing 0.3%. See report on Japanese economic data.
Resource stocks climbed across the region, with Jiangxi Copper Co. Ltd. /zigman2/quotes/201668148/delayed HK:358 -1.24% /zigman2/quotes/201334192/delayed CN:600362 +0.13% /zigman2/quotes/204256025/delayed JIXAY -2.94% adding 2.9% and Aluminum Corp. of China Ltd. /zigman2/quotes/202960704/delayed HK:2600 +0.44% /zigman2/quotes/210453246/delayed CN:601600 -0.31% /zigman2/quotes/208051344/composite ACH -0.27% rising 4% in Hong Kong trading.
Rio Tinto Ltd. /zigman2/quotes/200083756/delayed AU:RIO -0.46% /zigman2/quotes/202627887/composite RIO -0.28% gained 1.7% and Fortescue Metals Group /zigman2/quotes/202351558/delayed AU:FMG -1.23% added 1.5% in the Sydney session. /zigman2/quotes/203600175/composite BTU -2.59%