By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Asian stocks extended gains Tuesday on expectations Beijing will fine-tune its policies to support China’s economic growth and as the Japanese government upgraded its view of the economy for a third straight month.
Resource sector shares also pulled higher after a strong increase in the prices of gold and silver overnight, while Chinese telecommunications firm ZTE Corp. soared after reporting its first-half results.
/zigman2/quotes/210598030/delayed HSI 29,056.42, +173.38, +0.60%
/zigman2/quotes/210599714/realtime SPX 3,329.62, +12.81, +0.39%
The Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP +0.05% rose 2%, and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.60% rallied 2.3% to lead the region’s advance.
The gains came after a state newspaper cited Premier Li Keqiang as saying last week at a meeting of the State Council, China’s cabinet, that the government would take action to ensure economic growth doesn’t fall below 7%.
Meanwhile, Chinese Vice Premier Zhang Gaoli said Monday that policy makers were committed to speeding up economic restructuring and would take steps to support reasonable infrastructure and social-welfare investments, according to a Reuters report.
• 10 world-famous pre-‘iWatch’ timepieces
• Why Rolex isn't fretting over an Apple iWatch
• Smartphones leave room for Swatch (24/7 Wall St.)
• A renaissance in American watchmaking
China’s foreign-exchange regulator said separately that the country wasn’t seeing any capital flight.
“Outflows of hot money triggered reserve losses everywhere in Asia including China in June. With the end of the market panic, we expect the outflows to abate and market moves triggered by stale flow data will be reversed,” said Singapore-based ING economist Tim Condon.
Meanwhile, Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +0.45% overcame a lower opening to rise 0.8% after the government said the economic recovery had become self-sustaining.
Shutterstock Enlarge Image
The region’s stock advances came after the Standard & Poor’s 500 Index /zigman2/quotes/210599714/realtime SPX +0.39% rose to a fresh record overnight, despite a weak set of quarterly results from McDonald’s Corp. /zigman2/quotes/203508018/composite MCD +0.54%
“Markets have gradually digested the message that Fed tapering need not equate to an earlier onset of policy rate hikes and see this as broadly priced in by now. We expect markets to give more weight to fundamental issues in the near term,” Barclays analysts wrote in a report.
Shares of several metals companies advanced around the region after gold and silver prices jumped in U.S. trading.
Newcrest Mining Ltd. /zigman2/quotes/203840223/delayed AU:NCM +0.82% /zigman2/quotes/206026738/delayed NCMGF +2.11% rallied 5.4% in Sydney, Korea Zinc Co. /zigman2/quotes/202765860/delayed KR:010130 -0.83% climbed 1.6% in Seoul, and Sumitomo Metal Mining Co. /zigman2/quotes/205273301/delayed JP:5713 -0.11% /zigman2/quotes/203832662/delayed STMNF -6.44% added 4.3% in Tokyo.
Shares of Chinese gold miner Zijin Mining Industry Co. /zigman2/quotes/204517000/delayed HK:2899 +1.55% /zigman2/quotes/203833875/delayed CN:601899 +2.21% /zigman2/quotes/209836076/delayed ZIJMF +0.77% surged 7.9%, and Jiangxi Copper Co. /zigman2/quotes/201668148/delayed HK:358 +0.75% /zigman2/quotes/201334192/delayed CN:600362 -0.97% /zigman2/quotes/204256025/delayed JIXAY +2.55% rose 5.2% in Hong Kong; in Shanghai trading, they gained 2.4% and 3.1%, respectively.
Shares of ZTE Corp. /zigman2/quotes/209674390/delayed CN:000063 +3.82% /zigman2/quotes/205359573/delayed HK:763 +7.31% /zigman2/quotes/205386796/delayed ZTCOY +5.07% spiralled 19.5% in Hong Kong and by the day’s 10% limit in Shenzhen. The surge came after the telecommunications-equipment maker said the business environment was expected to improve later this year, and reported a strong increase in first-half profit despite a decline in operating revenues.
Chinese property developers also advanced amid expectations for policy intervention to support growth. Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 +0.56% rose 3.6% in Shanghai, and China Overseas Land & Investment Ltd. /zigman2/quotes/205731176/delayed HK:688 -2.15% /zigman2/quotes/202573805/delayed CAOVY -1.95% climbed 4.1% in Hong Kong.
Gold spikes on hopes of more stimulus
Gold futures climb above $1,300 an ounce as investors bet on continued easy monetary policy after elections in Japan and last week's comments from Federal Reserve chief Ben Bernanke. Photo: AP.
In Tokyo, telecommunication shares added to their recent gains, with KDDI Corp. /zigman2/quotes/204923990/delayed JP:9433 +0.34% /zigman2/quotes/205540401/delayed KDDIY -0.13% rising 2.1%, and Nippon Telegraph & Telephone Corp. /zigman2/quotes/200718273/delayed JP:9432 +0.68% climbing 1%.
Some exporters suffered losses, however, as the U.S. dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0009% traded below the ¥100-level.
Shares of Hino Motors Ltd. /zigman2/quotes/209422954/delayed JP:7205 +0.54% /zigman2/quotes/207652388/delayed HINOY +0.93% lost 3%, while farm-and-construction-equipment maker Kubota Corp. /zigman2/quotes/201871403/delayed JP:6326 +1.47% /zigman2/quotes/208058298/delayed KUBTY +0.86% fell 1.9%.
Mitsubishi Motors Corp. /zigman2/quotes/202404490/delayed JP:7211 +2.47% /zigman2/quotes/200876874/delayed MMTOF -3.02% fell 3.1%, after the Nikkei newspaper reported it will likely post a 7% growth in group operating profit for the quarter ended June 30.
Tokyo Electric Power Co. /zigman2/quotes/202771076/delayed JP:9501 -0.69% /zigman2/quotes/205839055/delayed TKECY +0.73% tumbled 6.7% after Kyodo News reported the company admitted that contaminated water from the disaster-struck Fukushima nuclear plant was leaking into the Pacific Ocean.