By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Asian markets rebounded Tuesday after a higher finish on Wall Street and better-than-expected results from Alcoa Inc. Mainland Chinese shares rose after a choppy session as investors digested data showing an increase in consumer prices.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.35% jumped 2.6% for its highest finish in six weeks, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.24% gained 1.5% and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.14% added 0.7% to catch up with extended gains on Wall Street, where stocks clinched a third straight day of gains Monday.
The Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP +0.40% inched up 0.4% after changing direction a few times, while Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.49% gained 0.5%.
“The good vibes from the commencement of Wall Street’s second-quarter reporting season has continued to spread cheer,” said Betty Lam, a sales trader at CMC Markets.
Alcoa /zigman2/quotes/200686102/composite AA -1.28% began the U.S. reporting season at the end of the regular Wall Street trading session, with the aluminum major’s adjusted second-quarter earnings topping estimates.
However, “not all Asian markets are feeling the love, with Chinese equities bouncing between green and red today, fueled by mixed pricing and inflation data,” Lam said.
Official data released Tuesday showed June consumer prices in China rose 2.7% from the year-earlier month, while producer prices continued to deflate for the 16th straight month, dropping 2.7%.
/zigman2/quotes/210598030/delayed HSI 17,573.58, -87.32, -0.49%
The data had “little implication for policy, given a pop in food prices was the sole driver” of the surprise increase in consumer prices, said Annette Beacher, TD Securities’ head of currencies and interest-rates research in the Asia Pacific.
“The People’s Bank of China has little incentive to alter current monetary policy settings, given buoyant house prices and gross domestic product likely to expand this year close to the target rate of 7.5%,” Beacher said.
U.S. equity index futures advanced after the inflation figures, while the Australian dollar /zigman2/quotes/210560947/realtime/sampled AUDUSD -0.0148% — which is sensitive to Chinese economic data — charted a choppy path, also reacting to data showing business conditions hit a four-year low.
In Hong Kong trade, shares of China Mobile Ltd. /zigman2/quotes/200868736/delayed HK:941 +1.27% rose 0.6%, and China Resources Land Ltd. /zigman2/quotes/202417326/delayed HK:1109 +2.09% /zigman2/quotes/201656413/composite CRBJF +7.86% gained 1.2% to recover some recent losses.
Property developers declined in Shanghai, meanwhile, with Gemdale Corp. /zigman2/quotes/208026094/delayed CN:600383 +7.93% losing 4.4%, and Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 +5.71% falling 2.8%.
Gains were spread across several sectors in Tokyo. Shares of Sumitomo Realty & Development Co. /zigman2/quotes/206628792/delayed JP:8830 +0.56% /zigman2/quotes/205763034/composite SURDF +1.42% climbed 4.7%, utility Tokyo Electric Power Co. /zigman2/quotes/202771076/delayed JP:9501 +4.60% /zigman2/quotes/205839055/composite TKECY +45.26% rose 6.4%, apparel retailer Fast Retailing Co. /zigman2/quotes/200663563/delayed JP:9983 -0.84% /zigman2/quotes/203924235/composite FRCOY -2.19% added 4.5% and telecommunications firm KDDI Corp. /zigman2/quotes/204923990/delayed JP:9433 +0.10% /zigman2/quotes/205540401/composite KDDIY -0.34% gained 4.1%.
Central banking's newest fad
The new fad in central banking is something called macroprudential policy: targeting controls at particular areas of concern, such as raising minimum down-payment rules for home mortgages.
Dai-ichi Life Insurance Co. /zigman2/quotes/208507587/delayed JP:8750 +0.32% /zigman2/quotes/200865545/composite DCNSF +0.12% advanced 2% and Tokio Marine Holdings Inc. /zigman2/quotes/210254144/delayed JP:8766 +1.15% /zigman2/quotes/208992593/composite TKOMY +3.83% rose 2.2% after the Nikkei newspaper reported Japanese insurers were likely to be excluded from new global capital requirements set to take effect in 2016.
Hino Motors Ltd. /zigman2/quotes/209422954/delayed JP:7205 +0.32% /zigman2/quotes/207652388/composite HINOY 0.00% jumped 4.1% after a separate Nikkei report said it was expected to double its group operating profit in the quarter ended June 30.
Meanwhile, Alumina Ltd. /zigman2/quotes/210515632/delayed AU:AWC +0.98% climbed 3% in Sydney after Alcoa’s results.
Also supporting the Australian advance, Commonwealth Bank of Australia /zigman2/quotes/200638713/delayed AU:CBA +1.10% /zigman2/quotes/207018701/composite CBAUF +1.10% rose 1.7%, and BHP Billiton Ltd. /zigman2/quotes/201448516/delayed AU:BHP -0.79% /zigman2/quotes/208108397/composite BHP -0.60% advanced 2.1%.