By V. Phani Kumar, Rosalind Mathieson and Wei-Zhe Tan
HONG KONG (MarketWatch) -- Asian markets ended mostly higher Wednesday as most financial stocks staged another rally. But trading was volatile and gains were limited as investors looked for profit-taking opportunities after recent price rises.
The advance came in the wake of surprisingly strong U.S. housing data, with most Japanese lenders also aided after the Bank of Japan said it would provide more than $10 billion in subordinated loans to the banks.
"Last night's economic news has certainly gone some way to shoring up confidence. But risk appetite is fickle and could easily turn on a dime," said Danica Hampton, a strategist at Bank of NZ in Wellington.
Japan's Nikkei 225 advanced for a fourth straight session, ending 0.3% up at 7,972.17, after flirting with losses. Shares of Mizuho Financial Group /zigman2/quotes/204507985/delayed JP:8411 -1.53% /zigman2/quotes/200950467/composite MFG -0.72% gained 3% and Resona Holdings /zigman2/quotes/203178794/delayed JP:8308 -1.07% jumped 5.4%, while Sumitomo Mitsui Financial Group /zigman2/quotes/203656770/delayed JP:8316 -1.59% climbed 3.4%.
China's Shanghai Composite rose 0.2%, South Korea's Kospi added 0.5%, Taiwan's Taiex edged up 0.1% and Hong Kong's Hang Seng Index gained 1.9%, with the latter led again by a surge in market heavyweight HSBC Holdings /zigman2/quotes/202687335/delayed HK:5 -2.30% , which gained 5.5% for a seventh straight higher finish.
Steve Cheng, associate director at Shenyin Wanguo, said "window-dressing activities," or quarter-end purchases by fund managers to shore up the value of their portfolios, were also likely providing a lift to the markets.
"But when we look at the fundamentals or earnings side, we can't be very optimistic. It's too early to say the market has bottomed out. Because of government interventions, we'll see more volatility," he added.
Dow Jones Industrial Average futures were recently pointing toward a slightly lower opening on Wall Street. The benchmark average rose 2.5% Tuesday on news that U.S. housing starts increased 22.2% in February, compared to the prior month, to a seasonally adjusted 583,000 annual rate.
In Asian afternoon trading, India's Sensex gained 2.4% and Singapore's Straits Times advanced 1.1%.
Australia's S&P/ASX 200 index defied the broad regional trend after hefty gains Tuesday, to finish down 0.2% at 3,446.30. The index was weighed down by an 8.7% tumble in Rio Tinto /zigman2/quotes/200083756/delayed AU:RIO -3.85% , on concerns about its $19.5 billion transaction with Aluminum Corp. of China after the Australian Senate agreed to conduct an inquiry on the proposed acquisition.
"I think we had our gains yesterday with the [Australian] market going up 100 points," said Chris Blair, Patersons' head of Sydney retail. "I'm still calling it a bear market rally, I still think it's got legs, but if it goes up another couple of hundred points, I'd be looking to go short."
The U.S. data also helped some construction stocks in Asia, with Australia's Boral /zigman2/quotes/208897707/delayed AU:BLD +2.18% /zigman2/quotes/202320023/composite BOALY -0.67% rising 4.5% and James Hardie /zigman2/quotes/201411224/delayed AU:JHX -1.91% /zigman2/quotes/200042563/composite JHX -0.90% surging 5.9%. New Zealand's Fletcher Building /zigman2/quotes/200215142/delayed NZ:FBU -0.42% /zigman2/quotes/206921557/composite FRCEF -12.16% added 6.1% and South Korea's GS Engineering & Construction Corp. rose 3.6%, while DLF jumped 7.9% in Mumbai afternoon trading.
Among financials, Australia & New Zealand Banking Group added 2.6% in Sydney and Cathay Financial Holding Co. rose 1.1% in Taipei.
Chugai Pharmaceutical Co. ended 5.9% lower in Tokyo, after saying a study showed its rheumatoid arthritis drug Actemra might be a causal factor in the deaths of 15 patients.
In Hong Kong, trading in shares of China Huiyuan Juice was halted early in the day, after its shares plunged 19.4% on concerns over Coca-Cola Co.'s $2.4 billion bid for the company. Later in the afternoon, the Chinese Ministry of Commerce said it rejected Coke's offer, as it didn't comply with China's anti-monopoly law.
Malaysia's main index rose 0.7% and Philippine shares gained 0.6%, while Indonesian shares were up 0.7% recently. New Zealand's NZX-50 ended up 1.6%.
In currency markets the euro was recently at 128.49 yen, from 128.17 yen late in New York. It bought $1.3018, from $1.3009.
The U.S. dollar was changing hands for 98.67 yen from 98.54 yen, reversing early declines. The rise came after the Bank of Japan left interest rates unchanged, as expected, and said it would broaden its purchases of government bonds to bolster liquidity and ensure market stability.
Spot gold recently dropped $5.30 from New York levels, to $909.60 a troy ounce. April Nymex crude-oil futures were at $48.51 a barrel, down 65 cents from New York level.