Asian shares extend gains after US data

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HONG KONG: Asian stock markets rose for a second straight day on Tuesday after another Wall Street rally followed a better-than-expected batch of US consumer spending data.

A slight rebound in confidence and news of merger plans in Greece's banking sector also boosted risk sentiment -- providing support to the euro and dollar - while oil prices edged up on hopes for demand growth in the United States.

Tokyo rose 1.16 percent, or 102.55 points, to 8,953.90 while Seoul ended 0.78 percent, or 14.32 points, higher at 1,843.82 and Sydney added 0.14 percent, or 5.9 points, to 4,269.2.

Hong Kong climbed 1.73 percent in the afternoon and Shanghai added 0.10 percent.

The advances extended gains from Monday, when dealers were cheered by comments from US Federal Reserve chief Ben Bernanke that stopped short of fresh stimulus for the US but left the door open for measures further down the line.

On Monday the US Commerce Department reported that consumer spending, a pillar of the world's largest economy, rebounded 0.8 percent in July, after a 0.1 percent dip in June, the fastest pace since February.

The data sent Wall Street higher. The Dow jumped 2.26 percent, the S&P 500 surged 2.83 percent and the Nasdaq shot up 3.32 percent.

Dealers will now be looking to the upcoming release of key data from the United States, including jobs, consumer confidence, manufacturing and factory orders, for a clearer idea of the state of the economy.

"Signs of a market-based and economic recovery are in the wind as a turbulent month draws to a close," said Ben Le Brun, market analyst at CMC Markets in Sydney.

Global markets have suffered a torrid August, with massive selling as the United States' credit rating was downgraded, eurozone debt fears continued to weigh and economic indicators pointed to a possible new worldwide recession.

On the forex market the dollar held steady at 76.84 yen in Tokyo morning trade, marginally up from 76.83 yen in New York late Monday.

The euro fetched $1.4515 after $1.4510, and 111.55 yen compared with 111.52 in New York.

Meanwhile there was some positive news from Europe, where the sovereign debt crisis has been weighing on market sentiment.

Two Greek banks, Alpha Bank and Eurobank, announced that they were merging and receiving a sizable Qatari investment, the first good news from Greece's banking sector for some time.

Currency rates were unmoved by data Tuesday showing that Japan's jobless rate stood at 4.7 percent in July, up 0.1 percentage point from the previous month, excluding figures from the disaster-hit northeast of the country.

On oil markets in afternoon trade, New York's main contract -- light sweet crude for October delivery -- added 29 cents to $87.56 a barrel, and Brent North Sea crude for October delivery gained 49 cents to $112.37.

Gold opened at $1,798.00-$1,799.00 an ounce in Hong Kong, down from Monday's close of $1,821.00-$1,822.00. (AFP)

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