Asian stocks up as world markets firm

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HONG KONG: Asian stocks were mostly higher on Tuesday, consolidating impressive gains after Wall Street firmed and Europe ended the day in positive territory.

Tokyo shut for lunch 0.33 percent higher, Hong Kong was 0.59 percent up and Shanghai rose 0.22 percent. Sydney yo-yoed and was flat by the break.

Seoul, which missed out on the large gains seen in regional markets on Monday because of a national holiday, was making up lost ground on Tuesday, adding 3.88 percent by mid-morning.

Asia's main bourses recorded a very strong start to the week after a turbulent few days that had seen big falls, with traders scrambling to follow almost any lead.

The positive example set by the region was followed by Europe, where the main bourses all ended the day in the green, and in turn by Wall Street, where the Dow Jones Industrial Average leaped 1.90 percent; the S&P 500 added 2.18 percent, and the tech-rich Nasdaq Composite gained 1.88 percent.

Wall Street's gain -- the third straight session in which the market ended up -- came as global investors cheered a move by Google to buy Motorola Mobility Holdings.

But the outlook for the Tokyo bourse remains uncertain, with investors still fretting over a painfully strong yen, which is threatening to dampen Japan's recovery from its March 11 quake and tsunami disaster.

A strong currency hits exporters by making their goods more expensive overseas and eroding repatriated profits.

Cosmo Securities strategist Toshikazu Horiuchi said Tokyo shares were "just going along with overseas markets".

On the forex market, the yen remained at near post-WWII highs against the dollar, standing at 76.81 in Tokyo, little changed from 76.83 yen in New York Monday evening.

The euro was changing hands at $1.4437 and 110.89 yen, compared with $1.4440 and 110.95 yen.

Japanese shares remained attractive, with about 65 percent of the Tokyo market's first section shares trading under book value, said Hiroichi Nishi, general manager at SMBC Nikko Securities.

Google's announcement brightened sentiment, but worries about the US economic outlook remained, Nishi said.

"While the (merger-and-acquisition) news served as a positive catalyst, we still need to keep our eyes on US economic indicators," he added, citing weaker-than-expected data on New York-area manufacturing activity.

Japan on Monday announced its economy shrank an annualised 1.3 percent in the April-June quarter following the March disasters, far better than market expectations of a 2.7 percent contraction.

Qantas was a rare mover on the Australian market as traders welcomed a major restructuring plan unveiled by the airline, with its shares pushing 2.61 percent higher to Aus$1.57.

Oil prices dipped, with New York's main contract, West Texas Intermediate crude for delivery in September, down 45 cents to $87.43 a barrel in the Asian morning.

Brent North Sea crude for September was down 42 cents to $109.49.

Gold opened at $1,766.00-$1,767.00 per ounce, up from its Monday close of
$1,744.00-$1,745.00, but still well off the more than $1,800 it hit last week.

Global investors were expected to turn their eyes to a meeting later in the global day between key figures in the eurozone.

French President Nicolas Sarkozy will host German Chancellor Angela Merkel in Paris to produce a road map for the 17-nation bloc as it battles its growing sovereign debt crisis.

Markets have been watching anxiously to see whether they will agree a plan to boost fragile confidence that has seen trillions of dollars wiped off stock markets over the past fortnight as investors dumped shares over concerns of a global slowdown, eurozone debt, and a US credit rating downgrade. (AFP)