Asian Shares End Higher; Nikkei Snaps Losing Streak; +2.3%

SINGAPORE -- Asian shares ended higher Tuesday after strong gains on Wall Street, with commodity stocks buoyed by a bounce in metal and oil prices.

Japan's Nikkei 225 Average rose 2.3% to 9261.81 to snap a nine-session losing streak. Hong Kong's Hang Seng Index surged 3.7% to 17885.73 and Australia's S&P/ASX 200 closed 3.5% higher at 3867.10.

"With a big week ahead, including earnings from U.S. giant Goldman Sachs and significant economic data on inflation and retail sales, it remains to be seen if the rally is just a flash in the pan - or the start of a more sustainable rally," said Tim Hughes, head of sales trading at IG Index.

Auto makers were higher in Tokyo after the Nikkei reported they were stepping up production capacity in China amid brisk local demand, with Nissan Motor surging 7.3% and Honda Motor up 2.7%, while Toyota Motor rose 3.6%. Brokerage stocks also jumped in the broad market rebound, with Nomura Holdings soaring 6.9%.

China's Shanghai Composite rose 2.1%, with property developers and insurers boosted by a report of strong performance in June.

Elsewhere, Taiwan's Taiex gained 1.7%, South Korea's Kospi advanced 0.5% and in afternoon trading, India's Sensex climbed 3.7%.

Singapore's Straits Times Index was up 1.9% in late trading, with sentiment boosted by an upbeat advance reading on second-quarter gross domestic product. The city-state's GDP rose a better-than-expected 20.4% from the previous quarter, on an adjusted basis, from a revised 12.7% decline in the first quarter, though GDP did contract year-on-year.

"I think it is quite clear the worst is over, but the recovery will be tenuous," said Selena Ling of OCBC.

Dow Jones Industrial Average futures were up 29 points in screen trade recently, with investors awaiting earnings from companies like Goldman Sachs and Intel later.

"The ebb and flow of intraday risk attitudes will not sway us from the notion that when the dust settles the positions that we want to have on are anti-risk," said Societe Generale Interest Rates Strategist Patrick Bennett.

Rio Tinto rose 5.3% and BHP Billiton climbed 4.9% in Sydney, Mitsui Mining & Smelting surged 7.8% in Tokyo, Sterlite Industries jumped 3.4% in Mumbai trading and Jiangxi Copper added 4.3% in Hong Kong and 1.4% in Shanghai.

In spite of the strong rebound, some analysts were skeptical the gains could be sustained.

Chris Blair, senior trader at Patersons, said the Australian market may struggle to get follow-on buying. "I'm of the opinion we will have a good reporting period, only because expectations are so low and we've had this correction. But we're still going to be a little cautious, with plenty of volatility to come."

In Seoul, Posco added 2.3% as its upbeat second-half earnings outlook offset downbeat second-quarter results.

In Mumbai, shares of HDFC Bank fell 1.0% despite the bank reporting higher-than-expected 31% year-on-year growth in fiscal first-quarter net profit. "The operating performance has shown a slowdown in line with sectoral trends," said Vaibhav Agrawal, vice president and banking analyst at Angel Broking.

Among Chinese property developers, shares of Poly Real Estate rose 1.8% in Shanghai, China Vanke gained 2.9% in Shenzhen and Guangzhou R&F Properties advanced 3.1% in Hong Kong after UOB KayHian cited official data to say national residential sales surged 35% in June from the previous month.

The brokerage also noted that Chinese insurers recorded strong insurance premiums in June. Shares of Ping An Insurance soared 5.2% in Hong Kong and 8.9% in Shanghai, while PICC Property & Casualty rose 3.3% in Hong Kong.

Shares of NEC Electronics shot up 10.2% after the Nikkei reported the company, alongside chip maker Renesas Technology, planned to ramp up output of microcontrollers.

In currency markets the euro bought 130.22 yen, from 130.08 yen late in New York, and $1.3983, from $1.3994. The U.S. dollar was at 93.10 yen, from 92.85 yen.

Spot gold was at $922.50 a troy ounce, up $1.70 from New York. Front-month Nymex crude oil futures were 67 cents higher on Globex, at $60.36 a barrel, after slipping 20 cents in New York.