Asian Shares Higher; Sanyo Electric Powers Up

SINGAPORE -- Asian stock markets were broadly higher Wednesday as investors cheered the gains for U.S. stocks. In Japan, Sanyo Electric powered higher on a report that Toyota Motor would buy batteries for hybrid vehicles from it.

There were more signs of a recovery for the U.S. economy Tuesday as better-than-expected second quarter results from retailers - Home Depot and Target - helped lift the Dow Jones Industrial Average 0.9%.

Japan's Nikkei 225 was up 0.1%, Australia's S&P/ASX 200 was 0.9% higher, South Korea's Kospi Composite gained 0.3% while New Zealand's NZX-50 rose 0.7%. DJIA futures were 15 points lower in screen trade.

Still, many investors were waiting for Chinese markets to open. The Shanghai Composite index closed up 1.4% Tuesday, after a 9% tumble in the previous two sessions.

"The bounce in China stocks (on Tuesday) will likely help stabilize sentiment. But the Kospi will likely be impacted by the performance of Shanghai shares again today, and investors are expected to closely watch if Chinese stocks can extend their gains," said J.J. Park at Taurus Investment & Securities.

In Japan, Sanyo Electric surged 16.1% after the Nikkei reported that Toyota Motor would procure batteries for hybrid vehicles from Sanyo starting around 2011 because the automaker's own battery joint venture could not keep up with demand.

The Nikkei said Toyota will first use Sanyo batteries in a hybrid minivan slated to debut around 2011. Toyota shares were 1.5% higher.

Technology shares were getting some support from Hewlett Packard's after-hours release of fiscal third quarter profits that were just above the company's May targets. It also issued a fiscal fourth-quarter earnings view that was above expectations. The technology giant said it was seeing a "stabilized market" and suggested that technology spending has hit bottom.

Japan's Toshiba rose 2.0% while South Korea's Hynix Semiconductor was up 2.9%.

New Zealand shares were helped by positive results from casino, cinema and hotel operator Sky City. The stock was up 1.5% after it posted better-than-expected fiscal year results. "The results have been reasonably positive here and across Australia and the U.S., and generally you are seeing a 'buy the dip' mentality," said Brad Gordon, adviser at Macquarie Equities.

Fletcher Building was up 1.3% as its Australian peer Boral's earnings beat expectations. Auckland Airport was up 2.4% while Fisher & Paykel Appliances rose 3.8%.

In Australia, Boral was up 3.9%. Qantas was up 5.4% after reporting pretax profit of A$181 million, near the top end of its A$100 million-A$200 million guidance.

In foreign exchange markets, the euro received a boost against the U.S. dollar and the yen, helped by improved risk appetite as equity markets rose. The euro was at $1.4162 from $1.4135 in late New York trade on Tuesday and at Y134.22 from Y133.84. The dollar was at Y94.78 from Y94.70.

The lead Japanese government bond futures contract was lower as Tokyo shares rose and was last off 0.02 at 138.72 points while the 10-year cash JGB yield was down 0.5 basis point at 1.335%.

Spot gold was at $941.20 per troy ounce, up $3.10 from the New York close. Standard Bank analysts said physical buying was providing support for the yellow metal: "In January, we would see (physical) buying coming in at $850-$870. Now, we see buying whenever the gold price gets close to $900-$920."

However, the bank added "part of the buying is likely to be seasonal and this support may move lower again once seasonal demand passes towards year-end."

Base metals were a little firmer with the LME three-month aluminum futures contract trading at $2,013 per ton, up $8 from the London kerb. LME three-month copper was at $6,120 per ton, up $40.

Barclays Capital revised up its LME cash base metal price forecasts, and said it expected further upside in most markets as the economic recovery gathered steam. It now expects LME cash copper to average $5,140 per ton this year, and $6,438 next year. LME cash aluminum this year was tipped at $1,650 per ton on average and $1,875 per ton next year.

The Nymex September crude oil futures contract was up $1.02 from the New York close, at $70.21 per barrel on Globex, extending its $2.44 gain on Tuesday. Prices were lifted by an after-hours report from the American Petroleum Institute which showed that U.S. crude oil inventories fell by 6.134 million barrels in the week ended August 14. Analysts had expected a rise.