Asian Shares On The Rise; Financials, Techs Gain In Tokyo

SINGAPORE -- Asian equity markets were higher Thursday after gains on Wall Street, with financial stocks recovering in Tokyo and technology shares aided by a positive update from U.S. chip maker Texas Instruments.

Japan's Nikkei 225 was up 1.3% with Australia's S&P/ASX 200 up 0.9%, South Korea's Kospi Composite 1.0% higher and New Zealand's NZX-50 rising 0.2%. Dow Jones Industrial Average futures were flat in screen trade.

Investors are betting "the global economy will enter a 'Goldilocks' period of growth being not too hot for central bank hikes and not too cold to revive deflation fears," said analysts at UBS, adding the house's global asset allocation team has recommended rotating further into equities.

"The flow of macro data doesn't seem likely to sour soon, policy stimulus remains in place, production should continue to recover from last year's depressed levels, and final demand in the global economy may start to rise again," they said.

Still, the news was not all good. Data showed Japanese core machinery orders fell 9.3% on-month in July, in another sign Japanese firms are still trimming investment. The fall was worse than the 3.6% drop expected on average by economists and the Nikkei, and was the lowest level for orders on record.

Buyers came back into bank stocks in Japan after a recent slide in the sector, with Mitsubishi UFJ FG up 3.2%.

Tokyo Electron gained 1.6% and Sumco rose 4.3% after Texas Instruments raised its third-quarter outlook, offering further evidence the semiconductor market is brighter after several quarters of dropping demand.

Kirin Holdings ticked 1.0% higher. The Wall Street Journal cited people familiar with the matter as saying Japan's Suntory Holdings is close to a deal to buy Orangina SAS, maker of the famed soft drink; Suntory itself is in parallel merger talks with Kirin Holdings.

Australia's main index briefly hit an 11-month high, bolstered by cyclical stocks like banks. Westpac gained 1.2%, with Westfield up 2.8% and Qantas rising 4.3%.

Gold stocks underperformed after a recent strong run, with Newcrest down 1.6%.

Traders in Korea were awaiting the outcome of the Bank of Korea's policy meeting, though no change in interest rates was expected.

Steel shares were higher, still benefiting from the recent rise in commodity prices, with Posco up 1.2%.

New Zealand stocks were fairly flat, with recent gains in the New Zealand dollar still weighing on shares of exporters. Chipmaker Rakon fell 1.5% with fishing company Sanford off 1.4%.

Currency market trade was quiet after the U.S. dollar fell against the euro in New York. The euro was at $1.4549, from $1.4551 late in New York, and at Y134.09, from Y133.90, with the U.S. dollar at Y92.17, from Y92.08.

The New Zealand dollar overcame an initial fall despite the country's central bank keeping the Official Cash Rate at a record low 2.50% and largely retaining its easing bias, resisting pressure to move to a neutral stance. The currency was recently at US$0.6985, from US$0.6955 before the Reserve Bank of New Zealand announcement.

Lead September Japanese government bond futures were slightly higher, rising 0.01 to 139.27 points. Analysts said there was some caution before an auction of 20-year JGBs on Tuesday.

October Nymex crude oil futures were 32 cents higher at $71.63 a barrel on Globex, after weekly U.S. oil inventory data from the American Petroleum Institute showed a drop of 7.2 million barrels in oil stocks, more than the 1.5 million barrel fall expected.

Earlier, the Organization of Petroleum Exporting Countries agreed, as expected, to keep oil-production quotas unchanged.

Spot gold was 20 cents higher from New York, at $992.60 a troy ounce, with much debate on whether the yellow metal can retake - and hold - the $1,000 mark.

"The likelihood of weak jewelry demand going forward and a surge in scrap supply may eventually press gold lower by the end of the year, in our view," said HSBC analyst James Steel. HSBC forecasts gold at $925 for 2009 and at $950 for 2010 as a whole.

LME three-month copper fell $35 from London levels, to $6,380 a metric ton.