Asian Shares Up On Wall St Cues; Axa Asia Still In Limelight

SINGAPORE -- Asian stock markets were mostly higher Tuesday after the rose to a new closing high for the year Monday. In Sydney, AXA Asia Pacific was trading higher a day after the firm rejected a combined takeover bid from AXA SA and AMP.

Investors in the U.S. were cheered by the absence of signals from the meeting of Group of 20 finance ministers on exiting loose monetary policies. That in turn boosted risk appetite, dented the U.S. dollar and buoyed commodity prices. 1

"While U.S dollar bulls are licking their wounds...all things risky" again becomes the theme for markets, said RBC Capital markets in a research note.

Japan's Nikkei 225 was up 1.5% with Australia's S&P/ASX 200 1.4% higher and South Korea's Kospi Composite up 1.2%. New Zealand's NZX-50 was flat.

Stock markets were getting a lift as "concerns about an immediate exit from economic stimulus programs seemed to have eased somewhat after the poor U.S. employment data," said Hwang Bin-ah at Kyobo Securities in Seoul.

Financials across the region were mostly higher after their U.S. counterparts helped pace the rise on Wall Street Monday.

National Australia Bank was up 1.5%, Commonwealth bank rose 1.3% while in Seoul Shinhan Financial was 2.4% higher and Woori Finance advanced 2.5%. In Tokyo Sumitomo Mitsui Financial Group was up 1.3% and Mizuho Financial was up 0.6%.

But some analysts were cautious that after gains Monday, and with the Nikkei 225 stock average approaching the crucial 10,000 level, profit-taking could emerge any time soon.

"When Wall Street and other global stock markets rise, Tokyo will follow, but the Japanese market's gains will be relatively limited unless trading volume grows," said Mizuho Securities market analyst Yukio Takahashi.

"Foreigners are not keen on buying Japanese stocks, because the (Japanese) government has yet to provide a sustainable economic growth strategy...it's not a very attractive investment," he said.

Energy stocks were gaining after crude oil futures rebounded Monday as the U.S. dollar weakened amid rising equities and as Tropical Storm Ida disrupted production in the Gulf of Mexico.

Light sweet crude for December delivery settled $2.00, or 2.6%, higher at $79.43 per barrel on Nymex, and was recently trading up 3 cents at $79.46 on Globex.

Woodside Petroleum was 2.0% higher, SK Energy had risen 2.7% while Inpex was 1.4% higher.

Metals stocks were enjoying good gains in Asia as the upward march for commodities prices continued in tandem with the U.S. dollar's weak run against the euro.

Rio Tinto was up 2.8% and BHP Billiton was 2.4% higher and Oz Minerals had gained 2.1%.

In Sydney, AXA Asia Pacific was trading 2.8% higher at A$5.86, a day after the firm rejected a combined cash and equity $11.0 billion takeover bid from AXA SA and AMP which valued the firm around A$5.34 per share. Citigroup and Merrill Lynch analysts both said a revised offer of around A$6 per share was needed to get shareholder support.

"We would be surprised if this is the end of the matter, rather we expect at some stage to see a revised offer which should find greater favor with the independent AXA APH directors," said an analyst at Citigroup.

In Seoul, banks were leading the market higher, with Hana Financial standing out, up 4.6%, partly due to a drop in Korean banks' ratio of non-performing loans. Brokerage firms such as Daewoo Securities, up 3.6%, and Samsung Securities, up 2.1%, were also buoyed by the continued rise in the benchmark Kospi.

Trade in New Zealand was tepid. News Infratil had sold its 3.87% stake in Auckland Airport was likely putting a "bit of cap on the market," said Hamilton Hindin Greene broker Adrian Vance, as investors used available funds to participate. AIA was down 2.6% with Infratil falling 1.3%.

In foreign exchange markets the U.S. dollar was steady against riskier units after falls Monday.

The euro was buying $1.4987 compared with $1.4990 late in New York Monday and Y134.80 compared with Y134.90. The U.S. dollar was at Y89.93 compared with Y89.99 while the Australian dollar was at US$0.9299.

"The (U.S.) dollar is likely to remain under pressure due to interest rate differentials, momentum, and lack of official concern (about dollar weakness from the G-20 meeting over the weekend)," said Brown Brothers Harriman in a report.

Spot gold was trading higher at $1,104.70 per troy ounce, up $1.80 from the New York close Monday.

Lead December Japanese government bond futures were flat at 137.38.

"Players will likely shrug off any rises in Tokyo stocks today, and buying pressure may be a bit stronger on the back of a solid U.S. Treasury market" Monday, said Mizuho Securities senior market analyst Makoto Noji in Tokyo. The 10-year cash JGB yield was flat at 1.470%.