Asian Shares Boosted By U.S. Jobs Report; Rio Drops

SINGAPORE -- Asian stock markets were higher Monday, lifted by a better-than-expected U.S. jobs report and gains on Wall Street Friday. In Australia, new reports on China's accusations against Rio Tinto drove the miner's shares lower.

"Bottom line is the (U.S. jobs) data is good in detail as well as headline and revisions are in the right direction. This will likely strengthen the green shoots story and take some pressure off the Obama Administration's defenders that the stimulus plan is not working," said analysts at Brown Brothers Harriman in a note.

Data released Friday showed U.S. employers cut 247,000 jobs in July after shedding a revised 443,000 a month earlier. The July drop was less severe than the 275,000 fall forecast by economists in a Dow Jones Newswires survey. The unemployment rate slid to 9.4% from 9.5% in June, compared with expectations for a rise.

The Dow Jones Industrial Average rose 1.2% on Friday, while the Nasdaq Composite index gained 1.4%.

Japan's Nikkei 225 was up 1.1%, Australia's S&P/ASX 200 was up 0.7%, South Korea's Kospi Composite gained 0.2% and New Zealand's NZX-50 was 0.6% higher. DJIA futures were about eight points lower in screen trade. Singapore markets were closed for a public holiday.

In Australia, Rio Tinto was down 2.0% following weekend accusations published on a website that says it is affiliated with China's state secrets bureau, that Rio illegally obtained information about China's steel sector for six years, which resulted in Chinese steelmakers being overcharged more than $100 billion for iron ore.

Ord Minnett analyst Peter Arden said investors had been hoping that the issue of the four detained Rio employees was cooling off, but that these latest statements have revived fears.

Arden said the issue may weigh on Rio's shares until it is resolved, even though iron ore sales will continue. "The reality is that China needs the iron ore," he said.

BHP was down 1.5%, while Fortesque was up 2.5%, Bluescope gained 4.0% and Westfield rose 3.1%.

Patersons' senior trader, Chris Blair expected the Sydney market to consolidate, with the benchmark index likely to post a 20 point gain. "I think we'll wait to tonight to see if Friday's gains on Wall Street are sustainable. It was probably a bit of a knee-jerk reaction to those U.S. jobs figures and I think the market is too stretched."

The Japanese stock market was enjoying a broad-based rally with exporters lifted by the yen's weakness against the dollar over the weekend. Toyota was up 2.2%, Honda gained 3.2%, Canon 2.6% and Sony 2.4%.

Data released before the market open showed Japanese core machinery orders rose 9.7% in June from the previous month, but the data also showed that Japanese companies expect core orders to decrease 8.6% from the previous quarter in the July-September period; "The June figure is positive but the July-September forecast is negative, so overall, the data won't move the market much," said Tachibana Securities analyst Kenichi Hirano.

Sentiment in Seoul was lifted after the International Monetary Fund said Sunday it has sharply revised upward its 2009 growth outlook for the country, citing the government's "timely" and "comprehensive" measures to mitigate the financial and economic turbulence that erupted after the collapse of Lehman Brothers last year.

"Of course, the U.S. job data and IMF news are positives for sentiment, but stocks have risen sharply already, reflecting expectations for the global economic recovery," said Lee Jin-woo at Mirae Asset Securities.

Banks were leading with KB Financial up 2.1% and Shinhan Financial 1.1% higher.

In New Zealand, bellwether Telecom underpinned the market, rising 1.1%. Retailer Hallenstein Glasson was up 3.9% while Fletcher Building had lost 1.0%.

In foreign exchange markets, the yen was a little higher against the euro and the dollar due to demand from Japanese exporters. Trade was light and in a relatively tight range with some traders away for summer vacations.

The dollar was at Y97.30 from Y97.48 in late New York trade, while the euro was at $1.4197 from $1.4169 and at Y138.14 from 138.46.

The September Japanese government bond futures contract was sharply lower, down 0.22 at 137.37 points, weighed by the Nikkei's rise.

Spot gold was down $2.10 from late in New York, at $951.80 per troy ounce. LME three-month copper dropped to $6,085 per metric ton, down 1.1% from the afternoon kerb Friday, with just 131 lots traded so far in Asia.