Asian Shares Mostly Higher; Korean Banks Drop

SINGAPORE -- Asian stock markets were mostly higher Monday, taking their lead from a positive close on Wall Street after data showed the bloodletting in the U.S. jobs market continued to slow. But South Korean banks were lower, weighing the market there, on tighter home loan regulations.

Japan's Nikkei 225 was up 1.0%, Australia's S&P/ASX 200 was 0.4% higher, South Korea's Kospi was down 0.1% and New Zealand's NZX-50 was up 0.4%. Dow Jones Industrial Average futures were about 10 points lower in screen trade.

"The U.S. nonfarm payrolls report is a positive. But the result (was) just good enough to provide some relief and isn't likely to provide any fresh upward momentum, as recent rallies have priced in hopes for some improvement in the U.S. labor market," said Mirae Asset Securities market analyst Lee Jin-woo.

The August U.S. nonfarm payrolls report Friday showed a drop of 216,000 jobs, which was slightly better than the 233,000 fall expected by economists. However, unemployment increased to 9.7%, compared with 9.5% expected.

However, some analysts cautioned that the positive tone on Wall Street was driven by short covering ahead of the U.S. Labor Day holiday Monday, and that the markets looked overcooked in the short term. "Basically the entire world is waiting for the data to catch up to markets and if it doesn't within a short time frame investors will lose patience," said Southern Cross Equities director, Charlie Aitken.

If stock markets needed another reason to trade positive Monday, they could have taken support from the meeting of finance ministers and central bankers from the Group of 20 largest economies on Friday and Saturday.

"The G20 agreed the global recession is easing slowly, but there was also some lingering concern...about a double dip recession; in a nut shell what this means is that policymakers are unlikely to reverse any of those expansionary fiscal and monetary measures anytime soon," said Bank of New Zealand foreign exchange strategist Danica Hampton in Wellington.

Banks in South Korea were lower, taking a hit from news Friday the Financial Supervisory Service would impose tighter regulations on home loans, effective Monday, in a bid to curb property speculation in Seoul.

KB Financial Group was down 2.9% and Shinhan Financial was 1.5% lower while Woori Finance was down 1.3%.

Kumho Tire was up by its daily-limit of 15% as three domestic plants resumed operations. Unionized workers late Saturday accepted the company's offer of a wage freeze and no performance-based pay this year, in return for not cutting jobs.

Technology and auto stocks were regaining ground after taking a breather last week. Samsung Electronics was up 0.1%, Hyundai Motor was up 1.4%.

Tech stocks in Japan were outperforming after the Nasdaq's strong showing on Friday while exporters were also higher as the yen weakened slightly against the dollar.

Advantest was up 2.2%, Canon was up 2.6% while Honda Motor was up 1.6% and Nissan Motor was 0.8% higher.

Australian mining giants BHP Billiton and Rio Tinto were flat and up 1.3%, respectively. Both companies declined to comment on a report in The Australian newspaper that they were looking at a potential A$1 billion merger of their Canadian diamond operations.

Shares in New Zealand were getting support from the positive overseas cue, though that market was quiet with the long weekend in the U.S. limiting offshore orders.

Heavyweight Telecom was up 0.7% or 2 NZ cents after going ex-dividend for 6 cents, while Sky City was up 1.8% or 6 cents higher after going ex-dividend for 6.5 NZ cents.

Foreign exchange markets in the region were largely looking to equities to gauge players' risk appetite, after Friday's U.S. nonfarm payrolls and the weekend's meeting of G20 finance ministers yielded few surprises for the market.

"Discussions of regulations on bonuses in the financial sector suggest tighter rulings for us in the long-term. But there's no immediate concerns from the meeting for us, so players shrugged it off," said Tokyo Forex and Ueda Harlow senior dealer Masanobu Ishikawa.

The euro was gaining against the U.S. dollar, rising along with stocks, though major pairs were still confined to their well-established summer ranges. The single unit bought $1.4321 compared with $1.4301 late in New York Friday, it was buying Y133.35 compared with Y133.06. The dollar was at Y93.10 yen from Y93.03.

Japanese government bond futures were sharply lower, tracking the downturn in U.S. Treasurys Friday and the Nikkei's gains. The lead September JGB futures contract opened down at 138.86 compared with 139.10 Friday, while the yield on the 10-year cash bond was up three basis points at 1.350%.

Base metals were steady in Asian trade, with the London Metal Exchange expected to be quiet due to the U.S. Labor Day holiday.

LME three-month copper was at $6,300 per metric ton, up $30 from Friday's London kerb.

Spot gold was down $1.55 at $997.85 per troy ounce. October Nymex crude oil futures were off 20 cents at $67.82 per barrel, after it ticked up six cents on Friday.